Local Real Estate Comments and Ramblings

Health care, stimulus, and cash for clunkers



The recent and now revived "cash for clunkers" gives us good insight in to the results of government programs.  

1. If you put money if the peoples hands you will get an immediate response and see the results of the "stimulus".  Personally, I think the people should just be allowed to keep their own money to spend on cars, boats, ipods, or whatever they want to spend it on.  Give us a tax cut without the large government program.  However the results speak for themselves.  I think by all accounts a lot of people went and bought cars.  

2. If it is a government program the cost will always be higher than projected.  That is how the $1 billion became $3 billion.

3.  The government program will be muddled with bureaucracy and red tape.  There are many numerous reports of frustrated dealers who have sold cars and not yet received rebates from the first round of "cash for clunkers".  If the dealers don't receive the rebates they will "unwind" the deals and the folks who have had a shiny new car in their driveway for the last 2 weeks or so will end up getting their clunker back.  There is a term in the car industry called "spotting deals". Basically when you sign that stack of paperwork in the dealers finance office, one of the docs says that the deal is not done until all details are approved.  You sign and drive the car home but if the bank turns down the loan (or in this case the govt never approves the rebate) you will be required to come back and renegotiate the deal or return the car.

This $billion used car rebate program is from the same folks who want to supply us with a $trillion health care program.

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