Cash for clunkers, an example of a stupid government program

In 2009, the Obama administration instituted a program called “cash for clunkers” in which people could trade in old cars and receive up to $4,500 toward purchase of a new car; 690,000 people took advantage of the program. This program was supposed to stimulate the economy, decrease dependence on foreign oil, and reduce carbon dioxide emissions.

According to a report by the Heartland Institute (and another report here), it accomplished none of those things and actually hurt the environment by adding 345 million pounds of residue to landfills. That happened because the cars were shredded (to prevent resale), rather than recycled for parts.

The program hurt the economy by decreasing the supply of used cars, thereby making the remaining used cars more expensive, which actually hurt lower- and middle-class families.

The new, more fuel efficient cars purchased under the program did save the equivalent of one day’s worth petroleum consumption.

The 690,000 new cars represents 0.2 percent of total automobiles in the country, so the program had almost no effect on total vehicle emissions.

But, gee folks, although the program had no lasting effect on the economy, the $3 billion spent was certainly a nice feel-good program that gave the appearance of actually doing something.

Speaking of stupid government programs, here is a Washington Post article about electric cars which says in part:

President Obama repeatedly declared that, with enough federal aid, we can put a million electric vehicles on the road by 2015. His administration has invested about $5?billion in grants, guaranteed loans — including $465 million for Tesla — and tax incentives to buyers.

Yet Americans bought just 71,000 plug-in hybrids or all-electric vehicles in the past two years, according to That’s about a third as many as the Energy Department forecast in a 2011 report that attempted to explain why Obama’s goal was not preposterous.

Federal billions cannot overcome the fact that electric vehicles and plug-in electric hybrids meet few, if any, of real consumers’ needs. Compared with gas-powered cars, they deliver inferior performance at much higher cost. As an American Physical Society symposium on battery research concluded last June: “Despite their many potential advantages, all-electric vehicles will not replace the standard American family car in the foreseeable future.”

If you don’t believe the scientists, listen to Takeshi Uchiyamada, the “father” of the Toyota Prius: “Because of its shortcomings — driving range, cost and recharging time — the electric vehicle is not a viable replacement for most conventional cars.”

See also: Which Vehicles Are Most Energy Efficient?