James Doran says the instant success of America’s car scrappage scheme merely highlights the failures of the rest of Obama’s $787 billion economic stimulus package
America’s tortured love affair with the gas-guzzler is finally drawing to a close thanks to the Obama administration’s so-called ‘Cash for Clunkers’ scheme. By promising anyone with a clapped-out old motor as much as $4,500 so long as they spend the rebate on a shiny new fuel-efficient model, Obama has managed to do what a doubling of the price of petrol could not.
Cash for Clunkers was such a success when it launched in July that the initial $1 billion of taxpayers’ money devoted to the scheme ran out in a matter of days and a further $2 billion was hurriedly made available before Congress broke up for the holidays. In a little less than two weeks, so US government data shows, the programme led to the sale of 245,384 new vehicles. Administration officials estimate the new money will last into early September and could prompt an additional 500,000 car sales. America’s embattled car dealers, meanwhile, are actually running out of cars to sell. Auto sales data for July looked better than any month for several years, with Ford chalking up its first year-on-year sales increase since November 2007.
But Cash for Clunkers is far more than a nifty plan to boost car sales and give the laggardly US environmental movement a shot in the arm. The old-for-new scheme is the only truly visible success to emerge from the $787 billion economic stimulus package that was rushed through Congress in February. At a cost of just $3 billion, or 0.4 per cent of the total package, Cash for Clunkers has delivered value in spades.
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