The much-maligned federal government's "cash-for-clunkers" program, is, nevertheless, stimulating the U.S. economy.
True, it may take new cars sales that would normally occur in 2010 and bring them forward to 2009, but that fact, combined with the extra customer traffic the program has created in the nation's auto showrooms, has bumped up auto sales -- providing a slight tailwind for the U.S. economy.
Again, we won't definitively know how much the clunkers program has positively affected U.S. GDP until we get the official data from both auto manufacturers and the U.S. Commerce Department months from now, but suffice it to say that, given the depth and length of this awful U.S. downturn, the nation will take any constructive, progressive program -- private or public -- that increases commercial activity.
La théorie de l'état positif vie (The theory of the positive state lives)
Further, the above is an example of Keynesian economics and of the theory of the positive state -- the state as an agent for good actions. (But that's just academic bookkeeping.)
From an investor standpoint, the obvious question is, why not pass a cash for clunkers appliances program?
Given the "frugal consumer" trend, the nation's economy could use another incentive to tip those on-the-fence citizens who would otherwise buy an appliance into the nation's appliance stores and outlets.
Further, the cash for appliances rebate would not have to be as large, in rebate coupon terms, as the vehicle program, perhaps a $200-$1000 sliding rebate, based on the cost of the appliance/durable good. Congress could limit the program to a modest amount, say $10-25 billion, with an option for an additional outlay, if it proves to be as successful as the auto rebate.
Comment: Yes, it's government intervention in the U.S. economy. Yes, it's a form of socialism: so are billion-dollar subsidies to American farmers. But it will further boost the U.S. economy. And you don't have to be an economist in FDR's New Deal administration to know that.
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Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.











Reader Comments (Page 1 of 5)
8-19-2009 @ 12:59AM
Bill said...
I am waiting on "dollars for drawers." I have several sagging pairs of Hanes briefs that I am waiting on a government money to help me replace.
8-19-2009 @ 6:34PM
Mandy said...
It is a shame that the auto makers put themselves in the hole, making an ungodly income every year and the farmers can't make ends meet cause soo much of what they make it controlled by the govt., who then tries to make themselves look like a hero by offering assistance (pennys on dollars), why don't they just pay the farmers what they are worth?? Never the less it seems like the cash for clunkers might be helping.
8-19-2009 @ 9:46AM
homerunhoov said...
Honestly, I don't think this program should be expanded any farther then it already has. I love that fact that I will be paying taxes for years to come for all this crap as it is
8-20-2009 @ 10:03AM
Gayle R said...
if you are going that far how bout trading in all the singlewide and doublewide trailers for stick built energy star brick homes
8-19-2009 @ 9:54AM
dew said...
How about cash for clunker to include RVs. Oblamo promised help to Elkart ind. But it was just another lie like health care and stimlus. Ihope everyone who voted for him gets there reward
8-19-2009 @ 9:57AM
bktmarsha said...
I think most appliances arw manufactured out of the country now. So it probably wouldnt stimulate any jobs here.
8-19-2009 @ 9:57AM
Robert Cramer said...
Virtually no appliances are made in the USA
Most American brands are made in Mexico, Korea, or China
(Anyone out there, please advise of any exceptions.)
Fail to see how buying a bunch of foreign products would stimulate the US economy.
8-19-2009 @ 9:59AM
jack said...
You know what we need? A Cash for Cash program. We have already made my 11 year old's taxes go up to almost 50%, why not make it 75%! I could you the cash now, and not worry about repaying it, just like Obama. So long as Congress has checks, they're not broke.
8-19-2009 @ 10:22AM
stonewall1947 said...
Jim has sold out . I bet he has investment in the appl. field.
8-19-2009 @ 10:24AM
gleeminghope said...
Now that is a dumb idea. I wish people would educate themselves first before making such dumb comments. Most appliances are not even made in America and here we go again, we would be sending our hard earned tax payer dollars overseas again. We should have learned from the cash for clunkers program on cars that it was not going to benefit the United States as much as it would Japan. The cash for clunkers program picked up the Japanese economy, not ours. We still have millions of people out work because of dummies buying foreign goods..we cannot continue to support other countries, we need to start buying AMERICAN goods and send the foreigners back home...if you don't believe me, follow the money path, for every foreign car sold, the profits go back overseas, they do not stay here..
8-19-2009 @ 10:28AM
stonewall1947 said...
How about free viagra, now that would be a stimulas.
8-19-2009 @ 10:30AM
shawn said...
Why stop there, why not tootsie rolls, hair cuts, getting your rugs shampooed. Why charge anything for anything. The chains of kcarab amabo brought about is going to ruin the USA, but thankfully we have a black in the white house. A street thug negotiator, what qualification, wait, he is black! Hurry up 2012.
8-19-2009 @ 10:36AM
catherine pierce said...
Putting the dollar back on the gold standard is the only way to stop this economic and power grab fest going on in Washington.
8-19-2009 @ 10:46AM
steve said...
and we are paying for jap cars the money gos to japan
8-19-2009 @ 10:54AM
don luby said...
We have already 'sunk' $3 BILLION in the 'clunker' program. Does it bother anyone else that we are using taxpayer funds to reduce the cost of new cars for people who purchased money burning vehicles to begin with ???? We alreadt propped up the auto manufacturers with 10s of Billions to cover years of poor business decisions and now we subsidizing more bad decisions (although over half the autos being bought have 'foreign' nameplates). In the auto industry at least, the 'free market' system that brought us the highest living standards in the world is DEAD and BURIED. GM will never see world automotive leadership again
8-19-2009 @ 11:21AM
servicemasterwv said...
how about just lowering the prises of the dam stuff
8-19-2009 @ 11:12AM
ghallas said...
I have a 1998 Toyota Corolla with two damaged fenders, the air cond does not work, a craked winshield, dash lites dont work, 1 door lock fails, rust developing on roof and fenders.
Does this sound like a CLUNKER...........since it gets 30 MPG
it doesn't qualify..where is the justice ?
8-19-2009 @ 11:05AM
jeff bruninga said...
Water heating accounts for 15% of average household energy costs per year. Replacing tank heaters with on demand tankless heaters could save $115 per year per household or $823 million dollars in 5 years nationwide. Replacing top loading washers (80 gallons per load) with front loading washers (20 gallons per load) could 15,000 gallons of water per year for the average household or $150. Cash for clunker applainces makes a lot of economic and environmental sense!
8-19-2009 @ 11:05AM
Brad said...
Robert Cramer said...
Virtually no appliances are made in the USA
Most American brands are made in Mexico, Korea, or China
(Anyone out there, please advise of any exceptions.)
Fail to see how buying a bunch of foreign products would stimulate the US economy.
******************************************
There are a lot of appliances manufactured in the U.S. Whirlpool, Maytag (which is Amana, Magic Chef, Maytag, and Jenn-Air). It looks like most of the larger appliances are still made in the U.S. Here is a site that tells:
http://www.stillmadeinusa.com/appliances.html
8-19-2009 @ 11:10AM
JMA said...
Cash-for-Clunkers is NOT helping America: (1) More than 60% of the vehicles being purchased through program are Jap cars, not American.(2) The old used cars being traded-in are sitting in lots until the govt. cuts them up and sells them as scrap to countries like Japan, at pennies on the dollar.(3) The program is hurting the Mon-&-Pop used car dealers who rely on trade-ins to fuel their businesses.(4) Economists are predicting that more than 50% of the new car sales through the program will default because many participants are purchasing cars that they can't afford to pay for...The cars will get repossessed and the banks will be left holding the bag....This is just another example of a poorly thought band-aid Obama-Krap program that is, like all others, back-firing !