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How about a federal 'cash for clunkers-appliances' program?

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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.

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Last updated: November 26, 2009: 12:02 AM

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