‘Clunkers’ Auto Rebate Plan So Popular That It’s Already Broke

[saskganesh]

point of interest. in the last Saskatchewan election, the party that got elected waived the provincial sales tax IF you bought a used vehicle. so maybe you can export those vechiles to the clunker-enabling Canadian prairies.

... we call them "beaters" though.

[garbon]

I'm glad that the House was eager to give this program another 2 billion.

[KRonn]

I'm glad that the House was eager to give this program another 2 billion.

Heh, maybe instead of an "economic stimulus" of over $700 billion (plus another few hundred billion for interest on that debt), Congress and the Obama admin should have stuck to ideas like this, and given at least 5 billion to this one starting out.   

[crazy canuck]

If I drive an old clunker (beater) south of the Line can I turn it into cash too?

[Admiral Yi]

Thing is, they shouldn't get into this situation in the first place.  Before they announced the whole thing, they should've added a footnote saying that we only allow this number of applications.  If the number of applications exceeds this number, we will not entertain them.  Congress has authorized you to spend this amount of money.  Civil servants must take measures to ensure that that is the maximum amount that will be spent.  If you design a system that will commit Congress to spend more than that, you have failed in your basic duty.

Still doesn't get rid of the problem that money runs out in real time (or application slots in your alternative system) whereas applications process with a lag.

[DGuller]

If I drive an old clunker (beater) south of the Line can I turn it into cash too?

If it's been registered in US for the last year, sure.

[The Brain]

What about chunkers?

[Monoriu]

Thing is, they shouldn't get into this situation in the first place.  Before they announced the whole thing, they should've added a footnote saying that we only allow this number of applications.  If the number of applications exceeds this number, we will not entertain them.  Congress has authorized you to spend this amount of money.  Civil servants must take measures to ensure that that is the maximum amount that will be spent.  If you design a system that will commit Congress to spend more than that, you have failed in your basic duty.

Still doesn't get rid of the problem that money runs out in real time (or application slots in your alternative system) whereas applications process with a lag.

The key thing is expectations management.

If you announce a system with no caveats attached, people will naturally expect that they will get the rebate.  Whether you run out of money or not is your problem.  If you run out of money, the people will expect the bureaucrats to seek additional funding.  They will raise hell if they don't get the rebate.

If you design the system with quotas attached, and announce it, it doesn't matter if the applications keep coming in.  They will know they may not get the money.  The bureaucrats can defend their position if some people aren't paid.

[Jaron]

They need to do a Chinks 4 Cash program so I can turn Mono in for money. He'd be living out his life dream of being worth something and I'd get a weekend with the hookers and Jamaicans.

[Admiral Yi]

The key thing is expectations management.

If you announce a system with no caveats attached, people will naturally expect that they will get the rebate.  Whether you run out of money or not is your problem.  If you run out of money, the people will expect the bureaucrats to seek additional funding.  They will raise hell if they don't get the rebate.

If you design the system with quotas attached, and announce it, it doesn't matter if the applications keep coming in.  They will know they may not get the money.  The bureaucrats can defend their position if some people aren't paid.

Expectations were managed.  They announced that the program would run until October 1 or until the money ran out, whichever came first.  They had a meter running on their web site showing how much of the billion was left.

[KRonn]

There do seem to be problems with this bill. I don't think they've figured out who gets the money or rights for the parts that can be stripped off vehicles. Vehicles are supposed to be destroyed in two days or something, which is very hard to do. Dealers have to fill out complex and confusing paperwork, and they're being turned down on requests. Then as I said before, destroying so many usable autos is just a waste of resources. Lots of kids or poorer people would buy these older cars. Too many issues with this plan. The upside is the increase in auto sales, which helps the economy, but i'm beginning to think this is more of a boondoggle plan. Let's see how it goes.

[sbr]

My 1987 Toyota 4Runner was not enough of a clunker to qualify.  I think my kids would beg to differ. 

[DontSayBanana]

A more basic issue is just the fact that this is, in effect, a voucher system, and we had pretty good evidence this year that those tend to be overloaded quickly- the digital TV converter box vouchers.

[grumbler]

Right, and that was my understanding. I just don't know if there have been any changes where some spare parts can be removed. But yeah, that would get messy and allow a corruption of the program.

Cars are always stripped before they are crushed (except when the Mob pays for the crushing in the movies).  Why would this be different?

[grumbler]

A more basic issue is just the fact that this is, in effect, a voucher system, and we had pretty good evidence this year that those tend to be overloaded quickly- the digital TV converter box vouchers.

Yes, but you cannot expect Congress to react based on mere facts.