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Sunday, August 09, 2009

Cash 4 Clunkers

Like most Americans with older cars in the driveway, I've taken notice of the U.S. Government's "cash for clunkers" program. They will pay you up to $4,500 toward the purchase of a new, more fuel efficient car than the old car you presently drive.

I guess the concept is to use government funding to get polluting gas-hogs off the roads in America. On the surface, it seems okay. Probably a noble thing to do. Saving the planet and making America less dependent on foreign oil and all.

But there are some things about this program that are starting to bug me. Let me explain.

First, the U.S. government funded $1 billion for this program. It was money we didn't have. So we borrowed it. We'll pay it back in 40 or 80 years. Meanwhile, we'll pay interest on it. Probably to China. Over the years, the interest costs will mount up to multiples of the billion dollars we borrowed. The debt will last far longer than the new, more fuel efficient cars.

Second, a billion dollars didn't cut it. We ran out of money. So our Congress funded the program with another $2 billion. Again, it is money that we don't have. So we're borrowing it. We'll pay it back in 50 or 90 years. Meanwhile we'll pay interest on it. Probably to China. Over the years - decades really - the interest costs will mount up to multiples of the billion dollars we borrowed.

Third, most of the reason people drive old gas-hog clunkers is financial. I mean few people, if they'll really be honest, enjoy driving vehicles that make them the laughing stock of the soccer team. I can't imagine anything Americans love more than a brand new car. It's the pinnacle that we all enjoy. If we can afford it, I'm convinced that the majority of Americans would get a new car. But that's the rub --- we can't afford it. So in order to get that new car, we'll apply the "cash for clunkers" that our government borrowed from Japan to the down payment. Then we'll get a loan that we can't afford the payments on, from the banks that our government bailed out.

Fourth, I notice that as we spent the first billion dollars on this program, there were five models of new vehicles that captured most of the sales. Four of them are made by Japanese companies. So our government borrows money from China ... to pay Americans to buy new cars that they can't afford ... and we buy them from the Japanese. Someone, please help me understand how this benefits our country!

Fifth, I saw a video on YouTube that explains how the government's web site for this program gives the government rights that you never intended to give it. View the video at You'll see that to get into the government web site, you have to agree to give the government access to all the information in your computer. Further, it gives the government the right to control your computer. As such, it gives the government the right to monitor all activity on your computer - including Skype phone calls. Is this really what you want to get from your government as you go about the patriotic duty of getting that new car?

So here's how I see it. Cash for clunkers? I don't think so. Not this time. Not now. Not with these conditions. Moreover, I'm more than disappointed to see that the average American who is participating is flocking to the Japanese dealers to do it. If Americans are going to continue to bury ourselves in so many ways, couldn't we at least buy American in the process!

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