Victim of its own success

[Lux Interior]

The cash for POS program seems to be a victim of its own success. Since the republicans can't find a fault in the program, they are now bitching about its success.

http://www.nytimes.com/2009/08/04/busine....html?_r=1&hp

http://finance.yahoo.com/news/Clunker-sa...6.html?x=0&sec=topStories&pos=main&asset=&ccode=

The House voted 316-109 to extend the program. Now the senate needs to approve it.

Some choice quotes:

NYT wrote: The Senate Republican leader, Mitch McConnell of Kentucky, said Monday on the Senate floor that the Obama administration had botched the execution of the program by miscalculating how popular it would be. This was a reason to be more deliberate in acting on a health care overhaul, he said.

Yeah, it was too popular and worked too well. We should kill it (before Obama's ratings go up).

yahoo wrote:
"We were told this program would last for several months," GOP leader Mitch McConnell of Kentucky said. "It ran out of money in a week, prompting the House to rush a $2 billion extension before anybody even had time to figure out what happened to the first billion."

My guess is that it was distributed to car manufacturers in small amounts (probably between $3500-$4500) until it was all gone. I wonder if Mitch loses sleep at night over the billions in cash that are unaccounted for in Iraq.

yahoo wrote:
Sen. Jon Kyl of Arizona, the Senate's second-ranking Republican, suggested lawmakers "take a time-out" so they could receive more details about the program before providing more money. "I'm concerned that somebody's going to have to pay for this, and $4,500 for everybody that wants to take advantage of this program is a lot of money."

Wow, the republican's second-in-command has just had an epiphany! The money doesn't grow on trees! Someone will have to pay! Senator Kyl, why didn't you get the details before voting on the first billion?

[Pops]

FWIW, the group of auto dealerships I drive for (37th largest in the US) has decided to opt OUT. Too much paperwork, too much time salesmen are taken off the floor. They're sending customers to local competitors still involved in the program.

[rgG]

The reason it ran of of cash so quickly is that dealers were pre-qualifying people as soon as the program was announced, but before it actually started, so when the funds finally became available, they were gone filling the backlog of orders.

[JoeH]

One, under the legislation that was passed the program started July 1, but did not start taking applications for the rebates until the 24th. So the money ran out based on four weeks of sales, not just the highly visible last week. Two, the initial estimate was the program would cost $4 billion. During the process of being passed the allocation was cut to just $1 billion as an initial amount as one of many compromises. The initial estimate is looking much more accurate than the naysayers want to give credit for, so they never mention it.

[Mac1337]

It starts with a billion. Then they realize it is not enough so they add two more. The year is 2020. The Clunker Recovery and Fleet Modernization Act has a line item of $25 billion. Republicans are fighting to reduce it back to the acceptable lever of $24B that was passed last year. GM and Chrysler warn of massive layoffs.

[TLB]

Not to hijack, but I have a friend that is a car saleman. His big gripe is that from his experience, the cars he has been destroying are not POS vehicles, but vehicles he would love to sell or perhaps even have the government donate to a needy family that is really driving a POS. His real outlyer--he had a real little old lady car with only 32K miles that he had to pour the "magic potion" in to destroy the engine.

[Seacrest]

Who would have thought giving away "free" money would prove so popular?

[NeverMind]

TLB wrote:
Not to hijack, but I have a friend that is a car saleman. His big gripe is that from his experience, the cars he has been destroying are not POS vehicles, but vehicles he would love to sell or perhaps even have the government donate to a needy family that is really driving a POS. His real outlyer--he had a real little old lady car with only 32K miles that he had to pour the "magic potion" in to destroy the engine.

That doesn't make sense. The cars MUST be in running condition, NOT dead.

[TLB]

NeverMind wrote:
[quote=TLB]
Not to hijack, but I have a friend that is a car saleman. His big gripe is that from his experience, the cars he has been destroying are not POS vehicles, but vehicles he would love to sell or perhaps even have the government donate to a needy family that is really driving a POS. His real outlyer--he had a real little old lady car with only 32K miles that he had to pour the "magic potion" in to destroy the engine.

That doesn't make sense. The cars MUST be in running condition, NOT dead.
Yes, but the dealer must then destroy them. "...sodium silicate is the designated agent of death for cars surrendered under the federal cash-for-clunkers program. To receive government reimbursement, auto dealers who offer rebates on new cars in exchange for so-called clunkers must agree to "kill" the old models, using a method the government outlines in great detail in its 136-page manual for dealers: Drain the engine of oil and replace it with two quarts of a sodium-silicate solution."

[Mac1337]

When government issues instructions how to kill engines you know things are getting out of hand. You'd think someone in Honduras could use a few of them perhaps?

Another lunacy. They are killing them because they get less than 18mpg at the same time that factories are stamping out the same mileage cars by the thousands.