Clunker Cash

Let us take a trip down memory lane. Imagine you are 16 again and you are about to get your first car. Filled with excitement and anticipation, you can’t wait to get behind the wheel and simply drive.

Oh, how I can still remember the funky smell that emitted from my cleats and shorts in the back seat and its special place in my heart. I pictured myself driving my black beauty until the wheels fell off. That is, until my dad told me about the “Cash for Clunkers” government proposal.

The “Cash for Clunkers” bill, now being referred to as the CARS Act, is a program being pushed by the Obama administration and automakers. The premise of the plan is to encourage people to trade in their gas-guzzling and CO2-emitting vehicles for a rebate on a new car.

An initial version of this plan was passed by the House, but it is still being tweaked by Congress. The limitations of the initial plan state that the car being traded in must be more than eight years old and get 18 miles per gallon or less.  

The amount of the rebate will range from $3,500 to $4,500, depending on the difference in miles per gallon between the “clunker” and the new vehicle.

The hope is that this will encourage more consumer spending and provide a much needed shot in the arm to automakers, while removing environmentally harmful vehicles.

Germany has already implemented a similar program and is reaping the benefits. German automakers have seen factories remain open and auto sales avoid the dive bomb felt here by American automakers.

People were encouraged to trade in their vehicles because of the gas money they save, while others felt they were doing their part for the environment.

There are some issues with this program. The biggest is where all this money is going to come from. The federal government has been on a spending spree since February, and this program will be expensive to fund. An increase in taxes is the only cure for the funding problem.

Second, what will the government do with all the old “clunkers?” People will be donating essentially worthless vehicles to the government and letting them deal with the mess.

There will have to be some sort of government agency established to dispose of these vehicles and hopefully recycle them.

But the state of the auto industry overshadows these issues. Something drastic needs to be done to stop the bleeding of jobs and income.

The CARS Act has been pushed by auto lobbyists, but it has never been able to make it through the House and Senate. This is the perfect opportunity for this plan to finally come to fruition.

This program isn’t the magic pill to save the auto industry. But, it will provide relief to struggling dealers and towns dependent on the industry.

Anything our government can do to ease the pain should be done and done quickly.