97 Billion more for clunkers needed

[Townsend]

As someone said upthread, it helped to sop up all the inventory that was sitting there idle on the car lots.  So the stimulus was as much for the car dealerships as it was for the car manufacturers themselves.  It was good news overall, because all the 2009 inventory that was bought and paid for and sitting there not moving on the lots finally got some churn, allowing the manufacturers to ramp up 2010 models for shipment onto the lots. 

The whole supply chain benefitted, in other words, not just GM and Ford at the factory level.  And regardless of whether Mistubishi or Honda or Toyota took some profits back to Japan/Korea/Wherever, all of their American dealerships saw the first cut of the profits. 

I'd also say that it probably increased the pool of car buyers, and didn't just affect those who were already going to buy.  If that POS that's out on blocks in your driveway suddenly became worth much more than it might otherwise be worth, you might start thinking of hauling it to Jim Bob's Car Lot and trading up. 

I'd call it a win win, personally.

It also added excitement which doesn't sound like a whole lot but to dealerships it's very important.

[cannon_fodder]

It was good news overall, because all the 2009 inventory that was bought and paid for and sitting there not moving on the lots finally got some churn, allowing the manufacturers to ramp up 2010 models for shipment onto the lots. 

And now what happens to the 2010 models?  Do you think there is a large group of US consumers who sat out the free $4,500 and/or the last 2 years of selling at or below cost just waiting to buy vehicles?  Of course not.  Odds are the net gain in new car sales over a 10 year period will be zero.  People who were considering a new car bought one now instead of later.

What it did was artificially inflate short-term demand (no effect on long term demand).  Thus "stimulating" (read: giving tax money to) the entire new-car industry.  It also shattered used car sales, destroyed perfectly good assets, punished those who previously bought economical vehicles, and wiped out future product demand. But hey, it rewarded a certain sector of the economy that is suffering from poor planning.   So that's win.

Why not cash for refrigerators, cash for home insulation, or cash for home electrical generation?  Simple:  they don't have as strong of a lobby.  Cash for everything!  The program threw money we don't have at a "problem" that it will not solve.  So for a governmental program, it was a wild success.

brian said
I can't believe we allowed that program to be used to buy Asian imports.

It would be a hindrance to free-trade if we restricted the program to "American made" cars.  The net result would be less bang for the buck as it would encourage ongoing inefficiencies and discourage our automakers from ever bothering to get competitive in a world marketplace.   Additionally, what counts as American made?  When Crylser was owned by a German company would they have qualified?  What about Toyota U.S.A. that maintains a corporate HQ and rather large manufacturing base in the United States?  What about GM products assembled in Mexico or Canada?  About about Jaguars made by the Ford Motor Company in England?

And finally, international treaties prevent such action.  A government can not dictate that its manufacturers shall receive special consideration in areas other than national security (ie. American company makes American war machines).  Otherwise trade sanctions would certainly ensure and in the end everyone loses out (but the politicians feel good about themselves).

 - - -

Overall there are more and more governmental programs encouraging people to rely on the government for handouts.  The more programs we have, the more people will want to encourage them and rely upon them (please note, people in this very thread are already talking about the next "clunk" program).  As it stands, we are spending money we don't ave on crap we don't need.  That system will eventually fail if we don't get it in check.
- - -

Shadows wrote
The super rich, the rich and the working poor.  

Every time you mention the "working poor" I ask for a definition.  I do this again.  Please define the confines of the working poor for me in dollar figures.  As it stands, it is a meaningless catch phrase of yours.

Super Rich = Billionaire.

Rich = Millionaire.

Work poor = everyone else?  

Is "working poor" just a new BS term for middle class?

[Conan71]

CF, I think you missed some of the sentiment in the comments about American manufacturers.  The idea of the porkulus package(s) is/was to create and save American worker's jobs as a major selling point.  There simply a tone of irony resonating within some of us, not a serious case of xenophobia.

Our trade laws have traditionally been designed to protect American industry.  I don't think tariffs were ever judged as being an unfair restraint on trade, were they?  They were designed to protect American business interests.

[cannon_fodder]

Tariffs are an unfair restraint on trade per the WTO and numerous treaties we have in effect.  Ask Canada about our lumber prices or the U.S. Beef farmers about entry into several Asian markets.  Tariffs going both ways have spawn WTO complaints and sanction for and against the U.S.

[RecycleMichael]

Why not cash for refrigerators, cash for home insulation, or cash for home electrical generation?  Simple:  they don't have as strong of a lobby.  

Cash for appliances is next.

[Conan71]

Cash for appliances is next.

I'm waiting on the "cash for ex-wives" program, personally.  I'm planning on cleaning up with that.  Though a new fridge and cook-top wouldn't suck either.

[Wrinkle]

I'm waiting on the "cash for ex-wives" program, personally.  I'm planning on cleaning up with that.  Though a new fridge and cook-top wouldn't suck either.

...you can crush your own ex-wives. And, whatever you do, please don't put them back into service.

[shadows]

Shadows wrote
The super rich, the rich and the working poor. 


Every time you mention the "working poor" I ask for a definition.  I do this again.  Please define the confines of the working poor for me in dollar figures.  As it stands, it is a meaningless catch phrase of yours.

Super Rich = Billionaire.

Rich = Millionaire.

Work poor = everyone else? 

Is "working poor" just a new BS term for middle class?

Note CF:

Annual Average Wage/Salary per Job1,
 U.S. and States 1990-2007 Area 2007p
United States $43,889
Alabama 36,748
Alaska 44,222
Arizona 41,223
Arkansas 33,328
California 50,182
Colorado 44,790
Connecticut 56,966
Delaware 46,318
Dist. of Col. 72,587
Florida 39,505
Georgia 41,574
Hawaii 40,519
Idaho 33,217
Illinois 47,021
Indiana 36,908
Iowa 34,980 33,
Kansas 36,695
Kentucky 36,015
Louisiana 37,586
Maine 34,721
Maryland 48,113
Massachusetts 54,155
Michigan 42,727
Minnesota 43,460
Mississippi 31,801
Missouri 38,154
Montana 32,123
Nebraska 35,390 
Nevada 42,825
New Jersey 52,968
New Mexico 35,980
New York 58,481
North Carolina 38,556
North Dakota 32,755
Ohio 39,206
Oklahoma 35,131
Oregon 38,725
Pennsylvania 42,214
Rhode Island 40,986
South Carolina 35,100
South Dakota 31,325
Tennessee 38,467
Texas 44,103
Utah 36,698
Vermont 36,047
Virginia 45,910
Washington 45,975
West Virginia 33,528
Wisconsin 37,391
Wyoming 38,901

With an average wage of 21.dollars a hour or 840 dollars weekly by 2007 statistics (last available) the W2 wage earners who make less than 80% ($16.80)of the average who pay the same for the necessities of life as the other, by simple reasoning would be considered the struggling poor.  Thus in this class falls a very large group that are working in a substandard life style so they should be addressed as the working poor.  Does this answer your question?   

 

[Red Arrow]

With an average wage of 21.dollars a hour or 840 dollars weekly by 2007 statistics (last available) the W2 wage earners who make less than 80% ($16.80)of the average who pay the same for the necessities of life as the other, by simple reasoning would be considered the struggling poor.  Thus in this class falls a very large group that are working in a substandard life style so they should be addressed as the working poor.  Does this answer your question?   

 

80%, simple to say and possibly true, but not necessarily.  Is 80% some kind of generally accepted number?  Tax deductions including Educator expenses, Moving expenses, 1/2 of self-employment taxes, Self employed health insurance deduction, Alimony paid, Student loan interest deduction, tuition and fees deduction, and a few others will probably help the average wage earner more than the rich who don't really need them. (Lines 23-35 of form 1040, you don't need to itemize to get them. Tax credits (lines 47-54) include credit for child and dependent care, Education credits,  credit for the elderly or disabled and come directly off your tax owed.  No one is going to get rich on these deductions.  Depending on one's situation they may help.  Earned Income Credit helps people nearly to the average income levels.  Deductions and credits on income tax may skew the 80% number lower.  Cost of living, especially housing, in some areas could take that number higher.  Sometimes local income compensates.  I was offered a transfer to Silicon Valley in the late 80s.  I couldn't afford it.  The only pay differential offered was $100/mo.  Houses that would go for $80,000 or less in Tulsa were already at $300,000 plus in CA.

You imply that the average wage earner only makes enough for the necessities of life.  In our age of entitlement, I expect that some things considered luxuries in past years are now considered necessities. Widescreen TV in every room.  Cell phones for every family member with unlimited texting.  Going out to eat often.  $100 sneakers for the kids.  Designer jeans.  Everyone has their own priorities they consider necessary that someone else may consider a luxury. 

If there is an official definition, I'll accept it as just that... an arbitrary definition.  Otherwise, not so simple.

[shadows]

RA:
That would be considered as the gross wage.  A old rule of the thumb that has been used by nations is that you cannot tax citizens for more that 50% of their gross.  Foreclosures, bankruptcies and industries out sourcing to foreign countries are the contributing factor to the 80% which include a great portion of the working poor that is increasing more each day.
 
We are doing our reverse economics in a way no nation has ever tried and survived.  We use the barter of exchange to mean printing paper money without any backup except fear of reprisal it is not accepted.  Other nations are supporting the floating dollar to protect their interest while we continue to increase the printing of paper dollars.   In setting out how we have established a life style that equals the one in the southern states before the war of 1860 don’t forget to point out that we are doing it on credit.  You might also point out that many students have credit cards in excess of $25,000 due on them.  It is a great economy but in it could become like the money issued by the southern nation and returned back to only valueless paper.  Have fun but the dance will be over and the fiddler will want his pay.   

[cannon_fodder]

So 40% of the nation is in your "working poor" category.  By your statements that means someone in Oklahoma making  $28,001 is rich.  Presumably the top 40% are "very rich."  Thus, in Oklahoma, if you make $50,000 you are well within the "very rich" category.   Never mind the fact that two people in Oklahoma making $28,000 (working poor) earn $56,000 as a household - which is certainly enough to have a decent standard of living (aka not poor) but not nearly enough to be considered "very rich." 

I think what you want to say for "working poor" is someone living below the poverty threshold.   Which is based on household income.

Also, no one is supporting their floating currency.  No industrialized nation backs their currency with reserves anymore.  So pretending that a fiat currency is something unique to the United States is flat out wrong.

Is inflation a potential problem?  Damn right.

Is a huge national and personal debt a looming problem?  Damn right.

Are we encouraging a spend everything you can economy to our detriment?  Yes we are.

Does that have anything to do with the Creek Nation, the civil war, or any of the other "clever" things you try to add?  Nope.  None at all.

[shadows]

So 40% of the nation is in your "working poor" category.  By your statements that means someone in Oklahoma making  $28,001 is rich.  Presumably the top 40% are "very rich."  Thus, in Oklahoma, if you make $50,000 you are well within the "very rich" category.   Never mind the fact that two people in Oklahoma making $28,000 (working poor) earn $56,000 as a household - which is certainly enough to have a decent standard of living (aka not poor) but not nearly enough to be considered "very rich." 

I think what you want to say for "working poor" is someone living below the poverty threshold.   Which is based on household income.

Also, no one is supporting their floating currency.  No industrialized nation backs their currency with reserves anymore.  So pretending that a fiat currency is something unique to the United States is flat out wrong.

Is inflation a potential problem?  Damn right.

Is a huge national and personal debt a looming problem?  Damn right.

Are we encouraging a spend everything you can economy to our detriment?  Yes we are.

Does that have anything to do with the Creek Nation, the civil war, or any of the other "clever" things you try to add?  Nope.  None at all.

No; it is estimated the as many as 80% of those who do the manual labor are of the working poor.  Within this class are those who struggle to obtain a small portion of what those classed as rich consider as a standard.  It could be greater.  I presume that only the top 1% are the very rich who maneuver all conditions of both of the classes below them. In Oklahoma those making $50.000 could fall within either category of the rich or the working poor according to the old phraseology that history repeats its self.  It all according the life style of which one choose.  Location in the specified area of which one exist can determine the classification of their class.  A person living in a $1,000 a day apartment that is classified in the rich category making above the standard wage can default while another under the same condition living in a $40.00 dollar apartment by proper management can enjoy the same privileges allotted to his rich class.  Management of ones assets can determine the rich class.

Household income only increases the threshold when it is contributed to establishing the life style.  Wives and children that do not contribute as an increment to the household funding do not move the working poor class into the rich class.

Foreign banks (government guaranteed) have for the last several years been buying the dollar in order to stabilize it in order to protect the paper funded dollar of the world greatest debtor.  It maybe true that no industrialized nation has reserves as they have been lead to believe that the dollar was not subject to the monetary changes of poor management of budgeting.  Thus with our downfall it has increased inflation to where it is forcing the world into a world depression of which the one in the 30’s will look like a rose garden. 

We have began a program that its philosophy is based on “spend ourselves into prosperity”.  This being passed on the working poor class in credit cards.

The use of the phases on the civil war, Creek Nation and others are based on 4th grade history that show history repeats itself.  Of course one would have to travel of a foreign country school to lean about our own history (unbiased) as that is where it is being taught. 

 

   

[rwarn17588]

No; it is estimated the as many as 80% of those who do the manual labor are of the working poor.  Within this class are those who struggle to obtain a small portion of what those classed as rich consider as a standard.  It could be greater.  I presume that only the top 1% are the very rich who maneuver all conditions of both of the classes below them. In Oklahoma those making $50.000 could fall within either category of the rich or the working poor according to the old phraseology that history repeats its self.  It all according the life style of which one choose.  Location in the specified area of which one exist can determine the classification of their class blahblahblahblahblahblahblahblahteleblah

Thanks, but I think I'd rather use as a source the U.S. Census bureau and its fairly scientific estimations for percentages of people at or below the poverty level, than someone who uses half-addled assumptions and freaky biases and who can't even communicate in clear English half the time.

But that's just me.

[Steve]

I was dead-set against this "cash for clunkers" program from day 1.  The U.S. Federal Gov't. has poured $2 billion+ into this, but where do you think the money comes from?  It comes from selling Federal gov't debt, mainly to China.  So our government goes deeper in debt to China to subsidize domestic auto sales, and increase the personal debt of U.S. residents.  Absolutely insane.  China officially owns the U.S. government, from a debtor point of view.

Any effect of this program will be temporary and very fleeting.  A lousy idea, and please no more "cash for anything" programs that will only add to our national debt to foreign countries and jeopardize the economic future of the U.S. for generations to come.  I am very liberal on most social issues, but these so called "stimulus" programs are more than I can stomach.

[Red Arrow]

It would be interesting to find out the amount of new car purchases made solely because of the Cash for Clunkers.  C for C probably increased traffic which allowed dealers to wheel and deal in addition to or exclusive of  C for C resulting in more sales.  How many of the sales were merely moved in time perhaps a few months.  Now the manufacturers are ramping up production for sales that have been already made in the last few weeks.