Cash4Clunkers -the real story..

[Carl Beck]

FROM: The SEMA Action Network

Saved From The Scrapyard

Hobbyist Protections Added to Lessen Impact of Cash for Clunkers Program

It seemed inevitable. In response to the economic tsunami, nations around the world have enacted cash for clunkers programs to help jump-start new car sales. The United States has now joined the crowd. But, there is good news. The Specialty Equipment Market Association (SEMA) and the SEMA Action Network (SAN) persuaded Congress to spare cars 25-years and older from the scrappage heap and expand parts recycling opportunities under the new law.

Congress passed the controversial program in June. Consumers who voluntarily participate, will receive a voucher to help buy a new car in exchange for scrapping a less fuel-efficient vehicle. The SAN was able to ease the program’s effects by convincing lawmakers to include a requirement that the trade-in vehicle be a model year 1984 or newer vehicle. This provision will help safeguard older vehicles that may possess ‘historic or aesthetic value’ and are irreplaceable to hobbyists as a source of restoration parts. The measure also allows all parts to be recycled except the engine. Lawmakers were convinced to permit the drive train to be recycled if the transmission, drive shaft or rear end are sold as separate parts.

The cash for clunkers war had two battles. The first ended in mid-February when President Obama signed a clunker-free stimulus bill into law. For the previous two months, thousands of SAN members responded in force by deluging lawmakers with e-mails, faxes and phone calls in opposition to a scrappage program.

The second battle began on March 30 when President Obama embraced the idea as part of a financial aid package to help a struggling auto industry. The signal was sent—when, and not if a scrappage program would be initiated.

The SAN then focused its efforts on lessening the impact of the program on the hobbyist community.

“SEMA and the SAN are disappointed that Congress ignored evidence that vehicle scrappage programs will not achieve claimed environmental benefits,” said Steve McDonald, SEMA’s Vice President of Government Affairs. “However, we are pleased that lawmakers agreed not to include the older cars and parts that help drive the passions of many in the automotive hobbyist community.”

Under the program, consumers who agree to scrap a trade-in car that gets 18 miles per gallon or less (15 mpg or less for heavy pick-ups and vans) will receive a voucher to buy a qualifying new car. The voucher will range from $3,500 to $4,500 based on the new car’s fuel efficiency. The program primarily targets SUVs and pickups since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement.

The car buyer will receive a $3,500 voucher if they buy a new passenger car that was rated at 4 mpg higher than the older vehicle, or a new pickup truck/SUV that was at least 2 mpg higher than the old truck. They will receive a $4,500 voucher if the passenger car was at least 10 mpg higher and the truck/SUV was at least 5 mpg higher.

Lawmakers want the program to last one year but have only set aside $1 billion to fund car purchases made from July 1-Nov. 1, 2009. They will seek another $3 billion later this summer to fund the program into 2010.**

“It took countless meetings with lawmakers and their staff in order to secure the 25-year exemption and recycling provisions,” said SEMA Director of Regulatory Affairs Stuart Gosswein. “While it proved impossible to kill the scrappage program, lawmakers were keenly aware of the SAN’s opposition to the program and wanted to remove any unintended consequences to the hobbyist community. Your voices were heard.”

FWIW,

Carl B.

[=Enigma=]

Finally some good news on this. Democracy lives! I'm glad to see the vehicle age limit tied to a rolling date should the boneheads in Congress decide to extend the duration of the program in the future. Thanks to SEMA & SAN and to everyone who e-mailed their congressman.

[Walter Moore]

As quickly as it started, it seems to have ended. At least there are reports to that effect.

http://www.foxnews.com/politics/2009/07/30/officials-say-government-set-suspend-cash-clunkers-program/

[doradox]

Our Zs were 15 years old or less at one time. I wonder how many fewer would be around now had they enacted similar legislation in the '80's.

Steve

[SportBikeMike]

I didn't think S30s would qualify anyway because the avg. gas mileage is better than 18 mpg?

[Carl Beck]

Walter - the latest...

U.S. Won't Suspend Auto "Clunkers" Program: Official

By REUTERS

Published: July 30, 2009

Filed at 11:03 p.m. ET

WASHINGTON (Reuters) - The U.S. government will not suspend its $1 billion "cash for clunkers" auto sales incentive even though confirmed sales and pending transactions neared the limit of 250,000 vehicles much sooner than expected, an Obama administration official said on Thursday night.

http://www.nytimes.com/reuters/2009/...ers-sales.html

Reply With Quote

[Inf]

Sweet, more excessive government spending of money they don't have, and can't afford to even pay the interest on once borrowed (aka "created" by the private federal reserve bank).

Have faith in our US dollar everyone!

...And I say faith, because at this point, the facts are really quite grim.

[DaveBonds]

This bill has a gigantic loophole in it that will leave it in jeopardy of not actually helping the American public consumers at all.

What's the difference between the $3,500-$4,500 in government grants and a $3,000 cash rebate instituted by the dealership on a "push, pull or drag" trade in deal?

The difference is that it's not fake money figures being tossed around on a closing agent's desk. This is real money and it's ours. Our tax dollars are now lining the pockets of the dealerships, of the car manufacturers who have already had our tax dollars aiding them.

I don't see anything in this bill that protects us as taxpayers or as potential car buyers from the dealerships simply just staking on $3,500-4,500 on to the price of vehicles that apply to the figures of this bill. And if not the full amount of the grant, than certainly a large percentage of it. There is no way to track that kind of activity.

Anybody with half of the interested intuition knows that dealerships have a very large cushion of markup that is theirs to do whatever they want with. They can let the potential buyer haggle the price down, bring a trade in of some kind or simply lower the initial price and advertise the sale of the day/weekend/week/month price. Call it what you will, it's all just BS marketting.

This bill needs to die. It's a very ill educated paper, written with a completely remote sense of it's basic affects. How many people still live in FEMA trailors? That went over smashingly on paper.

Edited July 31, 2009 by DaveBonds

[Inf]

... The difference is that it's not fake money figures being tossed around on a closing agent's desk. This is real money and it's ours. Our tax dollars are now lining the pockets of the dealerships, of the car manufacturers who have already had our tax dollars aiding them.

Actually, it IS fake money, and it's just another example of the federal government overspending and being sickeningly irresponsible. Future classic car issues aside, let's ask ourselves the question that should be more important to EVERY American, not just those of us with an appreciation for a fine automobile.

Question: where did that money come from?

Answer: our government "borrowed" it from the Federal Reserve.

The money our government spends every year on most federal programs is now created out of thin air by the Federal Reserve (~70% by dollar amount I believe, the rest comes from taxation on corporations). The Fed is a private banking cartel, which is no more federal than Federal Express - it is a very common misconception that the Fed is part of our government. This has been going on for years. We live in a country with the fiscal responsibility of a 17 year old with his first credit card, who assumes he will never have to "pay it back." Our country isn't the only one though; pretty much every "developed" country on earth today has a fiat currency that is continually being watered down similarly.

Also, those are technically not "our tax dollars" anymore. The truth sounds very cynical - with the debt already accumulated by the federal government, the total collective money taken in each year under the unapportioned (and thereby technically unconstitutional (another story)) federal income tax is not even enough to cover the yearly interest on the money already "borrowed."

Essentially, the Federal Reserve does what the government could have done on its own before the formation of the Fed was "approved" (during a congressional Christmas recess, when the vast majority of members of congress were days or weeks away by train). The only difference now is that instead of just creating this money out of thin air and contributing to inflation, now we have to pay it back with interest on top of that as well. I feel obligated to also mention that the dollar has lost 96-98% of its value since the Federal Reserve began to control the issue of our currency (a power explicitly given to congress in the United States Constitution). A dollar literally buys a nickel's worth.

Bernanke and his cronies would have you believe otherwise, but inflation is a fact even a 4th grader could comprehend if it were explained to them - when your economy has X amount of value in goods/services/etc, and you create an additional trillion dollars out of thin air (as the Fed has done since Q4 2008), each dollar is worth less, because each dollar essentially represents a 'slice' of our collective economic worth - the economy doesn't have any more REAL worth since last year (in fact, it probably has less), but now there are a lot more dollars out in the market representing that same or less amount of worth. Whether the US government does this, or whether some private entity does this, it has the same inflationary result. At least if the government did it, inflation would be the primary problem, not us having to paying back all this monopoly money later.

So yes, in a sense, that money flowing into the Cash for Clunkers program is essentially fake money. It was created out of thin air. Unfortunately, the value that money represents came out of your pocket, my pocket, and the pocket of probably every other person reading this thread.

When the value of our dollar is watered down by inflation, that chunk of money I have sitting in the bank loses value. Where does that value go? It goes to whoever receives the new "funny money," it goes to the huge corporations that wrecked themselves and should have gone bankrupt as a result. You and I essentially subsidized their poor and irresponsible business practices. The balance in my bank account may have stayed the same since last year, but rest assured, it lost value.

The American people should be outraged, but sadly, most people do not know the truth and would probably not care. Most people hear about the state of the economy from the mainstream media, which is controlled by entities such as General Electric and News Corp, which have vested interests in maintaining the irresponsible fiscal activities of our government - they need to keep that financial teat flowing with their much needed money. Do I even need to mention how almost all our career politicians are beholden to some special interest, typically by campaign financing either for them or against them? These crooks are not you or I; they benefit from this practice, while the rest of us pay for the difference in one form or another. Of course they will tell you that it's "the right thing to do" and that "you wouldn't understand, you're too stupid and economics is WAY to complicated unless you're one of us."

Don't even think of a second that this is a left wing vs. right wing issue - it is not. The typical stereotype is that "democrats just want to spend and tax!" and "republicans just want to spend...!" is bogus. What passes for a "conservative" today is no more fiscally conservative than the aforementioned 17 year old with his first credit card. They are one in the same on 99.9% of issues. Come election time, they will parade out a few less relevant issues they can afford to disagree upon in front of the financial powers that be and trump them up to be the most important life-changing decisions you will ever elect someone based upon - you will notice that the unsound nature of our economic practices is NEVER brought up by anyone except third party candidates that are marginalized in large part by the aforementioned mainstream media corporate management. We do not have a choice.

It'll soon be breakfast time in a few short hours.

On the menu: pancakes with syrup... OR, if you're in the mood for something RADICALLY different: pancakes with honey.

All I see is a restaurant that won't give me anything but pancakes.

Edited July 31, 2009 by Inf

[doradox]

I didn't think S30s would qualify anyway because the avg. gas mileage is better than 18 mpg?

Probably as written our babies wouldn't get crushed. But the point is maybe some future car nut will lack the cars and parts to pursue his/her dream.

First they came...

http://en.wikipedia.org/wiki/First_they_came...

Steve

[SportBikeMike]

Probably as written our babies wouldn't get crushed. But the point is maybe some future car nut will lack the cars and parts to pursue his/her dream.

First they came...

http://en.wikipedia.org/wiki/First_they_came...

Steve

I see your point. Unfortunately Z32s do qualify I believe.

Interesting link BTW. I've never seen that before...

[DaveBonds]

I know it's not actually real, Inf. I agree with you more than you may realize on our current status. GM needs to die among a few other parasitic corporations.

My point is that the money that our government is giving people, er, I mean giving the auto makers again is tangible. Weather or not it actually represents currency that was on fair trade is moot. If people think it's real, it is treated as such. Much like the witches were in Salem. Right, wrong, real or fake is all subject to change with opinion. Unfortunately, that opinion is now based on poorly educated worthless speculation instead of scientific fact.

And the way that this bill has been written and how it is now being executed shows it's true colors. I could have told you that it would fail miserably, even when I was seventeen. It doesn't take an economic engineer to realize that the money is going in the wrong places.

How many times will our government keep dumping money into the companies that caused this problem? We should be rewarding responsible financial behavior and support the companies that create legitimate products and jobs, so that they can continue to create more of the same.

How many credit cards will the seventeen year old get before someone is the wiser?

This bill needs to die.