"Ready for another cash for clunkers program?" asks Kerry Picket in the Washington Times. According to her, the $3 billion free-money giveaway of 2009 predicated on consumers junking their old cars is taking on a new form -- this time for "green" vehicles. And it has General Motors giddy.
Picket says the administration is considering changing the already-existent $7,500 tax credit for green cars like the all-electric, and wildly unpopular, Chevy Volt. Instead, and according to a document obtained by Edmunds.com, the credit would become "a rebate that will be available to all consumers immediately at the point of sale.”
Sound familiar? Joe Biden thinks so.
The Detroit News reported last month that the new program has Biden experiencing some Cash-for-Clunkers deja vu:
Last month, the White House endorsed making the $7,500 tax credit for electric vehicles available at the time of purchase. "You won't have to wait," Vice President Joe Biden said at an a Indiana battery assembly plant, adding it would be like the cash-for-clunkers program.
The Department of Energy sees the parallels too. David Sandalow, assistant secretary for policy and international affairs, explained to Bloomberg News in February:
Consumers who have used hybrid- and electric-vehicle credits have received the benefits when they filed their tax returns. The administration wants to make the cars more affordable at the point of sale, in the same way the 2009 “Cash for Clunkers” program worked, Sandalow said.
One of those leading the charge is Michigan Democratic Senator Debbie Stbenow, whose home state would stand to benefit from propped up demand:
But lest we forget how unsuccessful Cash for Clunkers was, Picket explains via Americans for Tax Reform:
The program began on July 24th with a budget of $1 billion and by July 30th they were out of money. Giving people “free” money to buy cars is definitely popular. Congress then allocated another $2 billion that lasted almost until the end of August. That’s right, $3 billion in under a month. The program didn’t help the economy or auto industry. Despite a bump in the 3rd quarter to GDP and auto sales, consumer spending dropped 0.5% in September and the vehicle output bump was artificial and unsustainable, meaning it will drop off considerably in the next quarter as the market stabilizes to its real level. As Nick Gillespie and Veronique de Rugy pointed out today over at Reason, even the reported GDP bump is misleading, because is includes government spending. So if government spending increases it will increase the GDP, but that doesn’t mean any more was produced.
Naturally, General Motors is excited about the idea. "We are pleased to see Sen. Stabenow's legislation that integrates all of the components necessary for successful acceleration of electric vehicles in the marketplace," GM spokesman Greg Martin told the Detroit News. "We look forward to working with Congress on legislation that leads to widespread adoption of electric vehicles."
But here's the thing: if you need "legislation" in order to ensure "widespread adoption of electric vehicles" you probably need a) a different product that people actually want, and b) a new business plan.
Unless you're General Motors.
Read Picket's entire article.