President Barack Obama’s $3 billion “Cash for Clunkers” taxpayer-funded boondoggle artificially drove car prices up, not down. Look around at how high used cars are compared to before Obama’s failed Cash For Clunkers Program.
Removing 690,000 used cars from the market was a draconian move that should have never been done in a free market. Who paid? The Poor.
“Jacksonville State University economist and Ludwig von Mises Institute scholar Christopher Westley said that the program “sticks it” to the poor and lower-middle classes by raising the price of the remaining cars in the secondary market, as well as by raising the general price level resulting from the monetary inflation required to finance it. Westley called CARS the “I Hate the Poor Act of 2009”.
The poor who are not familiar with cash flow or interest costs were deceived into trading in a clunker, getting far more than the clunker was worth but they had to pay for a new car for which they did not have the money so they borrowed the money, paid full price for the new car. paid for the interest for a five or even a seven year loan and made their lives more miserable. The government raised the cost of the remaining used cars which had the effect of costing the poor more money for a used car.
Government Intrusion into any market increases the cost of the products in that industry. Cash for Clunkers increased the cost of cars. Obamacare has increased the cost of medical care and medical insurance. Government college tuition refunds increased the cost of college.