Congress Just Buying People Cars Now (opens in new tab)

Anyway, Yes, people still buy cars, that's for sure. Not as much as before, it is one of the industries that is hit hardest by the so called crisis. The theory goes that if the car industry can be rescued at least when we get out of this crisis the recovery will be a bit quicker.

Good point about the non-drivers' taxpayer money though, I hadn't thought about that at all. It's not an obvious point and - as a driver - I would feel uncomfortable about using such a subsidy but then again I have tried hard to stay away from subsidies as much as I can.

My theory is that subsidies are a subtle way of getting in to an unsustainable situation, it's living above your means by another name.

Sure, everybody else does it but that doesn't mean it is a good thing. Some subsidies I can see the point of, such as subsidized housing or food for people below the minimum income level required to have a chance to get out of that situation. But even there there are two sides to the coin, for some that works well, others lose their self respect because of receiving the money and give up altogether.

There are no easy choices these days, 'cash-for-clunkers', even if it is asymmetrical and will not have the positive effect on the economy that the pundits claim it will have has some positive side effects. Transportation is one of the major engines of the American economy, what with the government now being a large - and somewhat involuntary - shareholder in a car company you can't really blame them if they want to at least improve the market for vehicles so they can recover some of the money through the backdoor and create the right conditions for an exit.

Another downside of the cash-for-clunkers program is that it moves sales that would have happened anyway into a shorter window of time nearer to the present. The usual effect of such an activity is that it will be followed by a slump.