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Several years ago, my wife and I evaluated buying a new car based on better gas mileage. At that time, the price of gas was about $4.00 per gallon and we were motivated.
Using simple logic based on the number of miles we drive per year and the cost of the new vehicle, we determined that the gas price would have to be over $7.00 per gallon before we could justify the expense of a new vehicle.
Obviously, gas has not risen to anywhere near this amount and we did not buy a new car based on mileage. However, we did buy a car based on comfort, safety and size.
How many families and individuals have gone through this review before buying? Probably millions.
Now, our U.S. Congress creates a "stimulus" program call Cash for Clunkers. I was curious as to the savings this program would produce by replacing lower fuel efficiency vehicles with higher efficiency vehicles.
What I discovered was INCREDIBLE!!
I have always assumed that our politicians were intelligent people. Now, I have serious doubts. Let me give you the bottom line first, then I will tell you how I came to it.
Each gallon saved in the Cash for Clunkers program will cost the U.S. taxpayer $393.44 each.
YES, YOU ARE READING THIS CORRECTLY...$393.44 per gallon!
Here are the calculations-
I used U.S. DOT figures released as of 8-3-2009.
Taxpayer Dollar Amount Spent as of 7/31/2009 is $1,000,000,000 ($ One billion)
Rebate per Clunker
Low $3,500
High $4,500
Average $4,000
Number of Clunkers Traded Based on Average is 250,000 vehicles
Based on Program Rules the Average MPG of Clunkers traded-in is 12.0 gals
Number of NEW vehicles purchased is 250,000
Average MPG of New Vehicles being bought *
Cars 28.3
S.U.V.'s 21.9
Trucks 16.3
Average MPG all New Vehicles 22.17
MPG Difference between New and Clunkers is 10.17 gals
Gallons Saved by Driving a New vs Clunkers is 2,541,667
Cost per Gallons Saved $393.44
* US DOT Report 8/3/2009
SUMMARY COST TO US TAXPAYERS $393.44 /gal
Where is the common sense in our elected officials?
Where is the simple math that every grade school child is taught?
Again, this is not a political question. This is a question based on pure common sense. What other decisions are being made that reflect this same lack of thinking?
And, what decisions are being made that will affect our lives and the lives of our families that we will not know about until it is too late?
Actually bought my car not long ago.......Paying for it. But hey its great that I am getitng to help someone else pay for their car also while I also pay for mine.
its great let me tell ya. It makes me very happy that I get to pay for my car and others also.
We already got to help pay for peoples house it would be stupid to not pay for their car also
So that's $3 billion dollars we gave to the auto industry to help them sell cars.
That $3 billion also indirectly helps the banks with all these new car loans.
Cars are not an appreciating asset here so what long term benefit do we get ?
Wouldn't that $15K credit towards homebuyers that got squashed have been a better carrot then $4500 towards a new car ?
well as long as you're happy that's all that matters
Yeah if Only I were happy. I am getting ticked off
As far as me giving. I have givin more to charity then our Vp now.
How is a person like me suppose to feel? I pay my bills I dont qualify nor would I want any of this free stuff because then I am stealing because I am able to pay my bills.
How about instead of this lame cash for clunkers program just not raise my taxes so much?!
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Who really benefits from this program?
