CA$H for Wintel Clunkers and Common $ense

Classic Clunker with Cedarburg, WI county fair light reflections.

According to a CNN money article on the Cash for Clunkers program:
  • The trade-in vehicle has to get a combined city and highway fuel economy rating of 18 miles per gallon or less.
  • The average fuel economy of new vehicles being purchased under Cash for Clunkers is 25.4 mpg
  • The average fuel economy increase from the old vehicle to the new is about 61%.
For this 61% fuel economy improvement in a relative small percentage of the U.S. car fleet, $1 Billion has been spent and another $2 Billion may soon be wasted. There are a number of problems with this program.
  • U.S. fuel economy peaked in the late 1980s and vehicles exceeding 25 mpg have existed since AMC's 1959 Rambler, so only those who deliberatly chose the lowest mpg vehicles can avail of the program.
  • Those who chose economy cars and other respectably efficient vehicles (Civics, Festivas...) are punished to subsidize those who chose inefficient vehicles (Hummers, Vipers...), in effect it is a regressive tax!
  • The real mpg/person savings can be negative, for example when an 18mpg 8 passenger vehicle is replaced with a 25.4 mpg 4 passenger vehicle.
  • The program also ignores the fact that it takes energy to crush an old but serviceable car and replace it with a newly built car.

If the Cash For Clunkers program had instead been directed to encourage companies and individuals to junk their Wintel PCs and replace them with Sun Ray thin clients, there is a potential for a 97.5% decrease in energy consumption. So why isn't there a Cash for Clunkers program for desktop personal computers?

Comments:

Very nice! Congress should also give tax breaks to companies that allow telecommuting full time. I used to drive about 200 miles a week just for work, now I drive about 40.

Posted by Thin Guy on August 06, 2009 at 08:44 AM GMT+00:00 #

I agree that their should be rewards for telecommuting. The very fact that by doing so they are reducing peak load on transport infrastructure, reducing emmissions and improving family lifestyle should attract at least a small tax benefit.

Posted by che kristo on August 06, 2009 at 05:28 PM GMT+00:00 #

Thanks for the comments. A telecommuting tax write off for employers would make so much sense. It would even help those in non-telecommutable industries by reducing unnecessary traffic. But cash4clunkers 2.0 passed the Senate today.
Score:Crackpot economics:1, Common Sense:0

It's amazing that this issue fell so starkly along party lines, you'd think D's wouldn't want to waste their mandate on such an obvious sham. The Irish gov tried to prop up its property industry a few years ago with a similar tax bailout, it only made the fall more severe when it eventually had to happen.

Posted by bnitz on August 07, 2009 at 08:17 AM GMT+00:00 #

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