tagged w/ Cash for Clunkers
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A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.
http://freakonomics.blogs.nytimes.com/2010/09/14/the-verdict-on-cash-for-clunkers-a-clunker/A key rationale for fiscal stimulus is to boost consumption when aggregate demand is... more
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The Commerce Department said today that the country's gross domestic product grew in the third quarter for the first time this year, which signal the end of the recession. Fireworks! Celebration! Champagne! Not so fast. Largely this is thanks to government programs like cash for clunkers and the first-time homebuyers' tax credit. Once those programs start to wane, the economy is going to have to still keep growing on its own. Our friends at Goldman Sachs explain:
“The big picture perspective is that things have improved,” said Jan Hatzius, chief United States economist at Goldman Sachs. “The question is, how sustainable is this growth going forward?” Job-seekers, he says, probably will not see the benefits of a recovery for months to come.
What's your recession story? Your community's? I wonder if anyone sees signs of this change around them or if this number is just a number.
Leave your comment on Current News.
Recently on the Current News Blog: - The Tamil Tigers and innovations in IEDs - The UN Cuba vote and Sean Penn's scoop - 86 dead in Pakistan attack; Views from Peshawar - Seattle crackdown: Child prostitution in the United States - Should Oakland legalize the sideshow?The Commerce Department said today that the country's gross domestic product grew... more
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Search online for "Cash for Clunkers," and here's one thing you'll find: stories about its negligible overall impact on the economy.
Wrong, says Maritz Automotive Research Group. The Toledo, Ohio, independent automotive research company recently surveyed participants in last summer’s federal program designed to stimulate new-car sales and get gas-guzzlers off the road. On Tuesday, the company shared its results.
One key finding: 90 percent of those participating in Cash for Clunkers said they would not otherwise have bought a new car.
According to federal government data, 677,000 purchases were made through Cash for Clunkers from late July through August. Maritz’s research showed that 542,000 were incremental new car or truck sales, meaning those purchases would not have occurred without the incentives. Previous estimates by industry analysts put the incremental sales figure between 125,000 and 346,000.
The government’s Car Allowance Rebate System, or CARS, offered vouchers of $3,500 or $4,500 to owners of older, gas-guzzling vehicles who traded them in for new, fuel-efficient models. The program, which was expected to last several months, was so popular that it ran out of its $3 billion in funding in two months.
more @ linkSearch online for "Cash for Clunkers," and here's one thing you'll... more
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President Barack Obama will announce details of an estimated $6 billion program on Tuesday to generate jobs by providing incentives for Americans to make their homes more energy efficient, the latest step in his bid to convince Americans he can ease their economic woes.
The plan, which must be passed by Congress, is intended to prompt Americans to invest in everything from insulation or new windows to overarching energy upgrades of their homes, creating construction and manufacturing jobs, and boosting energy efficiency.
"The current thinking is that the program would be in the range of $6 billion, and we think that would be an appropriate range for a program of this magnitude," said a senior administration official, who asked not to be named in advance of Obama's comments.
Obama will spell out details of the plan during a trip to Savannah, Georgia, the latest stop on his "White House to Main Street" tour, during which he discusses ideas for rebuilding the economy.
With unemployment just below 10 percent, Americans are anxious about the country's finances, nudging Obama's approval ratings to 50 percent or below and potentially dimming his fellow Democrats' prospects in November's congressional elections.
The program involves a range of incentives for consumers, including rebates from stores that sell building materials, companies that install the equipment and utility energy efficiency programs. Consumers could also get rebates for a range of home energy upgrades.
Dubbed "cash for caulkers" after last year's successful "cash for clunkers" automobile trade-in program, the program was first announced in early December. Obama called on Congress to support it in his State of the Union address in January.
(Full article at link)
Do you think it's a good idea? Will it prompt people to make their homes more energy efficient? Do you fee that is enough? Or do you think this program is a waste of time, money, effort, etc.? Discuss!President Barack Obama will announce details of an estimated $6 billion program on... more
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islek
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1 year ago
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Overall, U.S. auto sales dropped by 23 percent in September compared to the previous year. GM dropped by 43 percent and Chrysler was down 42 percent. Showing greater strength, Ford managed to hold its sales decline to 5 percent.Overall, U.S. auto sales dropped by 23 percent in September compared to the previous... more
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maybe now we wont have to pay for those stupid commercials.
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Before you purchase a new car/truck, make sure that vehicle is the right one for your need.Before you purchase a new car/truck, make sure that vehicle is the right one for your... more
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An analysis of the cost-benefits of the recent “Cash for Clunkers” program.
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Ford was the only domestic car manufacture that did not pony up to the Federal government, hat in hand, for a bailout for the cash for clunkers.Ford was the only domestic car manufacture that did not pony up to the Federal... more
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“American consumers and workers were the clear winners thanks to the cash for clunkers program,” said U.S. Transportation Secretary Ray LaHood. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment.”
“This is one of the best economic news stories we’ve seen and I’m proud we were able to give consumers a helping hand,” Secretary LaHood said.“American consumers and workers were the clear winners thanks to the cash for... more
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Later this fall, a new cash incentive program may be helping kitchen appliances get a sales boost with $50 to $200 rebates towards new and energy efficient household appliances, not just refrigerators as suggested by the name. The application is still in progress and if passed, could start the program at the end of November 2009.Later this fall, a new cash incentive program may be helping kitchen appliances get a... more
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Most of the money is used up and there is only about $600 million left. Some dealerships have not received their money from the government.Most of the money is used up and there is only about $600 million left. Some... more
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The $3 billion Cash for Clunkers program will shut down on Monday, the government said Thursday.
Dealers must submit any pending Clunker deals, including any necessary paperwork, by 8 p.m. ET MondayThe $3 billion Cash for Clunkers program will shut down on Monday, the government said... more
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A Colorado car dealer got a shock when a man drove in with a trade in the cash-for- clunkers program, a 1985 Maserati BiTurbo.
The car is in almost pristine condition, KUSA-TV, Denver, reported. There are only 18,480 miles on the odometer.
While the Italian sports car stands out among the battered trucks and SUVs other people have brought to Go Subaru in Golden, it qualified under the program. The owner got a $3,500 rebate on a new Subaru Impreza.
Wes Guthrie said the owner complained the Maserati would need work after being driven for 10 minutes. He had been trying to sell it for months and finding no takersA Colorado car dealer got a shock when a man drove in with a trade in the cash-for-... more
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The Obama administration plans to end the popular $3 billion Cash for Clunkers program on Monday at 8 p.m EDT, The Associated Press has learned.
Two congressional officials familiar with the plan say the Transportation Department will wind down the program that offers car buyers rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models. The officials spoke on condition of anonymity because they were not authorized to speak publicly about the plan.
The Obama administration was set to announce details on Thursday.
Transportation Secretary Ray LaHood reiterated his pledge that dealers would be reimbursed for the incentives.
“We don’t want to run out of money. And I want to be able to substantiate what I’m saying here. If you do a deal with us, you submit the paperwork, you will be paid,” LaHood said.
The program offers car buyers rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models. Department officials met with car dealer trade groups on Wednesday to discuss how the program will end and respond to complaints over a backlog of rebate payments to dealers.
Through early Wednesday, auto dealers have made deals worth $1.81 billion and are on pace to exhaust the program’s $3 billion in funds in early September. The incentives have generated more than 435,000 vehicle sales but dealers want a clear plan on when the rebates will no longer be available so they don’t end up on the hook for any of the incentives.The Obama administration plans to end the popular $3 billion Cash for Clunkers program... more
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This was going to be an article about how the Obama administration’s “Cash for Clunkers” campaign is an assault on the poor — which it is, because it breaks the flow of newer used cars to poorer people — but, in gathering facts for it, I came to realize that another of the unintended consequences of this self-destructive law is that it, literally, will increase pollution.This was going to be an article about how the Obama administration’s “Cash... more
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critic
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2 years ago
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There isn't a better commercial for Obama's cash for clunkers stimulus programs lifting us out of the Bush Recession (which began in Dec. 2007) than one of the highest ranking Republican duing the Bush Administration explaining how reality changed his mind.There isn't a better commercial for Obama's cash for clunkers stimulus... more
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It’s Cash for Clunkers - but for home buyers.
That’s how Sen. Johnny Isakson (R-Ga.) described his $15,000 home buyer tax credit proposal.
The proposed legislation would have given a $15,000 tax credit to any home buyer who bought a home, regardless of income. Sen. Isakson’s proposal would have also extended the date of the proposal for a full year from the date of enactment, making home buyers eligible for the tax credit well into 2010.
The proposed $15,000 home buyer tax credit was supported by the National Association of Realtors (NAR), the National Association of Home Builders (NAHB) and the Mortgage Bankers Association of America (MBA) - three of the strongest lobbying organization in Washingon, D.C.
(FYI: The Realtors are said to be the top lobbyists.)
At one point, even Shaun Donovan, Secretary of the Dept. of Housing and Urban Development (HUD) was considering it.
But last week, the Senate voted 47 to 50 against lumping Sen. Isakson’s proposed tax credit in with the $2 billion infusion destined for Cash for Clunkers. Isakson then voted against spending an extra $2 billion on Cash for Clunkers. Tit for tat: It’s the Washington way.It’s Cash for Clunkers - but for home buyers.
That’s how Sen.... more
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With the program’s environmental and economic benefits nearly negligible, billions could have been better spent encouraging more people to buy cars that make a real difference – plug-in hybrids.With the program’s environmental and economic benefits nearly negligible,... more
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khsing
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added this
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2 years ago
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The popular "cash-for-clunkers" program is boosting U.S. auto sales and manufacturing but is also slashing donations to charities that rely on gifts of cars to fund social programs, charity officials say.
Volunteers of America and other charities that receive tens of thousands of cars each year said such donations have quickly fallen up to 12 percent -- and fear a 25 percent drop eventually, or over $100 million -- as owners rush to trade gas guzzlers for new fuel-efficient models while federal rebates last.
"We started seeing it right away in July" when the program began, said Jim Hartman, vice president of vehicle donations at Volunteers of America, a nationwide charity. "It varies by market, but there's been an 11 to 12 percent drop compared with last year."
"The cars I'm seeing cashed in as clunkers, like older SUVs, are absolutely the typical donation to us," he said.
The clunkers program gives consumers a U.S. government rebate of up to $4,500 for trading in older, inefficient vehicles for new, fuel-sipping ones. Washington scrambled early this month to add $2 billion when the popular program's initial $1 billion funding was quickly spent.
Rick Frazier, director of the car donation program at The Military Order of the Purple Heart, which assists U.S. veterans, estimates the $3 billion will result in 700,000 clunker trades.
Frazier said charities would normally receive 25 percent of those 700,000 cars and, at an average value of $600 each, they could be out $105 million over 24 months.
"That will be devastating," he said. "A lot of services will have to be cut."
HELPS VARIETY OF THE NEEDY
Over the last 20 years U.S. charities have started up car, airplane and boat donation programs they convert to cash that helps fund social services for the needy, including the elderly, the homeless, disabled vets and at-risk youths.
Volunteers of America and Purple Heart each get about 40,000 to 50,000 car donations a year. Many go to auction while others are sold at a discount to low-income Americans.
But the clunkers program is also having social benefits by jolting the U.S. economy and putting people back to work.
Ford Motor said last week the program has ignited sales, prompting it to reopen plants and increase third-quarter production by 18 percent to 495,000 vehicles, especially its fuel-efficient Focus and Escape models.
Officials fear the clunkers' impact will linger for six to 12 months as hundreds of thousands of trade-ins are squeezed into the summer months. Over the next year, Volunteers of America's car donation revenues could be cut 25 percent, Frazier said.
"People usually take their time shopping for a new car, inquiring how much their old vehicle might fetch as a trade in," Hartman said. "We wouldn't get them this week or next week but spread out over a year they'd come in."
Only clunkers still running are eligible for rebates. But charities are still getting "non-runners," or junk cars, that aren't eligible for the federal program.
Volunteers of America and Purple Heart have yet to alter their programs to inspire donations, officials said.
But Melwood, a Washington-area charity that helps people with disabilities, partnered with a popular restaurant chain to offer a $100 gift certificate to people who donate cars.
Under current law, donors get a tax deduction of up to $500 or the car's selling price if a charity sells the car.
But Hartman said he hopes Congress will approve a bill pending in the House of Representatives that promotes charitable donations of cars, boats or airplanes by allowing tax deductions of up to $2,500 or the item's appraised value.The popular "cash-for-clunkers" program is boosting U.S. auto sales and... more
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xiola
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2 years ago
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