You are right. I would also add that they ignore the lost opportunity cost (lost spending in other parts of the economy or lost savings). And, if the action doesn’t work, they look for someone else to blame…usually the other party or that greedy capitalistic market.

Edmunds data already shows that sales have dropped 31% for autos since the height of cash for clunkers. They may get a short spike since it ends Monday, but then the lots will be empty.

What is really interesting is I have a friend who is a car salesman. He said that people were paying full sticker price for vehicles. The dealers wouldn’t budge since there were so many people shopping on the lots. So the savings from the clunker trade in was probably offset to a great degree by the lack of negotiating power with the dealer.

Why not give a tax break to all Americans and allow them to decide where they want to spend the money? Why mandate that it be used to buy cars? This seems like intrusive government meddling and redistribution of wealth.

I feel compelled to address your comment, “By all accounts, the Cash for Clunkers program has been a large success and has helped pump billions of dollars into the economy by creating new vehicle sales and thousands of jobs.”

The government doesn’t create demand as they produce nothing. They merely steered demand from one area to another. In this case, they pulled demand from the future to the present at the expense of taxpayers.

Many folks who bought a car and now face a car payment will probably cut expenditures in other areas such as dining, clothing, electronics, etc.

I am only throwing this out there because so many people think the government creates wealth through these types of programs. They don’t. They just squeeze the balloon at one end.

And, this comes from a guy who grew up in an auto town and has friends that work there.