Cash For Clunkers Runs Out Of Gas ....

Once Again, Congress Makes a Plan, Then Fails to Fund It Adequately

This story should give you an idea of how bad the US Government can be at forecasting. If you think that proper forecasting isn't important, you'd better. With a Trillion dollar Health Care Plan coming this Fall, even a small actuarial mistake will cost taxpayers untold billions. First, we had the DTV switch, where they gave $40 coupons out to cover the costs - and the money ran out almost immediately. Now, the same thing has happened with Clunker for Cash.....

Let me give you an idea of what is going on right now, since this is my field of expertise. It is the 31st of July - the last day of the month. The final opportunity for car dealerships to finish strong in sales, or make up for a subpar performance. Dealers have spent hundreds of thousands of dollars each, knowing that this program would be in effect, and now they are stalled. No consumer with half a brain is going to buy a car today, when they can wait a week and get the $3500 or $4500 voucher. But instead of getting these sales today, they have to wait - and the sales reps will have to wait another month to get paid.

Now, if you think Cash For Clunkers is a win/win for everyone, guess again. Why? It all involves Trade Ins - even if you don't buy a new car. Here's how.... Let's say you own one of those Town Cars or Suburbans. There are now a glut of those same cars on the market available for sale, which then makes your car worth even less. Dealers know this, and they will get stuck with a load of these clunkers, and they will end up on Used Car Lots all ove America. They don't end up in a car crusher after all. So, they give you crappy trade in value on that car. So, you sell, you lose - you don't sell, you lose....

Congress has promised to infuse more moolah (translation - your tax dollars) into Cash for Clunkers. But, if you don't see the harbinger of the miscalculation of this program in the upcoming Health Care bill, then you are blind... When NASA had to calculate the area to send Apollo 13 around the Moon to get back to Earth, the margin area was equal to the depth of a single sheet of paper. Congress doesn't come anywhere near to this in regards to accuracy, and they need to. If they over or undershoot this badly when the Health Care Bill comes, America could find itself in the same place as Leonard in 'Full Metal Jacket' - in a World of Shit.

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