John: Let me make a couple of points.
First, $3 billion isn’t so much in the grand scheme. And it would have been fine, as far as these things go, to run this program without destroying the used cars. Oh sure, getting these cars off the road helps clean up the environment to some degree, but manufacturing new cars has its own environmental cost. And trading them in and then reselling them would have still gotten more people into fuel efficient cars without hitting low-income Americans in the used car market. Eventually these cars are going off the road anyways, but if we give it time there will be more newer, more fuel efficient used cars to replace them with.
Second, why is this program a better stimulative or environmental program than spending $3 billion on solar energy credits? Or any other credit toward green, sustainable energy? Even just more credits toward buying fuel efficient cars? It’s the destruction of the used cars that’s the problem here, not the spending of tax dollars. At least that’s my take.
Third, of course the program was a success. If your program is basically handing out money and lots of people take that money and you measure the success of the program by needing to give away even more money, well then how could that not be a success?
And last, yes C4C kept the auto industry afloat for a while. But we have a history of keeping that industry afloat and it hasn’t helped them in the long term. Even so, we could have kept them afloat by offering credits rather than destroying cars.
What next – should we save the publishing industry by burning books?
Was C4C the worse program ever? No. Did it provide short term stimulus? Yes. I’m simply saying that A) we could have done it in a way that was more fair to used car buyers, and B) we certainly could have made a more environmentally friendly program that was also very stimulative – in both the short and long term. Judging C4C on whether people participated and liked it is a pretty poor way to gauge a program’s success.