Today’s post is by my husband, David. He works in two careers, as an insurance underwriter and as a musician. He doesn’t like the new Cash For Clunkers program.
By now you’ve probably heard of the Cash For Clunkers program. It is a classic Scrappage Program. The program gives a certain amount of cash subsidy to buyers of new cars as an incentive to trade in driveable cars with poor fuel efficiency and of model year 2001 or older. The whole program seems to be a subsidy to the auto manufacturing industry. I suppose there is an environmental benefit in getting older cars off the road due to their emissions and fuel inefficiency, but we are also in a deep recession that seems to get worse and worse in the rear view mirror. Every quarter, the economic statistics seem to reveal that the recession started earlier and is much worse than any of the experts thought.
The Cash For Clunkers program bothers me. It doesn’t bother me for political reasons or for the fact that the government is spending money they don’t really have. The program bothers me because more consumer debt is the last thing the average person in America really needs. America tends to finance new cars. Let me scratch that – America tends to finance everything! Including the government’s financing of the Cash For Clunkers program! (No offense intended if you are the 0.0000001% that just wrote a $32,500 check to pay outright for your new 2010 Toyota Highlander.) Kerri and I both own cars that are 2001 or older. Neither car has a payment. They are not very pretty. Both have been involved in wrecks and have well over 100,000 miles. I was recently invited to a fundraiser at a posh restaurant and hoped that nobody saw me getting out of my clunker to go hear a speech by our district’s congressional representative. However, after prayerful thought, we decided it was a good idea to avoid going out and financing anything during a time when many in our country don’t have jobs. Again, not everybody is in our situation with only one income and three children. What ever happened to being content with what you have?
My beef with the program is that it guides Americans to buy things they cannot pay for with cash. 99% of Americans are going to finance this purchase. Debt not only adds risk to our lives, but our childrens’ lives. The return to thrift, frugality, and saving was the one good thing that I thought would come out of this recession. I’m just disappointed that our leaders want to undermine the one good thing about the recession.