Brought to You by the Same Government that Wants to Run Your Health Care
"Cash for Clunkers" has run out of money after only one week, and the program, which was supposed to last through November 1, is being suspended.
Ed Morrissey explains that "there’s a lesson to be learned about government distortion of private markets":
When government artificially inflate the value of a commodity in attempting social engineering, it usually either spends more money than they initially realize, leave the private sector holding the bag, and make themselves look foolish … at best ...
Why was it “explosively popular”? It made worthless cars valuable again. The vehicles got $4500 for a brief window rather than their previous real value, in many cases a fraction of the government payout. That inflated value prompted people to rush to their local dealers to use their government subsidy to buy new vehicles.
The government imposed all these costs and heightened expectations on car dealers without having a plan. And this was just to kill a few hundred thousand gas-guzzlers. Imagine what it will be like when the government takes charge of keeping hundreds of millions of people healthy.
Of course, no one has really explained why taxpayers should subsidize the destruction of gas-guzzlers (we do remember that we’re paying those ridiculous subsidies, don’t we?) that many of us couldn’t afford when they were sold as new, or that we had better sense than to buy. No one explained why taxpayers should subsidize sub-prime loans for people who didn’t qualify to buy the houses they wanted ten years ago, either. It’s yet another example of how government rarely learns from its own mistakes. This one, fortunately, will be much less costly, but therefore also much less likely to teach people anything.