Cash for Clunkers Had Modest and Short-Lived Effects (2024)

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How effective was Cash for Clunkers? ›

A 2013 Brookings Institution study found that the Cash for Clunkers program resulted in a modest short-run stimulus effect (specifically, an increase in vehicle production, GDP, and job creation), but that "the implied cost per job created was much higher than alternative fiscal stimulus policies" and "these small ...

On June 24, 2009, President Obama signed into law the Car Allowance Rebate System (CARS, commonly known as 'Cash-For-Clunkers'), one of several stimulus programs whose purpose was to shift expenditures by households, businesses, and governments from future periods when the economy is likely to be stronger, to the ...

The federal government required dealerships to pour sodium silicate, or liquid glass, into the engines of the traded-in clunkers. The solution destroys the engine, ensuring that the old cars and trucks never end up back on the road.

A few billion dollars worth of wealth was destroyed. About 750,000 cars, many of which could have provided consumer value for many years, were thrown in the trash. Suppose each clunker was worth $3,000 at a guess, that would mean that the government destroyed $2.25 billion of value.

The program was bad fiscal policy, bad economic policy, and bad environmental policy. The trifecta of Obamanomics. No wonder the United States suffered the weakest recovery of the post-WWII era.

Cash for Clunkers was a U.S. government program that provided financial incentives to car owners to trade in their old, less fuel-efficient vehicles and buy more fuel-efficient vehicles.

If you're in California, you still have the option to sell your car to the state and between $1,000 and $1,500 for it under the Consumer Assistance Program (CAP) vehicle retirement option. However, there are some restrictions and caveats.

Under the $2.85 billion "Cash for Clunkers" program, the federal government paid automobile dealers between $3,500 and $4,500 each time a customer traded in an older, less fuel-efficient vehicle and purchased a newer, more fuel-efficient vehicle.

Then, lifting the hood, Henning poured a jug of "Clunker Bomb" -- a sodium silicate solution -- into the engine chamber. The liquid mix hardens as the engine runs, causing it to irreversibly seize up.

After your new-car purchase, the dealer is obligated to drain your old car's oil and replace it with a sodium silicate solution, also known as liquid glass.

Why do junkyards crush cars? ›

The most obvious reason is so they take up less space. But why are we scrapping, shredding and junking cars to begin with? Recycling cars is a lucrative business, and it makes environmental sense. The sale of reusable salvage from old cars is only a small piece of the auto recycling pie.

The growth of the automobile industry caused an economic revolution across the United States. Dozens of spin-off industries blossomed. Of course the demand for vulcanized rubber skyrocketed. Road construction created thousands of new jobs, as state and local governments began funding highway design.

How Long Did The Cash For Clunkers Program Last? On July 31, 2009, the "Cash for Clunkers" program began. The program ran until October 1, 2009. It was extended into November 2009 because of the high demand for the rebates.

“We find that total revenue to the auto industry was significantly reduced due to the environmental goal of the policy. If the policy had not been put in place in summer 2009, then total revenues to the auto industry from summer 2009 to spring 2010 would have been several billion dollars higher.”

The motor oil is drained and replaced with a sodium silicate solution, then the engine is started and run until the solution, becoming glass-like when heated, causes engine internals to abrade and ultimately seize.

Since being featured on the first episode of The Profit, the brothers still argue, but the business continues to run, and more successful than ever. 1 800 Car Cash has added over 100 locations and became a NASCAR sponsor for national car purchasing.