Saturday, June 5, 2010

New Data Shows Cash For Clunkers Had no Net Positive Effect

The chart shows that all the billions in cash for clunkers did was move around when purchases would be made for a bit, not increase overall purchases as was the point.

"Here is the US Census data for auto dealer sales (source).  Thanks to my friend Scott who first pointed me to the analysis:

The dotted line simply averages the sales for the month of the clunkers program and the month after.  I think it is pretty clear that we spent a few billion dollars making some used car owners happy (by overpaying for their vehicles) but did absolutely nothing to move the trend line in auto sales, as the program appears to have just pulled forward purchases rather than stimulated new ones."

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