American Spectator has a nifty article today exposing the con of the Cash for Clunkers program. I've always believed that the program is a poor idea because it is an artificial manipulation of the normal economic cycle which always backfires on the other end.
Yet many are extolling the virtues of the program, celebrating the fact that dealers showrooms "are packed!" with people and "cars are selling!". Of course, the problem is that soon the $500 per month car payment will come due and not long after that, the repo man for some of these cars. Some of these buyers can afford the car and were probably waiting for the right incentive to leap, but a disproportional number, I'm betting, couldn't afford the purchase in the first place which is why they were still lumping to work in the old Toyota with 150,000 miles.
After the program runs its course, the artificial stimulation of new buyers will dry up the cobwebs will grow over the doors of the dealers.
The Specator article also addresses, of course, the fact that good, used parts to keep your car running will now disappear as the Clunkers are destroyed. Goodbye salvage yard. And the folks dependent on those used parts for their cars? Bus fare.
Read the whole thing; it's enlightening.