The first is that the program is simply not ambitious enough — in an effort to make sure American carmakers are among the biggest winners, it set the mileage requirements for newly purchased cars too low. The second is that Congress and the White House are essentially rewarding car owners who in years past chose to buy gas-guzzlers — violating Mr. Obama’s own first rule of environmentalism, which is that polluters should pay.Even members of the Obama administration are among its critics.
And the third question is the one that haunts any big government subsidy: Does it make more sense to pay Americans to buy a new, slightly more efficient car than it does to insulate their homes? Or to go to the health club, in hopes of lowering future health care costs?
“What we ended up with,” said one senior Obama administration official, who would not speak on the record because he was being critical of his own administration’s environmental bona fides, “is a program in which you trade in old clunkers for new clunkers.”The third criticsm has to do with the real reason behind the program - to stimulate car buying because of the depression that that sector has been in. And it has done that. But is the plan to keep the program forever? Buyers suspect not so that is why they are trying to take advantage right now. So all we've done is shift the timing of people's purchases. Those who were going to buy a car earlier this summer held off until the program went into effect. Some people moved up their purchases. However, it is doubtful that the $4500 government gift convinced many who weren't intending to buy a car anyway to go ahead and trade in their supposed clunker for a new car. This is a temporary infusion into the market and, while welcome for those in the industry this month, won't do anything to transform the market for the future unless the government decides to put the program in place permanently.