Rantings and tirades of a frustrated economist.
Congratulations on allowing Al Franken to be elected to the US Senate.For the first time in five years I'm not as embarrassed about my own state's Senators anymore.
In semi defense on the gas-guzzler rebate, that program was probably put in place when the economy was in better shape, and it is quite difficult to kill a government program.But, the decision to EXPAND the program, despite the fact that CA is essentially bankrupt? Who elected these idiots?This just enforces my decision to keep a close eye on California. What is going on there is what will be happening in the US in a few years. It will tell me where to invest, what industries, and when.
So much win.
I was looking at the math behind this kind of "green rebate scam"... and it looks quite smart. not socialist oriented, just smart.the only bad part is that you loan 4K to somebody to buy a new car but:1) sales tax you get back on that purchase and eventually property tax (if any)2) tax over the insurance of a new car (higher than an old POS)3) create an "excuse" to put a steep carbon tax on fuel based on new fuel consumption. 4) force owner of POS to trade in at the dealership.
Oh yeah!?! Well at least we didn't just elect Al Franken to the Senate.
California, New York, New Jersey: all suffering from the same "disease" according to WSJ. Good article: http://online.wsj.com/article/SB124597150183556945.html
There's nothing about this plan which is "smart." In fact, the deeper you look into it, the more stupid, wasteful, and controlling it appears.First of all, they are mandating that the trade-in vehicles be destroyed. As I've pointed out many, many times on my own blog, this is environmentally stupid. If the old vehicle is still running, you emit less CO2 by keeping it on the road until it dies than you save by producing and using a brand new Prius. And, of course, they are mandating that the trade-in be operational so driving your car into the ground is not an option. Some people might find an incentive to waste money getting a dead car "operational" just to meet this requirement. If you think this is a good thing for the economy, you don't understand The Broken Window Fallacy.The law requires that the vehicle be registered to the person trading it in for at least a year to prevent people from buying crappy cars at low cost and getting a bigger discount. This is economically stupid. There are people who are willing and able to buy a new car. There are other people who have an old car but are unwilling or unable to buy a new one. This law prohibits gains from trade between these two groups.If you are trading in a pickup truck or SUV, your new vehicle need only improve gas mileage by a few miles per gallon. Again, the gas/CO2 savings won't offset the energy/CO2 from producing the new vehicle.The law does not allow someone to get the subsidy by buying a used car, which eliminates gains from trade and gains for the environment for buying four year old Priuses by trading in a (dead or dying) SUV.The article showcases one guy who benefitted remarkably from the program, but when you crunch the numbers you realize that very, very few people qualify for this and those who do probably would have bought a new, higher mileage vehicle WITHOUT the subsidy.So this bill tries to do everything and ends up achieving nothing except transferring more tax dollars from everyone in the state who doesn't benefit to the few people who do.This is a great example of poor social engineering.I've got a much better idea: cut our taxes and I'm sure a lot of people will buy lots of brand new, fuel efficient cars."I sit on your back, choking you. And I promise you every sort of relief under the sun...except getting off your back."
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