Cahs for Clunkers German style

Since the begining of 2009 the German government was offering €2500 for your old car in connection with buying a new one. Sounds sweet don't it? On the surface it does. But I like to dig. I have a brand new shovel and I'm itching to use it.

This program, be it in the USA or Germany was reckless and stupid for everyone all around. Here's why:

• Less "older" cars on the roads mean less cheaper cars for lower income people to buy. A damn good example is a friend of mine has a daughter. She just turned 18 and is ready to get her license. Now my friend wants to buy her a car but just can't see spending more than €500 for a car that is most likely to get trashed within the first year. He is having a damn hard time finding a safe decient car for €500 for his daughter.
• Mechanic shops. Wierd but a major backlash of getting so many older cars off the road and replacing them with new cars hurts mechanics and thier livelyhood. Less cars to fix means less money in thier pockets meaning less people he can hire. More unemployment.
• Along those lines cars that were "sold" in to the program had to be scrapped. Including the parts. That means junk yards are getting fewer used parts and that drives up the price.
• Large strain on fixed incomes. Suddendly people who baught into the lie of €2500 for thier old car are shelling out a lot of money every month for a new car. Money that will not be spent on other things that help the economy in the longer run.
• Before the programs went in to effect the car market was a buyers dream. there was a lot of room to haggel over a price. Suddendly the market dried up and prices have gone back up. The market was over flowing with new cars and dealerships were itching to sell those cars. I talked to a dealership in early Janurary and I could have bought a new VW Golf. Normal price for the model and packageI was looking at was €32,000. I had the mad down to €20,000 and he was throwing in new summer tired on top! That same car today I would have no chance at all to talk the dealer down.
• In the US most cars that were turned in were American cars. A full 80% of the cars bought were made in Japan and Korea! The US stimulated the Asian car market! I am sure the Japanese and Koreans are happy about that and are hoping for more. Change we can believe in Mr President?
• Lastly in the US not many people realized that the $4500 they got out of that program is taxable as income. SUPRISE SUPRISE SUPRISE! You paid part of that "free" money you got! and Will be paying for the next 30 years.

So basicly no one with any sense in thier heads was asked if these programs were good for anything.

In the US Obama had his speach about health care. He openly lied about many things and stretched some figures on others. If the cash for clunkers programs are any indication of government run anything please leave me out of it.