Congress Junks Clunkers Program

USA Today reports that the feds are suspending the newly launched "Cash for Clunkers" program:

Automakers have ordered millions of dollars in television ads. Dealers had the hot dogs, balloons and full-page Sunday ads in the newspapers ready to pounce on sales opportunities. And it is all in vain: the "Cash for Clunkers" program is on hold.

This would have been the first full weekend for the program. It was only last Monday that Transportation Secretary Ray LaHood officially kicked it off. Lots of momentum will be lost from the suspension, confirmed moments ago by sources.

The problem had troubles right from the start. While customers rushed to dealers with their worst-looking vehicles, dealers were trying to navigate 135 pages of rules and lots of red tape. The program will almost certainly begin again after a break -- but it's yet to be seen if the momentum can be regained. (more)

Local coverage in the Concord Monitor and Fosters Daily Democrat.

Congress handed out free money for people who were trading in their cars. People respond to incentives. This extremely short-term blip in auto sales will be absorbed over the next few months, when customers who would have been trading in their old cars aren't coming in. Is that short-term blip worth $1 billion? Sure, if you're raising campaign funds from the auto industry.

We have also lost the value of hundreds of thousands of functional cars that must be scrapped rather than remain on the road. Such destruction hurts our economy. Under Congress's logic, we should start tearing down houses to boost the housing market, burning wheat fields to pump up agriculture, and lighting fires in your closet to help J.C. Penney. Congress is not best suited to decide which cars should be on the road, and which should be in the junkyard. Yet they are taking a billion dollars from our future in order to enforce their preferences.