Cash for Clunkers – Deal? Or, No Deal?

August 9, 2009

So, here we are.  It only took the Government approximately two weeks to spend $1 billion (that is with a ‘B’, as in “Bucks”) on the “Cash for Clunkers” program.  Congress would have been happy to spend more of your hard-earned money up front, but $1 billion is all that was allocated in the bill.

Now we are looking at round two, and this time Congress is doubling the effort.  Because it worked so gol-darn well, the Government is going to authorize another $2 billion for the “Cash for Clunkers” program.  So ante up folks, Washington is feeling generous, as the 2010 campaigns will be getting under way.  They need a way to redistribute your wealth to make them look good and buy some more votes.

Let me state, for the record, I understand there are a lot of people that, due to the program, have new cars parked in their driveways that would not otherwise be there.  Also, there are that many older cars that no longer plague our roadways.  However, I must ask the question.  Have any of these people thanked you for your contribution to the betterment of their condition?

Yes, America.  You are now owed a great debt of gratitude for assisting in the purchases of all those new cars.  How many?  At $4500 each, $1 billion buys a total, of a little over 222,000 down payments on new cars.  At an average purchase price of approximately $25,000 per new car, the program should account for gross sales of just over $5.5 billion for the auto industry.

Bear in mind, the “Cash for Clunker” program allowed foreign manufacturers in on the deal as well, so Detroit and Government Motors will not glean all the profits; as a matter of fact, they held “true to form” and maintain their dismal market share.

For the moment however, let us assume all the cars purchased, with the assistance of the program, were purchased from Government Motors and Chrysler.  When you consider that most well run corporations operate at a profit of less than 10% of gross sales, and for purposes of recognizing that GM is now leaner and more efficient operating under President Obama, we will allow the full 10%; the program produces a profit of approximately $550 million.

If GM and Chrysler would have been the sole beneficiaries of the program, and all the profit went to repaying the massive bailout of the auto industry, they still owe the Taxpayers approximately 14.5 billion to the tax payers.

However, those $4500.00 payouts merely provide down payments; maybe we have missed the boat on this one.  Maybe the real payback is going to come from the interest earned by the finance companies, which the Government has their meaty little hooks in as well.  After all, according to the numbers used above, the finance companies would have financed some $4.75 billion, which would produce approximately $4.5 – 5 billion of gross revenues, to the finance companies, over the next five to six years.  At 10% profit, 100% of which being paid back to the Taxpayers, that should put another $500 million back in our pockets by the end of 2015, or a little under $100 million per year.  What a deal!

All right, it is time for a reality check.  The fact is, the money supplied to fund the “Cash for Clunkers” program, was first borrowed by the Government, some of which at rates reportedly as high as 30%.  In the end, you and I get to pay the tab for all those new cars, and we never even get to see them, let alone drive them.  Then of course, there is the pesky little fact that we get to pay for them at the government deficit rate, which means each car will cost up to $100,000.00 instead of the $25000.00 purchase price.  Oh, happy day!

Think about it; the Government borrows $1 billion to loan out in $4500 increments, to people who could not otherwise afford it, to purchase approximately 222,000 automobiles, at an average cost of $25,000, and we get to pay back an amount, of up to ten times the original amount borrowed by the government, to satisfy the debt.

I thought President Obama was being hailed, by some on the left, as the smartest President we have ever had.  I might be missing something here, but I do not understand the math on this one.  Maybe the tried and true formulas of mathematics have changed since I went to school; or maybe this is what they were referring to by “New Math”.

The simple truth is, America cannot afford this, or any other give-away programs intended for the sole purpose of buying votes.  “Cash for Clunkers” is not improving the economy or consumer confidence with any sustainable influence, nor will it.  Moreover, as I pointed out, the Taxpayers are going to be saddled with the debt.

In fact, we have yet to experience the unintentional consequences of the “Cash for Clunkers” program.  The program will provide a shortage of used cars and parts, thus driving up the cost of these vehicles.  You know, used cars, the very cars bought and driven by those who cannot afford new cars, but earn too much income to qualify for government assistance, the true middle class, and the actual people who will have to pay the bill in the end.

How many jobs will be lost due to the rising cost of used cars and the lack of parts?  Used car dealers will not be able to sell as many cars, thus they will maintain fewer salespeople.  Parts will be harder to come by, and consequently more expensive, thus causing closures and layoffs at small repair shops who thrive on keeping these cars running at the lowest possible cost.  In addition, how many of the people, assisted by the program, in purchasing new cars, will default on the loans, causing yet another hit on the still shaky financial industry?

No, folks.  It seems to me that Scary Barry and his Congressional Cronies have not thought this one through.  It seems there are too many negatives for the Taxpayers in this “Cash for Clunkers” deal.

Hey!  I got an idea!  How about, we tell Barack Obama Hood and his merry men in Congress to stop looking for ways give away and spend money that we do not have, in an effort to buy our votes?  Maybe instead, they can start looking for ways to begin paying down the national debt.

Mr. President, if you really want to give us something, give us a plan to restore our national financial security.  Give us a plan to secure our borders against invasions of all types, a plan to restore our nation and our military to the “superpower” status we have rightfully earned.  Give us a plan to reduce the size of the Federal Government, a plan to restore the value of our currency returning to a free market and capitalism.


“Yes, We Can!” Is this truly the “Hope and Change” you bargained for?

June 7, 2009

I must ask all those who supported Barack Obama during his candidacy for President, and went on to vote for him, electing him into the highest position in the entire free world.  Is this really what you bought into?

It has been six months since you elected, potentially, the most dangerous President of the United States in the last sixty plus years.  Yes, I said it; potentially the most dangerous.  We have experienced four and a half months of his regime… oops, scratch that… administration, and the question looms greater and darker every day.  Does this man truly represent the changes you believe this country needs?

Leading up to the election, six months ago, the slim majority of the voters were taken in by the mantra, “Hope and Change for America!  Yes, we can!”  This was the campaign slogan, then Senator Obama preached from his traveling pulpit.

Then came the first signs of the Audacity of Hope and Change when we, as a nation started receiving daily news briefings from the Office of the President Elect.  President-Elect Obama used this platform to criticize the outgoing administration.

Call me “old Fashioned”, but the last time I read the Constitution, it calls for a Congress, consisting of the House of Representatives and the Senate, and we have one executive elected to the office of President.  No matter how many times I look at it, the Constitution has not changed; there is no office of the President Elect.

Senator Obama became President, and one of the first things he did was to announce that he was determined in his intention of closing the prison in Guantanamo Bay, Cuba, by early next year.

This was an early indicator of short sightedness.  By announcing his intention, he placated his liberal base only to find that there was no place to put the detainees.  No other nation wants them; in some cases, this includes their native lands.  Not wanting to go back on his campaign promise to close Gitmo, the Obama Regime, I mean Administration, announced the intention to bring detainees to the United States to stand trial in a court of law.

Oops, there is a glitch in that plan.

Opponents argue that bringing the detainees here gives them access to constitutional protections.  This is an unprecedented action for the government, as extending rights to enemy combatants increases their ability to civilian defense practices and tactics, almost ensuring their release.  In case you are not familiar with military operations, the military does not specialize in collecting evidence in the middle of a war zone.

Therefore, bringing the detainees here to try them in U.S. Courts subjects them to evidentiary rules and constitutional law that would give some seedy ACLU attorney ammunition to obtain the release of the detainees.

There is also the creation of unacceptable risk to our national security, as defense tactics would be to demand information from the battlefield that could jeopardize our troops, and their tactics.  What if the one jeopardized was your son or daughter?

There is also the little issue of the Real ID Act of 2008, a law supported by then Senator Obama that bars entry into the country of any individuals involved in terrorist activities.

After his inauguration, President Obama pushed for the passage of his Stimulus Bill. He claimed that passing the bill was the only hope for our economy.

Wow!  That was a shot.  In less than one hundred days in office, he spent more than all the preceding presidents combined.

He must think you’re stupid!

When it comes to stupidity, truth is, the stimulus bill passed the House and Senate, and was signed into law, without ever being read.  I wonder if the legislators, or the President for that matter, would sign a contract without reading it.  If so, I have a limited number of ocean front condos for sale in Kansas.

Anyway, he must think your stupid.  You are supposed to believe that more excessive, wasteful spending by Congress, on short-term projects, is going to help solve the fiscal crisis facing the nation, and solve our long-term economical woes.  Let’s face it, the majority of the Stimulus Bill is Presidential and Congressional payoffs for votes, and we the taxpayers are left holding the bag.

Now, thanks to the President, General Motors (GM) has changed their name to Government Motors.  This sounds very funny until you begin to understand that government involvement as partial owner of the auto company puts them in bed with the Labor Union.

Oh, what’s that?  You had not realized the UAW is also a proud, new, partial owner of the failing GM.  That is an issue that requires further explanation, which I will attempt later.

Did I mention that President Obama is now declaring that Iran has a right to nuclear power, “so long as they can prove it is intended for peaceful purposes.”  Please correct me if I’m wrong, but I believe a large contingency of the insurgents in Iraq, killing our troops, originate from Iran.

Somebody pinch me.  This has got to be a bad dream.  I cannot believe the Commander in Chief is making nice with the folks that are actively trying to kill America’s finest.

I am trying hard to recall anything good that he has accomplished, but his ability to read speeches from a teleprompter do not count.  Think about it, we still have not received any details of his tax plan that was going to help middle class Americans that earn less than $250,000.00 per year.

So, for those of you that voted for Barack Obama, is this what you bargained for?  Did you really buy into the rhetoric of an individual that intends to sell our country down the river into socialism and irrelevancy?  Can you honestly agree with his apologetic speeches to the rest of the world, denouncing America’s exceptionalism?

Do you believe, as President Obama does, that the Constitution is a pesky nuisance, a compilation of negative rights?  Do you believe the Founders failed in implementing the Constitution, by not outlining the things the government should do for the people?  Or, do you hold true to the ideology, as I do, that the Constitution intentionally applies limits to the power and authority of government?

Is this truly, what you bargained for?