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Cash for Clunkers a Complete Failure; Has Distributed Only $145 Million out of $1.9 Billion

The Obama administration can't even run a rebate program but we're supposed to believe their claims that they can run our entire health care system more efficiently than whatever free market still exists in our current health care system? In your dreams, people.

The C4C program is so inefficient and torturous that only $145 million of the $1.9 billion has been paid out so far. It turns out the vast majority of the applications have been denied: Read it and weep (emphasis mine):

As of Thursday, the Transportation Department had repaid dealers just $145 million, or 7 percent of the $1.9 billion that they had requested, leaving many squeezed and prompting some to withdraw from the program early. The government is tripling the size of the work force assigned to handle the applications.

In many cases, the administration says incomplete forms or errors in the information submitted by dealers are slowing the process. Workers have reviewed about 40 percent of the applications filed, and many have been rejected and then returned to the dealer for possible resubmission.

Laura Sodano, a sales manager at Curry Chevrolet in Scarsdale, N.Y., said dealers were not told why their applications had not been approved and were having to review the entire form to determine what went wrong!

"I don't know one dealership that's gotten paid yet," Ms. Sodano said. "If they run out, we're in trouble. It's bringing us a lot of traffic, but it's not a very good program."

In other words, the government is playing the game of "Guess What Color I'm Thinking of Now." If you think working with your health insurance company is difficult, you haven't seen anything yet. Bloomberg explains why the program has been so disastrous (emphasis mine):

The administration of the C4C program has been cumbersome. Each clunker required dealer salespeople to complete 11 forms, the online computer system set up by Citi was slow and sometimes crashed, and extra workers had to be hired to process C4C claims. Only $145 million of $1.9 billion in claims have so far been refunded to dealers. Ironically, GM and Chrysler are using taxpayer bailout money to advance dealers the refund money they are waiting for from the US government! In the end, administration expenses might well reach 10 percent of total program costs.

The Federal government should not be in the business of initiating and administering short-term incentive programs designed to shape consumer purchase behavior. It has no experience in such initiatives and proved itself incapable of forecasting demand associated with different incentive levels.

This is along the lines of the argument I made couple weeks ago in an AIP article:

These Cash for Whatever programs are, at the most fundamental level, nothing more than the centralized planning of the US economy by the government. In contrast to free market economies where every independent decision made by millions of consumers is the engine that drives the economy, centrally planned economies are controlled and manipulated by the government. Rather than a market in which consumers take an active part in their own lives and decide where to spend their money when they think it best suits their needs, the government manipulates them by offering rebates at taxpayer expense on products it wants them to buy.


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» walls of the city linked with not-really-unintended consequences

Comments (22)

Even better are the rippl... (Below threshold)

Even better are the ripple effects of removing 250k cars from service--i.e.-the obvious one of scrapyards losing revenue derived from resale of drivetrain components, plus the orgs that perform routine maintenance on the cars, the people who supply the parts used, the people who transport said parts, the people who manufacture these items--the list goes on and on.

Unintended consequences CAN be a real bitch.

Not to mention the final indignity--YOU and I, dear people, are PAYING for this misbegotten shit.

" GM and Chrysler are using... (Below threshold)
Les Nessman:

" GM and Chrysler are using taxpayer bailout money to advance dealers the refund money they are waiting for from the US government! "

So is this an unfair business practice that screws Ford and the other auto companies?

But no, if we get the "public 'option'" govt healthcare, I'm sure they would NEVER, EVER use such unfair practices to run private insurance out of business. (snort).

This is the same Government... (Below threshold)

This is the same Government that wants to be in charge of our Health care. I think I'm better off without...at least until we have someone with the [email protected]@'s to take on a much needed Insurance Reform.

Hey folks! Don't forget, t... (Below threshold)

Hey folks! Don't forget, this "is the smartest, most intelligent administration, ever!" And if you don't like it, SHUT UP! Just remember, "I won".

Anyone want to make a small wager that auto sales WILL TANK in the next couple of months?

Well I wont be buying the w... (Below threshold)

Well I wont be buying the wons vehicles either way. Cant afford the savings it would cost Me.

Bail out #6 on the way for dopeys auto companys.

Can We please recall this unqualified buffoon already? 2012 is so far away.

Straight out of the Medicar... (Below threshold)

Straight out of the Medicare and Medicaid claims payment handbook.

Serving in the military you... (Below threshold)

Serving in the military you learn very quickly that if the Government makes a mistake and pays you too much money, they withhold the entire amount from your next paycheck or two. However if the Government owes you due to a mistake they take months to investigate before maybe getting you the money back...most likely in installments.

The health industry will cut off care out of necessity until bills get paid. Unless government completely takes over the hospitals to "ensure care levels are maintained". (quotes for stress, not an actual quote)

JustRuss:I once had ... (Below threshold)

I once had the misfortune of having the driver of a government vehicle (USMC) back into my legally parked car. It took 6 MONTHS to get reimbursement! First they had to determine that it was really a government vehicle. Let's see, it's painted GREEN and has USMC stenciled on the doors and GOVERNMENT license plates. Next they had to determine that I wasn't at fault with my DRIVING! Hmmmm....PARKED CAR....yeah. Then it was questioned if I was legally parked. Thank God I had a camera in the glove box and took 36 photos of the incident, including a picture of the driver of the government car....who oddly enough was wearing a USMC uniform.

So in Vancouver the hospita... (Below threshold)
jim m:

So in Vancouver the hospitals have canceled surgery for the rest of the year because they have run out of money.

Can't wait for Obama to start doing the same for health care as he has for the auto dealers.

I just hope I can wait for surgery when I need it.

jim m:Not bad, can s... (Below threshold)

jim m:
Not bad, can see it now:
"Cash for colons"
"Moolah for mammaries"
"Coin for colitis"
"Gelt for gastric disorders"
"Tips for tonsils"
"Bucks for breasts"

I heard the treasury was go... (Below threshold)

I heard the treasury was going to drop a $.50 coupon on Tidy Cat in next Sunday's paper.

Thats what happens when a s... (Below threshold)

Thats what happens when a supposedly "simple" program requires dealeships to fill out 2 dozen forms simply to get reimbursed $4500. I'm sure the dealeships will be reimbursed eventually, once the forms are sent back to be comepleted, you know, 10-12 weeks later. but its scary. It really is. These idiots want to run healthcare and they can;t even do this right. I can just imagine it: you're in a hospital waiitng for surgery, but they won't do it because the government hasn't reimbursed them for the initial exam yet. Wondeful

"Moolah for mammaries"<b... (Below threshold)

"Moolah for mammaries"
"Bucks for breasts"

Damn, Garandfan, how did you know about my regular Friday night excursions?

jim m:Don't forget... (Below threshold)
John S:

jim m:

Don't forget "Kidneys for Clunkers." Unless they decide you're the clunker. That means you should be put out of commission permanently.

"Thats what happens whe... (Below threshold)

"Thats what happens when a supposedly "simple" program requires dealeships to fill out 2 dozen forms simply to get reimbursed $4500."

Make that 136 pages the dealers had to wade thru just to complete one transaction.

Not to mention the BS about having their computers become official gubment property when they logged onto the system.

Yep, a very well managed pr... (Below threshold)
My wife and I are Obama sup... (Below threshold)

My wife and I are Obama supporters. But I
think we played this car deal wrong. We drove
into a Hyundai dealer in a 6-month old
Cadillac Escalade and drove out in a brand new
Elantra, but it cost US $4500! How does THAT
work? Anyhooo, my wife loves the new car,and
she looks great in it. God bless Obama and
the angels he flew in on.

Step up! Step up! Gather 'r... (Below threshold)

Step up! Step up! Gather 'round ladies and
gents! Obamacare is instituting a new health
directive...Angiogram Lotto! If you need this
procedure now, contact an ACORN representative
near you. He/she will show you how much each
ticket will cost you....and your odds of winning the BIG PRIZE.....a 4 vessel cardiac
study, free anestehsia, and a weekend with
Obama and Michelle, if you survive the exam.
Who said that government isn't there for YOU.

We have way too many demacr... (Below threshold)

We have way too many demacratic clunkers in WASHINGTON D.C. when soon cam we have them removed?

I missed something. I see t... (Below threshold)
Progressive ahole:

I missed something. I see that some of the forms were sent back for resubmission - because they were incomplete. Check that again they were sent back for resubmission that is not the same as being denied.

You would think that car dealers being the perfect Republicans that they are would know how to fill out a form. Apparently not.


progressive ahole - "I ... (Below threshold)

progressive ahole - "I missed something. I see that some of the forms were sent back for resubmission - because they were incomplete. Check that again they were sent back for resubmission that is not the same as being denied."

You may have missed something, but it was your moniker, "progressive ahole" fits just fine.

You DID miss the part about Curry Chevrolet in Scarsdale, N.Y who are waiting for an explanation why there application was turned down. If there are in fact errors how can a dealer correct them if the aholes running this program fail to inform them of the errors?

Of course the bigger issue is you implying all the dealers have made errors that have resulted in denial of delays in the program.

Unless you have proof of that you're nothing more than what you calls yourself - an ahole.

And BTW, dealers having to wade thru 136 pages of this nonsense bill to make a application wouldn't have anything to do with whatever amount of errors that occurred would it?

Nah, not to progressive aholes like you.

As noted, there are many ne... (Below threshold)

As noted, there are many negatives to the cash for clunkers programs. Those being its impact on the used car market, auto repair shops, auto parts stores, car donation charities and the poor. These could all have avoided if the politicians had listened and taken the advice of the car donation charities. Our advice was to give the c4c cars to charity. The cars that were really in bad shape would be junked. Those in good shape would be sold or given to the poor.






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