Every single time the gubmint does something like that the people who get the one-shot money either use it to buy something sooner rather than later or pay down their debts.

Americans are not stupid. We know that our taxes are going to go up under Obama. For one thing the Bush cuts, including the removal of the marriage penalty, will expire next year and everyone’s taxes, especially family taxes, will go up drastically. We also see inflation creeping up, without any compensating wage increases (unless you’re already at minimum wage or a union mandated multiple). Insurance takes a bigger bite every year. So do local and state taxes. Even fines are going up.

It seems that everybody but the government has a cash-flow crisis, and the government is just borrowing the money from us and our kids to pay back some time in the future. President BO’s economy stinks. It will keep on stinking because the fundamentals stink. And the bottom line is without tax cuts and spending cuts it will keep on stinking forever.

Democrats buy into Keynesian and Marxist economics because they got the chicken or egg question of Marxism wrong. Which came first, wages or profits? The first time a subsistence farmer produced extra food, was the extra food that he used to trade for something he wanted a wage, or a profit? It was a profit. All economic advancement and all wages come from profits. Yet Democrats and other Marxists don’t understand that. They have the most basic principle of things backwards, and that backwardness explains everything else they have backwards.

“A nation which can prefer disgrace to danger is prepared for a master, and deserves one.” –Alexander Hamilton

Study at Redstate University

Suppose you had a used car, worth $1000. You traded it in, and the dealer knocked off $4500 from the price of your new car. You “save” $3500.

But:

The dealer was using a wholly fictitious and inflated price, the MSRP (or so), as the starting point. In a tight market, they would have “given” you some amount between $1000 and $4500 for your clunker anyway. The only difference is that instead of reselling your old car on the open market, they destroy the car and wait on a government check.

And no one is able to buy the cheap used car they need in a sucky Democrat economy, because the government is fiddling with the market.

It takes a long, long time for a new car getting 33mpg to cost less than a used car getting 20mpg.

How long? If you drive 1000 miles/month, you would have been buying 50 gallons to fill the clunker, but only buy 30 gallons to fill the new car. That’s a savings of 20 gallons per month, or about $50/month at current prices. But suppose gas prices go to $5/gal. That’s $100/month. Let’s throw in an extra $100/month for the clunker’s repairs.

With a $300/mon car payment, that fuel-efficient car is going to cost you about $100/month, for 3 years, after which time it will surely be needing repairs of its own.

So the cash you get will take 6 short years to pay for itself.

Drive carefully!

The law of unintended consequences.

And our loser government doesn’t even believe it exists. They are so vain they believe they can successfully manipulate our activity, the economy and the environment with their ignorant laws. What fools.

Proper grammar saves lives.

Let’s eat Grandma.
Let’s eat, Grandma.

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Activists Taking Action: Unified Patriots

would anyone take on any liability with all the uncertainty in this Country? Our economy in Alaska is relatively untouched by the contrived Democrat recession, tourism and air cargo landings are off a bit, but nobody is buying anything much, even with cash – except precious metals.

Even for those of us who’ve accustomed ourselves to the world of cash flow as opposed to net worth, the knowledge that perhaps significant portions of your income are in danger of being confiscated will keep you from taking on any new expenses. My ten year old cars and the 2000 hr. engines in my boat will just have to hang in there for awhile.

May not exactly be a comparable analogy, but it does speak to the consumers mind. Grocery stores run sales that are designed to get shoppers into the store, not only to buy the deeply discounted items, but in hopes of them buying other items at regular prices. The stores take a “loss” on the sale items, but hopes to make it up by having you in the store–shopping.

The problem they run into, are shoppers like myself. People who survey the ads, go in and buy the great bargains and get out with minimum purchasing of the regular priced stuff. In other words, unless there had been those deep discounts, I probably would not have been in at all.

The Christmas season is an even better example. Retailers look for at least 25% of their yearly sales to occur in that period. Dollars spent in Nov/Dec are not going to be spent in the months following. Merchants take that into account.

The automobile industry is too large a big ticket item to absorb dramatic tinkering.

Ever-prescient Govt Motors times it just right

No, it was not made by the UAW.

Yes, the poor salesman was so happy to see a customer he almost wept with joy.

Yes, his manager almost kissed my feet.

I made a decent deal but didn’t beat them up. I felt sorry for them.

Dealer inventories appear shockingly low everywhere I went.

Yes, I paid cash. In times past, they would have tried every trick in the book to get me to finance. But I got no argument when I whipped out my checkbook. They were probably too concerned about paying the electric bill to worry about the back-end finance charges they weren’t going to get. My check cleared in record time, too.

A bird in the hand, etc. etc.

(As an aside, downtown Houston is nightly being raided by tire/wheel thieves — they leave all those new GMs with no wheel locks up on blocks while they roll all four tires away. This is happening in parking garages WITH security guards ,and the local news media isn’t reporting it.)

Tuesday made 19 years for SWMBO and I so we went to what passes for a fancy restaurant here. The guy who owns the Crrysler dealership was there with a party of three that I didn’t really know but who were clearly in the auto business. I’m not a real good customer because I tend to buy nice cars then keep them a long time, not what they like, but I’ve bought three top-of the-line cars from him over the last twenty years, so we know each other pretty well.

He hails me over and acts like its “old home week, ” introducing me to his party and carrying on about how much business we’ve done together. I told him I’d bought my last Chrysler. We went on about Obama Motors and such for awhile, but he’s as Republican as you can be in a town with a lot of Democrats, so he knew what I was saying.

As he was on the way out, he stops by the table and asks me to stop by. I said call me when you can sell me a new Lincoln.

also from Barclay’s:

While the entire car industry benefited from the boost in auto demand caused by the CARS program, the Japanese 3 captured an oversized share of the clunkers benefit, whereas the Domestic 3′s share was well below trend.

That’s not gonna help Govt Motors or the Fiat subsidiary get back on track for anything, which as I recall was part of the justification for the program under the stimulus bill. So it pretty much missed on all points.

Contrary to Barclays I expect the area under the curve for the July 1, 2009 to December 31, 2009 will be smaller than if there had been no program at all. That’s not going to be good in January 2010, and that’s assuming it takes that long for the problem to become recognized.