Cash for clunkers program performing precisely as expected.

The problem is that participating car dealers are currently on the hook for the trade-ins that they made in good faith, but have yet to see any of the deals signed off on by the National Highway Traffic Safety Administration. There are problems with the online system, you see.

Of course there are.  It’s a government program, remember?

[Minnesota Auto Dealers Association vice president Scott] Lambert said the government has created a program that’s “so big and cumbersome that it can’t find a way to accept anything. We’re sending in good, reliable deals.”

It’s nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

Note that the program started on July 1, they only published the actual rules Friday, and they’re still working out how to get the dealers their money. If you’re shrugging over that, consider this: what’s essentially happening here is that car dealerships are giving $4,500 interest-free, unguaranteed loans to the federal government… and the determination of whether or not those loans get paid off is more or less going to be at the discretion of mid-level bureaucrats at the NHTSA. Even if they do repay every loan, it’s apparently going to take time for the system to smooth out; it’s an open question whether it’ll straighten out before the official end of the program in November. And the car dealerships – the only producers of goods in this particular equation, and the ones that the government is ostensibly trying to help – get all the headaches.

I can’t improve on Glenn Reynold’s response to this: “Don’t worry, though — I’m sure they’ll do a better job with your prostate.” Says it all, really.

Moe Lane

Crossposted to Moe Lane.