According to the bill Congress passed, the $2,000,000,000 in additional funds:
”shall be derived by transfer from the amount made available for “Department of Energy – Energy Programs – Title 17 – Innovative Technology Loan Guarantee Program” in title IV of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5)”.
Public Law 111-5, was passed February 17, 2009. In it, the Innovative Technology Loan Guarantee Program was appropriated $6,000,000,000. According to the Congressional Budget Office <PDF>, the $6B’s scheduled outlays were (in millions):
|| 2009: $60 || 2010: $1,200 || 2011: $1,500 || 2012: $1,500 || 2013: $1,200 || 2014: $540 ||
They were allocated $6B, over 6 years, with $60M scheduled in 2009 – TO BACK INNOVATION LOANS.
Now, they will “transfer” $2B. Technically the money is not there – it’s loan guarantees. Even if it did exsist, only $60M would be availible per the budget…
Additionally, Freakonomics points out, Congress originally set aside $1 billion to fund the program. If all of that money was going to pay these subsidies, there would be enough money to pay for 250,000.
Tags: cash for clunkers, Global Warming, Government Motors, taxation
The scheme makes no sense
Presumably it’s to save on oil:
Yet fuel efficient cars effectively means cheaper energy which in turn means they will be used more – instead of, for example, using public transport.
Fuel efficiency is of course an advantage people can consider when buying a car – and can compare with advantages that inefficient cars can have (speed or greater safety because of greater weight, etc, as well as a probably lower price – or they would be efficient already).
As far as governemrnt is concerned, any oil shortage – for geopolitical or economic demand reasons – raises the gasolene price and – guess what – increases demand for fuel-efficient cars anyway, no need to legislate for it.
A final reason is that – as research at Georgia Tech has shown – it is possible to clean emissions of CO2 (and other substances at the same time), and that therefore
a fuel neutral emission-tax or similar makes more sense:
If it is economical to make gas-guzzling cars with emission processing, then, again, there is no reason for government to prevent it.
Any regulatory measures should therefore focus on emissions, rather than the fuel used, and emission taxation retains consumer choice, while still giving government income with the lower sales of such cars.
(Regardless of whether CO2 reduction makes any sense, lowered emissions of course have their own benefit, for all the noxious sulphur etc substances that the emissions also contain)
http://www.ceolas.net/#cc25x