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Government Stimulus in One Picture

March 23, 2010, 10:59 am

Looking at the chart below, attempt to convince yourself that the cash-for-clunkers program had any real effect on economic activity.

And consider what was NOT purchased by the previous holders of the billions of dollars the government took from them to give to car buyers.

Tags: ,
Category: Economics
  • Captain Obviousness

    The chart of existing home sales shows the demand-pulled-forward effect of gov stimulus even better:

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/madoff/Existing%20Home%20SAAR.jpg

  • caseyboy

    The government's need to do something, anything is noble, but they almost always do the wrong thing. Is the term "unintended consequences" ever a consideration for them? I am fighting the urge to join those who believe that the progressives are intentionally breaking the economy in an effort to drive us radically to the left. I still want to believe it is well intentioned ignorance.

    Does anyone out there understand concepts like the cost of capital, return on capital and the impact of tax rates? Most businesses perform return on capital analysis before funding new projects. New projects normally mean equipment purchases, business infrastructure expansion and manpower. A cut in tax rates, means that more investment projects will be approved since they will meet or exceed the investment objective. EVA or economic value added is a powerful driver for business (generating an after-tax return on capital greater than its cost). Follow the principles of John F Kennedy and Ronald Reagan, drop the tax rates and get out of the way.

  • Ron H.

    @caseboy,

    "I am fighting the urge to join those who believe that the progressives are intentionally breaking the economy in an effort to drive us radically to the left."

    I'm beyond that point, an am now a solid believer that it is intentional. I don't think there are many "unintended consequences" these days. See the following:

    http://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy

    And this:

    http://www.amazon.com/Rules-Radicals-Saul-Alinsky/dp/0679721134

    After following the link Coyote provided, I am having trouble reconciling the quote from Obama, and the chart and information below it. Could they both belong in the same article? Obama is such a smooth talking liar!

    Another negative the C4C program, is that even those buyers who took advantage of the program may not have benefited, as they paid sales tax on the full price of the vehicle including the amount of the rebate, then they paid income tax on the amount of the rebate, AND they may may have bargained as hard as normally would have they for a lower price on the new car. Many may have actually LOST money by using the C4C program.

    are there ANY winners here? Nope, I don't see any.

  • 2ravens

    In verbal form - "That which is seen and that which is not seen"...

    2ravens

  • Link

    One of the mysteries in Obama's back story is his time at Columbia. I'd actually be surprised if he wasn't studying under Cloward-Piven and their fellow travellers at Columbia.

    What's also never been reported is Obama's association with the "critical legal studies" professors at Harvard Law -- ten or so extreme radicals.

    What Obama's pursuing is right out of this playbook.

    We learned everything you could know about Sarah Plain inside a week, but no reporters have ever looked into this.

  • caseyboy

    Ron H. - Thanks for the links. My claim to be fighting the urge was a little tongue in cheek. I very much believe there is a grand strategy behind Obama's agenda. It is why he never really cared what was in the health care bill. He just needed a big program that would wreck the health care system so that he can implement his real objective, universal, single payer coverage run by the government. At the same time this bill also weakens the economy further. A weaker economy of course means we need more government control There are more power grabs coming, but first he needs to enfranchise a whole new group of voters. He needs to get an amnesty bill passed for our undocumented guests. You and I might know as illegal immigrants. The progressives are going to need their votes to make up for the independents and moderate democrats that are turning against the agenda.

  • Elliot

    Wish I had the source, see Coast to Coast radio show I think.

    There is a curent author who is of the same year as Obama at the same law school. Neither he nor anyone he knows, and he has looked them up since, ever remembers seeing Obama in a class or taking a test in the same law school in all the years he was there. There are, strangely enough, no records of his grades during this time. The best guess is that he worked at it minimally and took the tests when conveinient and got a gentleman's "C". But your right, the degree to which the so called journalists examined his past is chilling compared to the treatment all others have been getting.

    I'm afraid they really are trying to send us into the banana republic zone with the spending and promising.

    E

  • A_Nonny_Mouse

    Another Unintended Consequence (if you're feeling charitable; else very cruel to The Poor this administration is so eager --so it says-- to help) is that the cars traded in were scrapped, thereby eliminating a huge pool of inexpensive, resellable cars that would have been welcome to people unable to afford financing $15,000+ on a new car.