The Cash for Clunkers program is a waste of money- literally. It’s rare that "environmentally friendly" programs actually waste money, but when it come to the Obama administration’s policies, down (in terms of the overall U.S. economy) must be the new up (at least for certain car manufacturers).

You might be thinking that the Cash for Clunkers program, or C4C, is a good thing. After all, it puts new cars into the hands of folks who may not have had the means with which to buy them. Also, we take fuel inefficient vehicles off the road. And let’s not forget just how well this program will stimulate the economy.

Bah.

Here’s the real deal: the C4C program does take fuel inefficient cars off the road. However, the program also requires that the motors of those "clunkers" be completely destroyed. The process is gruesome to watch: a mixture of water, sand, and silica is poured into the engine (after the oil has been completely drained), which causes the crankshaft and bearings to completely seize after several thousand RPM have been applied. Once the motor has seized, it is no longer salvageable for its parts. The car also becomes incapable of being resold.

What’s wrong with destroying perfectly functional engines? Because, in short, those are the engines (and attached vehicles) that could’ve been donated to a needy person, to your kid, or even repaired and overhauled. The engine parts could’ve been used in the repair of other cars. Instead, those engines will now be rendered unusable just so more cars can be made and sold. And it’s not as though car manufacturing creates no pollution. New metals must be smelted, new plastics molded, and new fabrics synthesized. Because many vehicles are imported from China, Korea, or Japan, freight liner fuel must also be burned.

But what if you are spending a small fortune every month just to maintain your current clunker? Well, here are three words for you: buy used cars. People are always selling good used cars for at least 50% off of what it cost to buy them brand new. I myself have a Honda that was bought used, and even 5 years later, it still drives better than many of my friends’ "new" cars. Furthermore, why should you let car dealers get yet another bailout from the average Joe or Jane? Let the average Joe/Jane prosper for a change, by buying his/her used car.

More than that, think about the local economy that you support with your current car. There are the used car businesses for starters, assuming you bought your current car used. Then there are the auto parts stores like AutoZone and Napa Auto Parts. Your car mechanic down the street also is helped when you show up needing a new spark plug or timing belt. The C4C program will hurt small business repair shops and mechanics the most.

What about the economic stimulus argument? OK, I’ll give you that: for the next 1-2 years, the economy will see a rise because of the sudden financial windfall on the part of the car manufacturers. And then, that rise will deflate, and deflate fast. Why? Because once every Joe or Jane has purchased a new car, new cars will not be needed for the next 4-5 years. Which means we’ll be right back to where we started (and maybe even worse, if car dealers do not receive C4C rebates) following this fake politically-motivated economic stimulation.

And don’t forget that, anytime material is actually destroyed to stimulate an economy, the cost of stimulation has to come from somewhere. After all, there certainly is no real profit to the government to support such a program. In this case, our automotive "stimulus" plan will result in a still greater national debt. Speaking of which, have you seen our current national debt?    

In summary, when it comes to C4C, I’ll take my 9+ year old Honda and drive it home. The Almost Millionaire blog also makes a good argument for keeping your current clunker.

Incidentally, here is a YouTube video showing a heart-wrenching destruction/execution of a perfectly good 1995 Oldsmobile Aurora: