During the New Deal the Roosevelt administration came up with a bright idea as to how to keep agricultural prices high. Roosevelt, through his Agricultural Adjustment Act (AAA), proposed to pay farmers for decreasing their production. The thinking was that by decreasing the supply they would increase the prices for agricultural products. This however was deemed not sufficient enough. The Roosevelt administration went further in their price propping schemes and legislated the killing of six million pigs and the plowing under of ten million acres of cotton. At the time, Secretary of Agriculture Henry Wallace, described the wholesale destruction of crops and livestock as “a cleaning up of the wreckage from the old days of unbalanced production.”
Now in 2009 the Obama administration has come up with the bright idea as to how to prop up the auto industry. Obama, through his “Cash for Clunkers,” is paying the owners of older cars to destroy their automobiles. The thinking is that by decreasing the supply of bad cars that will increase both the productivity of the auto industry while at the same time saving on energy. The effect of this action will be to,
1.) Increase the price of used cars.
As older cars are destroyed the effect will be to shrink the supply of older cars. With the number of older cars diminished the effect will be that the older cars that remain on the market will increase in price since demand, remaining consistent, will find that it takes more dollars to purchase a older car since supply is constricted.
This is bad news for those young people who are looking to purchase their first car.
2.) Increase personal debt
People, who are pursuing the “Cash for Clunkers” program, are people, on the whole, who will go from owning their vehicles outright to people who have taken on debt in order to finance that new car they purchased.
3.) Increases public debt
The government is going into debt to the tune of billions of dollars it doesn’t have in order to fund this “cash for clunkers” program. The government doesn’t have any money that it does not first steal from its citizens. Funds to pay for “Cash for Clunkers” are funds stolen from the American taxpayer.
4.) Create an entitlement mentality
“Cash for Clunkers” is a middle class entitlement. These kinds of programs turn the middle class into a slave class as the expectation grows that entitlements are acceptable as long as they are entitlements that serve my wants and needs. With this program the government is not giving away money as much as it is buying slaves.
And none of what we have said so far begins to approach the problem of taking perfectly good used cars and destroying them. “Waste not, want not,” keeps pounding through my head.
Oh, and could anybody point to where the Federal government finds authority in the US Constitution for “Cash for Clunkers”?
I could toss our the general wellfare clause.=) snark. For those who dont know me I am being sarcastic.
I believe President Obama forgot to consider the environmental impact of disposing of old cars and building new one. Melting down steel and molding plastic is not cheap. Does this offset the few miles to the gallon we are gaining?
Related to #1, Cash for Clunkers also has the effect of hurting those of lower-income by destroying used cars they might have otherwise purchased.
Joshua,
Spot on!
Come on that’s a softball, slow pitch question. The answer is the commerce clause. It’s more elastic than Reid Richards. I’m not saying that’s the rationale Congress used, just that it would work.
While SCOTUS has narrowed the use of the CC somewhat in recent years, see United States v Lopez, 514 US 549 (1995), it has done so on narrow grounds.
Paul,
I should have written “legitimate authority.”
I mean they’ve used the commerce clause to forbid a man from growing his own crops to feed his own livestock. Obviously the Commerce clause is not a legitimate means of sanctioning any number of things that it sanctions.
I remember reading the livestock feed case in Constitutional Law and remarked at the time that should Congress so desire, using that rationale, they could regulate what I paid the babysitter.
It is fun and easy to blame SCOTUS for this mess. And it certainly is responsible for much of the nonsense surrounding the commerce clause. I think we agree on that. I think we would also agree that Congress, the original propounders of expanding powers shares culpability. Ultimately, the people, who could vote the scoundrels out have been negligent in their civic duties. A people whose god is their bellies, gets a government that starves their souls.
Oooooh … that is good!
I don’t hold SCOTUS uniquely to blame. I quite agree that we are all to blame.
If it’s good, I probably read it somewhere. As I tell my children, the difference between scholarship and plagiarism is a footnote.