Clifford Winston, a senior fellow in the Brookings Institution’s economic studies program, argues Cash for Clunkers was a “classic example of unintended consequences” and a mistake that should not be repeated.
New-vehicle sales from the program mostly were pulled ahead from transactions that eventually would have occurred even without the stimulus, and mostly by high-income earners, Winston added.
“It didn’t accomplish any of its intended goals. There was no increase in employment or output. There was very little effect on air quality,” he said. “Overall, it turned out just to be a windfall for certain … consumers who would have gotten cars anyway.”
LaHood believes Congress should develop a new program that offers rebates to consumers and auto dealers, using lessons learned from the Cash for Clunkers program.
“A rebate program would motivate people to get them into the showroom — either virtually or by appointment,” he explained. “This would jump-start the car industry in a very…
