Majority of Americans Oppose Additional Funding for the Cash for Clunkers Program

8/6/2009, by Proloy Bhatta

HIGHLIGHTS

• 33% of adults think Congress should authorize additional funding to keep the Cash for Clunkers program going, 54% oppose.
• 73% of Republicans oppose the program, Democrats are closely divided over the question.
• Men favor continuation of the program more than women.

Although the Cash for Clunkers program is being purported as a success for the US economy, most Americans are not buying it. According to Rasmussen Reports, only 33% support additional funding for the program while 54% of Americans oppose it.

Peter Schiff, potential US Senate candidate and the president of Euro Pacific Capital, had this to say:

Can you think of anything more stupid than taking fully paid for cars that work and paying people to destroy them so that they can borrow more money to buy cars they can’t afford?

Schiff gets to the heart of the programs' flaws by using very strong language. It is not sound economics for the government to subsidize Americans to take on more debt at a time when there are job losses and a shrinking GDP. What will happen in six months when the bill comes due for these new cars?

The housing market crashed because borrowers could not afford their payments and the same fate could behold the car market. About 70% of our GDP is comprised of consumer spending but when consumer spending is boosted by more risky lending, I am not so sure we can call it a success.

Many Americans that had a fully paid for house are now without a home because they took on more debt that they could not afford by either upgrading or borrowing more money against the house. If Americans are encouraged to buy these new cars but are then unable to pay for them, would they not be at risk of losing the privilege of owning a car at all?