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A look at President Obamas American People Economic Behavior Modification Act of 2010
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Editor, Manteca Bulletin,

Larry Baca would like for you to believe that the Democratic Party, led by President Obama, have been successful in creating jobs and improving the economy through targeted tax cuts.

One he mentioned (“Did Turbo Tax forget about Cash for Clunkers”, Saturday, Jan. 30 letter) was the up to $4,500 cash for clunkers program.  Mr. Baca derides a previous writer to the editor as being “someone from the fringe”, just “parroting the Republican response” to Obama’s State of the Union address. Baca states that “somehow the writer came up with a $25,000 bill sent to every taxpayer for every new car sold under the Cash for Clunkers bill”. What Baca fails to inform readers is that this cost (actually $24,000 per car) comes from, a well respected car-buying research site.’s analysis found that “of more than 690,000 vehicles sold; only about 125,000 of the sales were entirely due to the government’s added inducement…the rest of the buyers just got lucky by getting the government to kick cash into deals that they would have proceeded with anyhow.”

In an analysis done by CNW Research, 1 in 5 clunkers program participants now regret buying a new vehicle. They found that “Among subprime credit borrowers, those who used the clunkers program had a 4.8% repo rate, more than double the 2.2% who bought similar vehicles but didn’t use the government incentives”. And that “faced with a new monthly payment of $250 to $350 per month, many of the (clunkers program) users admit they didn’t think past the new car smell”.

Charity groups that relied on discarded vehicles found themselves without donations. People with limited income, wanting to purchase a good used car, found that they had to pay more due to less supply (cash for clunkers cars turned in must be destroyed within six-months, even if they had many remaining years of good service). Even some environmental groups complained that the voucher should have been made available on the purchase of good used vehicles offering better fuel efficiency.  

 The President’s $1 billon Cash-for-Clunkers program was approved by the Senate on June 18, 2009. Democratic Congressional leaders attached the legislation to a $106 billion spending bill to fund troops in Iraq and Afghanistan, it passed on a 91 to 5 vote. Republican lawmakers sought to strip the measure from the bill but were unsuccessful. On August 6, 2009 the Senate approved an additional $2 billion on a vote of 60-37. The bill passed largely along party lines, with 51 Democrats, 2 independents and 7 Republicans voting for it.

 So Mr. Baca, let’s recap. The Cash for Clunkers program, whose idea was first floated in January 2009, turned out to be nothing more than another government program to be gamed by “car owner” players. It caused many potential buyers of new cars to postpone their purchase until July. It also caused many buyers planning to purchase a new car later in the year to buy sooner. And finally, it encouraged many buyers to take on more debt then they’ll be able in handle in an uncertain economy. Any time the government chooses winners (auto manufactures, car dealers and unions) over losers (low income car owners, charitable groups and taxpayers)] it takes on a role never envisioned by the founders of this great country of ours. Robbing Peter (300 million U.S. citizens) to pay Paul (a small group of 700,000 car buyers) may be the European way, but it is certainly not an American value. It’s a disgrace that elected leaders from both political parties voted for this “special interest” bill. When will politicians get the fact that American taxpayers expect and deserve a better, wiser use of our money sent to Washington?

Paul Banicki
Jan. 31, 2010