GOVERNMENT EFFICIENCY

"Just think, if the gov didn't step in with this program companies would have to drop their price to a point where consumers felt it was worth it to buy a car."

The Obama administration set aside a billion dollars recently to pay people to trade in their older, less fuel-efficient cars for newer, more economical ones that presumably pollute less. You can get up to $4500 on an old car on top of any trade-in value. The bill went into effect on July 1st, and there are ads on television already. This bill was passed under the Environmental clause of the constitution, which permits the US federal government to expend tax dollars taken from the American people in order to pay them back for cars. Oh, wait, no such clause exists, the bill is actually unconstitutional and thus illegal.

This program is being administered by the National Highway Traffic Safety Administration (NHTSA), and it works like this: rules released this last Friday (July 24th) give the dealerships the guidelines to what cars they can accept and get this trade in money to cover. The dealerships have to take the cost of these cars, then they apply to the NHTSA to get the deals approved they're running into two problems.

According to Susan Zeigler at the Minneapolis Star-Tribune, dealers are having trouble even logging on to the system - I called a local major dealership and the sales manager said he'd heard many dealerships were having this problem and that it apparently was a database error, but that had been cleared up.

The other problem is that many haven't had their deals approved yet:

Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was "astounded" to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.

"We had dealers representing 1,500 to 2,000 transactions," he said. "We asked how many had a deal approved yet, and not one hand went up."

Again the Salem sales manager said that as far as he knew they'd had their deals approved, but clearly there's problems elsewhere. I have a friend who's been in the car sales business for decades and I called him to check on how things were going and he said that although the rules hadn't been officially sent out until 23 days after the bill was signed, dealers knew in advance what they were.

Dealers love this: they're selling more cars now than they have for months, so much so that they're running out of inventory and figure the billion dollars will be used up soon. And that's not an unreasonable concern: assuming the deals qualify for the highest amount, that's just over 200,000 cars that can be sold before the money is gone. And in a sense, that's how Keynesian economics works; the government can, in the short term, appear to benefit the economy by stimulating this kind of brief jump in a sector. The problem is in the medium and long term things get worse, because the money is a net loss: taxing someone, taking money out for bureaucracy, then giving it back means you've taken more out of the system than you've put in, so overall the economy suffers. Stack on top of that gigantic federal debt and it gets even worse.

The biggest problem here is that this isn't even a particularly large government program. One billion dollars is a lot of money, but it's a drop in the ocean compared to the multi-trillion dollar national budget for the US government and its running with predictable government bureaucratic efficiency. Anyone who has had to deal with government at any level - the Department of Motor Vehicles for example - knows how smoothly, efficiently, and swiftly they run. These dealerships don't expect to see their reimbursement from the NHTSA for months despite laying out the cash for each car immediately in reduced cost to buyers.

This is the same US government that wants more and more of your liberty, more of your money, and to control more of your life. This is the same federal government that wants to have greater control over the health care of Americans. And exchanging the difficulty of making choices for the comfort of having someone else make them for you is not a net gain, especially when that "someone" is Uncle Sam's slogging, ponderous drones in the bureaucracy.

Just something to think about when you consider voting, or contacting your senator: do you really want them to have more power over you and your decisions? Who is it that keeps pushing for more power, more control, and more money to be spent? Remember when you vote.

*Tip of the hat to Instapundit for this bit