A relative of mine who is a retired math professor just completed an analysis of the cost-benefits of the recent “Cash for Clunkers” program:
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average “clunker transaction” will reduce US gasoline consumption by 320 gallons per year.
The Government claims 700,000 vehicles will be affected – so that’s 224 million gallons / year.
That equates to a bit over 5 million barrels of oil (5 million barrels of oil is about ¼ of one day’s US consumption)
And…5 million barrels of oil costs about $350 million dollars at $75/bbl.
So, we all contributed to spending $3 billion …to save $350 million this year.
How good a deal was that folks…wonder if they use this math at the Post Office???
BUT…
they’ll probably do a great job with health care though!!
Jim
Yes so in 9 years the program will have paid for itself and we have provided an economic boost in the auto industry, and all those affiliated with it, when the economy needs it the most. Next time consult with a smarter relative.
Way to completely miss the point of the program.
It’s worse than that. You can trade in a “heavy truck” for another “heavy truck” and still get the maximum $4500 rebate with NO mileage improvement what-so-ever. Let’s face it, this is a handout to the American auto industry dinosaur that has been “greenwashed” to appease liberals who were already at the vanguard of making conciencious decisions to buy fuel efficient vehicles at a premium price.
It’s not the environment – it’s the economy, stupid. This is just an attempt (maybe successful) to help turn around the pesimistic consumer mood by encouraging some spending to preserve jobs to reduce the fear that causes the downward spiral of confidence. Yes, it’s a bit like helping a hangover with a shot of whiskey, but, man! what a hangover.
Hopefully we learn our lesson and don’t party so hardy next time…