>"Cash for Clunkers" – Why No "Buy American" Restriction?


The CARS program ended sales on the Monday night with nearly 700,000 clunkers taken off the roads, replaced by far more fuel efficient vehicles. Rebate applications worth $2.877 billion were submitted by the 8 p.m. deadline, under the $3 billion provided by Congress to run the program.

Car Allowance Rebate System

“Cash for Clunkers” is an U.S. government subsidized program wherein taxpayer money was given to those who traded in their “clunker” for a new vehicle. As reported, almost 3 billion of American tax dollars were spent on this program.

The Top Ten Cars sold during the program:

1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD.

source: Car Allowance Rebate System – PDF

Let’s ignore for a moment the fact that no where in the U.S. Constitution is the federal government given permission by the people to take money from some people and give it to others. The CARS program, like so many others, was implemented and Americans, at this time, have to deal with what is, not with should be. But if there was ever a time when there should have been a condition placed on such a government give-away of other people’s money, it should have been this CARS program.

With the US taxpayers now in what is essentially a partnership with GM and Chrysler, all of the “Cash for Clunkers” money should have been required to be used to buy American made cars exclusively. Instead, once again, American taxpayer money was used to benefit foreign companies and foreign workers, with much of that 3 billion dollars being sent outside of the US. Remember when taxpayer money used to bailout AIG was sent overseas to German and Swiss banks?

A Buy American requirement of this type – in light of the depression America is currently experiencing – would surely be understood by the foreign companies, Toyota, Honda, Nissan, et al, as a reasonable measure. That American taxpayer dollars was, during this time, going to be used to help American workers, American companies and America overall. America was going to come first.

Instead, what did we witness?

US Cash For Clunkers Scheme Helped Asian Car Groups

In the US lots more cars were sold, but America’s brief $US3 billion ‘Cash for Clunkers’ car scrappage scheme has failed its basic test: it didn’t produce an industry- wide improvement in sales, especially for the two US government restructured giants, General Motors and Chrysler.

Foreign producers like Toyota and Hyundai got significant boosts, as suspected from early figures, Ford was helped, but General Motors and Chrysler both saw lower than expected sales.

In fact the clunkers scheme pushed buyers towards more efficient, smaller cars produced by Asian car companies.

So Asian car groups grabbed an unprecedented 52.3% of all US car sales in August for the first time.

The fading Big three US groups, Ford, General Motors and Chrysler, saw their shares slide to a record low of 40.8%.


The lack of such a stipulation is, to me, more evidence that the US government is purposely destroying the American economy.


This entry was posted in buy American, cash for clunkers, economics. Bookmark the permalink.

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