Thursday, October 29, 2009

Government's Idea of "Bang for Money"

is no bang at all, for taxpayers.

Take the cash for clunkers program. According to, the program which cost $3 billion generated 125,000 additional sales. That's $24,000 per car. (See my previous post.)

Ford Fusion, one of the popular "cash for clunkers" cars, could be had for that amount. There is no "bang" in here. The government might as well have bought cars from GM, Chrysler and Ford outright. Better yet, buy them on loans so that Goldman Sachs or Morgan Stanley can securitize the loans and sell the newly created securities to pension funds and university endowments as a very safe investment. If they becomes risky in any way, the Federal Reserve will step in and buy those securities to support the market. (Now that's a bang for the money.)

One of the unintended (and totally foreseeable by many, many people) consequences of this program is the higher used car prices, as totally good, operational cars and trucks are being scrapped instead of going into the used car market. Thank you, Car Salesman in Chief.

Or take the House 1990-page bill on health care "reform" which debuted with fanfare today. According to Congressional Budget Office (which by the way is not known for over-pessimism), the "reform" will cost $1.055 trillion dollars over the 10 years to insure additional 35 million people. That's over $30,000 per person.

In exchange, the government gets to have more bureaucracy they love, get to play in more committees and round tables and working groups, have access to everyone's bank accounts and personal information, set IRS for offenders, decide who gets treatment when and how, and collect taxes on medical devices that may include Q-tip and tampons, again (I'm yet to take a peek at this monstrosity of a bill). O what fun, what fun!

Ohhh, I get it. The government will have a bang, a great time, by sucking up the money from taxpayers who don't get to participate in the fun (or whose idea of fun is totally different from the government bureaucrats and legislators).


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