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And here’s a specific example of why the government should not engage in stimulus activities to influence the market. They screw it all up and cost taxpayers tons of money.
Take the Cash For Clunkers program. Car buyers got $4,500 from the government to purchase new cars. Essentially, you and I (those who didn’t buy new cars in the program) helped buy our neighbors new cars. (And quite frankly, I’m not interested in kicking in any money to help you buy a new car!)
What did this program add to our economy? NOTHING! Most who had the need and ability to buy new cars would have done so anyway. They may have postponed those purchases a little, but they would have made the purchases without government intervention.
Edmunds.com is reporting that of the 690,000 cars that were purchased under Cash For Clunkers, 565,000 of the buyers would have purchased a car anyway. So what did we accomplish? We got 125,000 people who wouldn’t have bought new cars to do so. (And I’ll suggest that many of those couldn’t afford to do so, and had no business making those purchases anyway!)
So our government spent $3 billion to spur the purchase of 125,000 cars. That’s a cost of $24,000 per car. Our government wasted $3 billion of our money in order to cause the sale of extra cars (above then normal demand) at a cost of $24,000 per sale. No one in their right mind can possibly suggest that this was a worthwhile way to spend tax dollars.
And our government doesn’t want you hearing about this obscene waste of taxpayer money. They’re going to do everything in their power to shut up those who would expose the frauds being perpetrated on the taxpayers. So now the United States Retribution Czar is maligning Edmunds.com for daring to clue in the taxpayers.
The bottom line is that our government should not be propping up certain companies and industries with our tax dollars. (Yes, I‘ve been against all bailout and stimulus-type activities from the very beginning of the financial meltdown!) It’s a waste of money which belongs to the hard working taxpayers who earned that money (and who have almost no say-so in the creation and administration of these programs).
Our government has never been efficient and effective in administering anything. And they should stay out of our economy and let the free market work for itself.