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Obama's Cash for Clunkers Car Scam

Politics / Economic Stimulus Sep 09, 2009 - 09:40 AM GMT

By: LewRockwell


Best Financial Markets Analysis ArticleRichard Daughty writes: Roger Wiegand of Trader Tracks Newsletter finally says what I always figured: “Cash for Clunkers was a real clunker. One out of four auto buyers using this program is having buyer’s remorse as they just signed-up for so many new payments they cannot afford.”

Thanks, Roger! I always had a hard time believing in the unbelievable “Cash for Clunkers” program, where the government astonishingly gives up to $4,500 to people who buy a new car!

This is a subject which is very interesting to me because I happen to be a guy who owned a whole series of clunker cars and trucks over the years because I couldn’t justify the expense of a new vehicle/a good vehicle/a better vehicle/a vehicle that wasn’t rusted/a vehicle where parts and pieces didn’t fall off/a vehicle that usually started because they were completely paid for, thus costing me exactly nothing per month in principal and interest payments, and which needed only the legally-required minimum of liability insurance.

In short, the cost of driving those old cars and trucks was almost zilch, which fitted my budget perfectly, as I thought I would need the extra money for dating, but which turned out not to be the case. In fact, I found that women usually disdained both me and my cars, and they would say hurtful things like, “Hey! It stinks in here! Or is that you?” and, “At least clean out the old, moldy pizza boxes and chicken bones so I won’t be more disgusted than I am just sitting next to you!” and yammer yammer yammer.

That is, however, when I learned one of the Immortal Lessons Of The Mogambo (ILOTM), which is that as long as you had a good set of brakes on your ratty old car, a case of cheap oil in the trunk, a long siphon hose and a girlfriend who had a nice car in which to ride around, you could get along pretty good!

Not “getting along” as good as the federal government, however, which can (and did) just decide on a plan to sell a couple of trillions of dollars in new debt, whereupon the Federal Reserve will create the money, like when the Fed bought $30 billion of US government securities, directly increasing the money supply by the amount of the new debt! Now THAT’S what I call “getting along pretty good!” Hahaha!

Now, suddenly, sad sack people like me, whose incomes are so low that we have to drive rusted-out, beat-up old clunkers that cost almost nothing to own or operate, that nobody would steal, which were completely paid for, for which you only needed the minimum of liability insurance, would suddenly decide to buy a very expensive, shiny new car and begin paying upwards of $400-$500 a month for the new car and the big new premiums for the required higher insurance coverage? Hmmmm!

Perhaps this is why Bloomberg reports that “Consumer spending in the US rose in July as Americans jammed auto showrooms to take advantage of the ‘cash for clunkers’ program while avoiding other purchases”! Yikes! Avoiding other purchases! This is NOT the kind of thing from which economic recoveries are made!

And to suddenly start paying all of that money, every month for the next seven years or so, is not to even mention the effort of always having to wash and wax the new car, which is hard, disagreeable work that you don’t get paid for, which is like being punished for having a new car!

So, the only explanation that makes sense is that since people can stop paying on their house but still live in it because the bank doesn’t want to evict them, people will start living in their cars and stop paying on them, too! What are the car companies going to do? Evict a family onto the street by repossessing the snazzy new car in which they are living? Hahahaha!

I say this because I read in The Financial Times that in the UK, “The number of people of working age living in a household where none of the adults work rose by 500,000 to 4.8m for the period April to June,” which is a huge number of people which is now “close to one in five households,” which I assume is a rough estimate of what is happening in the USA.

Instead of laughing in my usual mocking style to indicate the bizarre absurdity of an economic system where the unemployed are given financial incentives to buy new cars, let me instead merely urge you to buy gold, silver and oil with your every waking moment and your every last dime, whichever comes first, which says the same thing but with the “secret bonus feature” of letting you make a Whole Lot Of Money (WLOM) when their prices rise, rise, rise, which is good because you are going to need a WLOM when inflation in consumer prices catches up with the inflation in the money supply that will accommodate the inflation in government spending, thanks to the loathsome Federal Reserve allowing and abetting the inflations by merely creating more money, which makes buying gold, silver and oil such an obvious choice that you say, “Whee! This investing stuff is easy!”

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2009 Daily Reckoning

© 2009 Copyright - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Joan Marks
29 Sep 09, 17:57
Obama is Heartbeat of America and not a scam.

Obama is not a scam, he is the Heartbeat of America.

m lillibridge
30 Sep 09, 10:23

R u joking? Obama is little more than a teapot despotic street hustler shucking and jiveing for a point of view that is so tired and distant from the true center to right of center of America. That only a hustler with a never-fade smile could have conned his way into the white house riding on the gullability and hopefulness of a populace that is quickly catching on to the monstrous con that has been perpetuated on them. If Obama is America then beam me up Scotty, I'll just wait this one out.

30 Sep 09, 22:29
Obama is the Heartbeat of America

Now that we have eliminated the Bush Scam the Heartbeat of America our beloved Obama is quickly changing the world. Get ready because rather than be a hater you are going to have to prepare yourself for a better world with or with out Shatner.

30 Sep 09, 22:44

m lillibridge "Shucking and jiving", "street hustler"???? Those words that you used to decribe obama speaks clearly why you dont like him in the first place...There is not ONE american politician in AMERICA that didnt do what obama did yo win votes. Did you just wake up to it because there is a BLACK MAN in the white house??? You should have beamed your self up to the spaceship EIGHT YEARS AGO!!!

04 Oct 09, 09:10
Heartbeat of America or Scam

If I don't get my health Insurance as promised this Heartbeat of America will be known as Scam in America.

05 Oct 09, 13:38
Obama is the Heartbeat of America

I think the jury is still out on Obama. He could be the Heartbeat of America but he will have to live up to his promises.I hope for our country's sake he is not another scam like Bush.

05 Oct 09, 16:56
car clunkers

Trade in your crappy car for another crappy one? I see scam all ove this one. I hope Obama can be the Heartbeatbeat of America.

05 Oct 09, 22:35
Obama is the Heartbeat of America


For All Americans, the Obama Health Care Plan:

* Won’t add a dime to the deficit and is paid for upfront.

* Requires additional cuts if savings are not realized.

* Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality.

Don't let others scam you this is the truth!!!

06 Oct 09, 10:31
Heartbeat of America or Scam

That's all fine and dandy if it happens. It's been a year now and I don't think all Americans are any closer to obtaining health care.

06 Oct 09, 20:22
Heartbeat of America or Scam

Obama has made progress educating the public of the truth not some scam that health care for everyone will destroy our country economically. Obama is the Heartbeat of America.

08 Oct 09, 10:43
Heartbeat of America or Scam

Obama is the Heartbeat of America a bunch of Bush lovers who helped drive this country into the ground are filling the internet with lies to scam Americans.

am after another
09 Oct 09, 02:54
Once sc

Obama also promised to end the wars and reform the financial system. There's still no end in sight in Iraq, it looks like even more troops are headed to Afghanistan, and the "too big to fail" have grown even bigger and are back to business as usual. Anyone who believes health care reform won't add to the deficit is living a pipe dream.

09 Oct 09, 10:45
Obama Heartbeat of America

Today Obama the Heartbeat of America will receive the Nobel Peace Prize for his good work.Don't let others scam you with lies.

12 Oct 09, 10:32
Heartbeat of America

Obama is the first President we have had in a long time that is not a scam. He is the Heartbeat of America.

13 Oct 09, 20:59

BAH HUMBUG HEARTBEAT OF AMERICA IS A SCAM!!!! What has Obama done lately

14 Oct 09, 16:20
Heartbeat of America Scam

This Heartbeat of America scam is not helping any one yet. Obama better get busy less than 3 years to go.

15 Oct 09, 17:49

The really fascinating thing in the comments here is the practiced lines of the paid shills. Obama is a puppet like Bush. He does nothing but utter soothing word scripted for him, and is rewarded with great wealth and prestige (like Nobel peace prizes), and in return he does his masters' bidding without question. So far his only achievement is to preside over the destruction of the US dollar, and mutter about health care that you as a nation can't afford anyway, and will never get because it is only a distraction debate. America is ruled by Wall Street/Zion and you all know it. Your democracy is dead in the water.

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