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The government of the United States of America has always been searching for various ways for greening up the economy. Ever since Al Gore began his crusade against the greenhouse effect, almost every American has become obsessed with the environmental issues. The result was the ever-growing number of legislative procedures and initiatives that were aiming at, for example, curbing down the carbon dioxide emission, increasing the percentage of the energy gained from renewable sources, or simply educating people about the dangers that the alleged global warming is going to bring. There was one, very interesting bill, that was not only to amend some of the environmental issues, but also stimulate the American car industry that has been on its last legs for quite a few years. The Car Allowance Rebate System, quickly dubbed 'cash for clunkers', started on July 1, 2009 and run for nearly two months. What was the aim of the program? The colloquial name that it was given explains it quite clearly. People who had an old and fuel-inefficient car (the criteria given by the Department of Transportation were very precise and strict) could trade it in to receive a financial incentives for a purchase of a vehicle, that required less gasoline to drive. Initially, the US Congress appropriated the sum of $1 billion, but that money pool has run dry much sooner than anticipated because of the great interest that the program attracted. Therefore, the government approved another $2 billion which lasted for only another month. The numbers clearly indicate that people were very quick to get cash for clunkers and grasp the opportunity of buying a newer car for only a fraction of money they would have to normally pay. In other words, the initiative was a great success when it comes to popularity. But was it effective in achieving its goals? According to the politicians, yes. They say it has greatly boosted the car sales in the US, which is true. People who were visiting car salons in order to find out whether their old car is eligible for a trade-in, were buying new ones even when the reply was negative. The number of sales was estimated to be around 240.000, an incredible amount taking into consideration that the program lasted for two months only. What happened to the cars that were traded-in? Mostly, they were scraped to ensure that the cars given the salvage title or the ones that were totaled were not smuggled back to the automotive market. Moreover, when it comes to the costs and profits, the program did not do very well. The $3 billion that was appropriated did not work for itself, as the reduction in oil consumption was not sufficient enough to cover the expenses. On the other hand, it was not a complete failure. The boosted sales ought to have created new jobs and caused an increase in salaries. What is more, if there were more cars sold, the factories had to produce new vehicles as a replacement which was beneficial for the barely breathing American automobile industry. It would be difficult to asses whether the CARS program was a blessing or a waste of money. The indisputable fact is that the people who took cash for clunkers probably wish it had lasted a bit longer.
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Cash for clunkers and the grass is becoming greener
