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Gillard offers cash for clunkers

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posted on Jul, 23 2010 @ 11:04 PM
So Australia is going down the same road as the US..
How did "cash for clunkers" work for you over there??

I dont see how a measily $2000 is going to help buy a car that costs
$20-$50K. And the dealers will just up the price so they are the winners...

Also a side effect may be to push up the price of older cars and make it hard for those struggling to even afford a car at all !!

Lets hear how you Americans feel about this program since its been running there for a while.

The prime minister has announced a "cash for clunkers" program that will see a re-elected Labor government pay $2000 to anyone who trades in a car built before 1995 for a newer, more fuel-efficient vehicle.

[edit on 23-7-2010 by virgom129]

posted on Jul, 24 2010 @ 02:44 PM
The intent was to stimulate American manufacturing, however there were trade issues that forced the program to remove 'made in America' rules. The rules still included metrics on size and fuel consumption which favored foreign manufacturers. In the end taxpayer money was spent on imports, which was a negative impact on GDP.

From what I recall, every $50,000 spent on the program resulted in $4,000 of payoff. The credit shrank with your qualifications, so those who had the most incentive were the least qualified and least likely to fulfill their loan obligations. This also pulled sales forwards from the following quarter, so the effect was to reduce inventory but not sustain a smooth production line.

In summary we shipped taxpayer money overseas, and in return shrank next quarter US manufacturing and GDP.

It was a well intentioned idea implemented poorly, it backfired on the US and the negative impact was buried by politicians, lobbyists, and the MSM by their influence.

[edit on 24-7-2010 by Dbriefed]

posted on Jul, 24 2010 @ 03:36 PM
reply to post by Dbriefed

I guess we need to wait and see the details of Gillard's plan.

Maybe she will learn by the US mistakes,,


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