The Affect of Cash For Clunkers

It's been almost a month now since the government program 'Cash For Clunkers' ended. So how have the Auto Giants GM and Chrysler faired from it? The monthly reports came out the other day and GM is down 42%. Chrysler is down 45% and Ford who did not take a government bailout is only down 5%. Car sales in September were down 25%

So in all the program did, nothing. All it did was speed up a few sales, and give the government another thing to screw up. Many people didn't get their rebate when they were told they would and some didn't get a rebate. And people still think government can manage money. Ha.

So while GM may have gotten some more sales, it did little in long term affect as they are now down 43%. And that is the problem with stimulus programs. It looks great at the short term, but then in the long run your down almost 50%. Had this come at any other time and been managed by GM it would've been great. They would've had tons of new sales and revenue. but instead it created a mad rush at the beginning, and soon enough the government got behind on payments (big surprise) and now GM is losing sales and profit.

Another argument could be made that since the rebates were for only $4,500 that GM lost money in sales. But that's besides the point. It was good program, at the wrong time and as a result of short term stimulus, it has put GM right back where they started.