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Pro-con on 'cash for clunkers'

"Cash for clunkers" was so successful that a program that was meant to take until November achieved its goals in a week or two. Thousands of cars were sold, helping dealerships and car companies to move toward recovery. Thousands of gas-guzzlers were scrapped, helping the country move toward improved energy efficiency. Just as it starts to become clear that the government has a winner on its hands, we start to see reports in the conservative media that call the program a failure. The lesson they all teach is this failure shows what will happen if we pass health care reform. Draw your own lessons. Was a program that wildly overachieved its goals, stimulated the economy, improved the country's fuel efficiency and brought a great price for a new car to tens of thousands of Americans a success or not? I say it was, and I say it shows why we want a public option choice in the health care reform. — Dave Johnson, Huffington Post

What the clunker policy really proves is that Americans aren't stupid and will let some other taxpayer buy them a free lunch if given the chance. It's hardly surprising that Peter is willing to use a donation from his neighbor Paul, midwifed by Uncle Sugar, to class up his driveway. On the other hand, this is crackpot economics. The subsidy won't add to net national wealth, since it merely transfers money to one taxpayer's pocket from someone else's, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years. Since money is no object, let's give everyone a $4,500 voucher for other consumer goods. As long as everyone thinks we can conjure wealth out of $4,500 giveaways, let's go all the way. — Wall Street Journal editorial