Just a little update on the cash-for-clunkers program.
Transportation Secretary Ray LaHood said Sunday that unless the Senate approves $2 billion in additional funding, the Obama administration could be forced to halt as early as Tuesday the “cash for clunkers” program that has become one of the most visible and fast-acting of the government’s economic-stimulus programs.
The whole story HERE.
I have a generally positive view of this program. The sooner the inventories are exhausted, the sooner manufacturing will increase.
However, I’m not very sure about the impact it would have on unemployment. This is a one-time program and such in my opinion won’t necessarily merit rehiring of laid off employees. At best, it would fully utilize the existing capacity of plants. Plus, the carmakers have gone through successful bankruptcies. Fears of massive unemployment, to the extent of panic returning if carmakers file for Chapter 11, were not completely there. So any return to jobs I believe won’t be significant enough. It might end up being a bump in any positive GDP growth that will be reported.
Photo courtesy of WSJ