Aided by a huge infusion of taxpayer money, August was a great month for car sales. However, the ballyhooed Cash for Clunkers program, which offered car buyers thousands of dollars to replace their aging vehicles, was a poorly administered and difficult-to-assess attempt to jump-start the economy.
On the up side the program was designed to spur car sales and it certainly did that. About 700,000 new cars were sold in the program providing a tremendous shot in the arm for dealerships in that struggling industry. Administration officials hope the boost for car dealers will spill over to the dealers' supporting businesses and that the increased showroom traffic and pent-up demand will continue to spur sales in 2010.
Other industry observers fear the much-hyped program provided only a temporary spike in auto sales and the numbers will decline next year. They correctly point out the new cars were subsidized by U.S. taxpayers, whether they took part in the program or not. The skeptics also wonder why automotive dealers were singled out for this taxpayer largess. Why not the companies that sell boats or expensive golf clubs?
And we hope that the next time the government strategically targets aid toward a particular industry that they have the funds ready to go. Excessive paper work and lagging government reimbursement funds left many of the auto dealerships in a bind during the Clash for Clunkers program.
We may never know whether the program helped or hindered what we hope will be a speedy recovery of the U.S. economy, but we certainly hope the government's other efforts are administered more efficiently.
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