It didn’t take more than a few days of the ‘cash for clunkers’ program to illustrate a few things.
- When people have money in their hands, they will spend it. And consumers spending money is what drives the economy. In this case, it stimulated the auto industry.
- The program has already had its meltdown in red tape for car dealers, and has run out of money. And Democrats are looking for TWO BILLION more dollars from our grand children’s future to hand out.
- That the Obama administration believes that they have a right to choose the winners and losers in our economy, instead of the people. They do that by choosing who they want to bail out (with money that hasn’t been printed yet), and ‘everyone’ is not among those that they want to bail out.
- This cash for clunkers program could have been done BEFORE the administration fired auto executives, put their own people (who’ve never run a business) on the boards of directors, gave a majority ownership stake of the company to the United Auto Workers ahead of secured creditors, thereby nationalizing the auto industry.
- That this whole scheme was done more as payback to the UAW than it was to improve the auto industry’s bottom line.
Returning to the first point. Once you realize that the money you earn belongs to you and not the government to selectively dole out, what mechanism puts money in the economy without committing inter-generational theft? The answer is tax cuts.
An even better answer to cutting taxes would be to let the people (there’s that ‘everyone’ concept again) keep all the money they earn and finance the government with a consumption tax as proscribed by the Fair Tax.