The Cash for Clunkers program appears to be a rousing success by government standards. The billion dollars was supposed to last a few months and the money is already gone. Of course, the Feds are trying to waste another $2 billion by extending the program.

Why is this clunker program considered such a success? Real simple. People love a good deal, especially when it is "free". The government is good at taking money from one group and giving it to another. Everyone knows when this stimulus ends, the car showrooms will be empty again because car buyers are programmed to wait for the next deal.

How often have the car companies lured people into showrooms with zero % financing, factory rebates etc. on a "limited time offer" basis?  People come into the showrooms, shop around, sometimes buy, but in many cases leave because they know there is no rush because there is always another deal around the corner.

What this program has proved is two things:

1. If you offer everyone "free money" with strings attached some will take advantage of the offer.

2. If people have extra money to spend, they will spend it. That sounds like a good old-fashioned tax cut that everyone could enjoy.




After this program ends, the crickets will return to the car showrooms until the next boondoggle is tried.