Autos

The extraordinary success of the Cash for Clunkers program--$1 billion worth of credits dispensed in about a week--is an outstanding validation of the power of green stimulus that we at NDN began championing at the beginning of last year.  Not only is the cash for clunkers program a win for the environment--about 250,000 clunkers will come off the road, replaced by the same number of fuel efficient cars, the program has provided a shot in the arm to the beleaguered auto industry and also put $1 billion of stimulus out onto the street when we need it.  You might call it a win, win, win: a victory for the environment, auto manufacturing and the broader economy.

The program is so successful that Congress should dramatically extend it.  As a thought exercise imagine what would have happened had Congress enacted a $10 billion program at the beginning of the year that might have sold 2.5 million cars--about the number that the auto industry would have needed over the last six months to be profitable.  It might have put the auto companies into the black and possibly avoided the GM and Chrysler bankrtupcies and billions in taxpayer support. 

While it's too late to turn back the clock, it's not too late to extend the program--perhaps quadrupling it to $4 billion as Congressman Ed Markey has suggested, with the goal of replacing a million jalopies.  An extra $3 billion is worth it, in my view, to improve fuel efficiency, to protect the taxpayer's investments in GM and Chrysler and as quick stimulus now.