Cash for car-wrecks
A favorite cliché of coming-of-age movies is the irresponsible teenager taking the family car for a joyride without his parents’ permission. The climax is invariably a spectacular car-wreck, with the car totaled beyond repair. In such movies, the parents usually ground their children for the harm they have inflicted on the family by destroying its perfectly good car.
But if one believes the economics behind the government’s popular “Cash for Clunkers” program, these parents should be rewarding their children instead; it turns out that destroying cars “stimulates” the economy.
“Cash for Clunkers” just ended on Monday, as it finished gobbling up its $3 billion budget. But even though it is over, for now, its economics remain popular — witness the “cash for refrigerators” program discussed here — and thus those economics are important to expose. Read the rest of this entry »
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