COMMENTS ON CASH FOR CLUNKERS

I received the following comments from one of our regular blog readers. I thought you might be interested in his thoughts.

"Larry, always enjoy your blog and the good business tips.

Was surprised at the piece on the clunker program. I do not think that entire math was carried out.

If 700,000 cars were sold and they were driven 12,000 miles per year, they save about 320 gallons of gas per year. Did this give the drivers additional funds to spend in the economy which could go on for several years? 560 million for the economy?

Did the sales of the 700,000 clunkers allow for auto parts suppliers to move inventory, perhaps pay down debt or invest in expansion? Did the sales of the 700,000 clunkers cause recall of unemployed workers, removing them from unemployment payments? Were auto taxes paid on the new autos? I assume that auto dealers were able to move some inventory, perhaps pay down debt.

On the down side, I think that 3 of the top sellers during the program were foreign cars. I do not know what the US content of those cars might be. Just some rambling thoughts."