Cash for Your Clunker

With all the federal bailouts of the financial and automotive industries, were you beginning to think that the government was avoiding bailing you out of your past mistakes? Well, Congress may have good news coming for you soon.

Our politicians are considering crediting people who own gas-guzzling SUVs with $4,500 to take them off the road. The bill proposes providing consumers a voucher on a sliding credit scale based on a vehicle's age (pre-1998 vehicle owners would only receive $2,000, for example). People could also turn in their clunkers and receive vouchers to ride public transit.

The bill would only allow the recipient to purchase a fuel-efficient replacement. This program would help immediately replace old and inefficient cars with more eco-friendly ones and give a boost to automobile industry sales as the industry is in the midst of its own bailout.

While the program would cost up to $2 billion per year for the next four years, experts predict that we would save up to 80,000 barrels of motor fuel by the end of the four years. All of this seems good on the surface, but a part of me wonders if we are bailing out consumers who could afford to ditch their clunkers in the first place. It is doubtful that lower-income Americans will be able to afford to switch cars any time soon, even with a $4,500 credit.

Are we rewarding bad behavior with this bailout of people who bought a Cadillac Escalade for their weekend travel to the house in the Hamptons? What do you think? Learn more here.

Source: MSNBC