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Debate: Cash for Clunkers program

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*'''The program helps in the short term only.''' While the sales of new cars is spurred by the program in the short term, they will arguably drop the more once it has ended, since many of the people who buy the car because of the program were arguably planning to do so anyway, were only artificially spurred to do so immediately. *'''The program helps in the short term only.''' While the sales of new cars is spurred by the program in the short term, they will arguably drop the more once it has ended, since many of the people who buy the car because of the program were arguably planning to do so anyway, were only artificially spurred to do so immediately.
-*'''The program is aimed selectively at the automakers.''' The Cash for Clunkers program focus only on one specific sector of the economy - the automotive industry. Other producers, e.g. electronic appliances makers (not to mention the service sector) do not receive any subsidy of this kind.+*'''The program is aimed selectively at the automakers.''' The Cash for Clunkers program focus only on one specific sector of the economy - the automotive industry. Other producers, e.g. electronic appliances makers (not to mention the service sector) do not receive any subsidy of this kind. The artificially increased demand in the automotive sector shrinks the demand in other sectors; money that are spent on buying a new car will not go directly to other parts of the economy.
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Revision as of 18:23, 6 September 2009

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  • The program helps in the short term only. While the sales of new cars is spurred by the program in the short term, they will arguably drop the more once it has ended, since many of the people who buy the car because of the program were arguably planning to do so anyway, were only artificially spurred to do so immediately.
  • The program is aimed selectively at the automakers. The Cash for Clunkers program focus only on one specific sector of the economy - the automotive industry. Other producers, e.g. electronic appliances makers (not to mention the service sector) do not receive any subsidy of this kind. The artificially increased demand in the automotive sector shrinks the demand in other sectors; money that are spent on buying a new car will not go directly to other parts of the economy.



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