Cash for Refrigerators

The stimulus program was such as success for the car makers

dealers have left the program as they have not been paid by the govt and are out lots of bucks

the program ends today

that another facet of the stimulus allows for cash for appliances. 

Whether that will rob future sales to the present remains to be seen. 

Sound off, is any of this stimulus working or should the govt cease and desist?

Comments

[Rani Lerma]

Oh Good Lord! Do these people not get the point. Rough timeline: Let's throw stimulous money at the people. For 2 years, no good. Okay, let's throw money at the banks, that'll fix it. Well that didn't help, let's throw money at the car industry. Oh no, that doesn't work. Let's throw more money at appliances. People don't need these incentives to buy. I'm an instinctive shopaholic. Of course if you give me money I'm gonna spend it. Who doesn't want "free money"? I think they feel if they can create a false positive, things will get better. What does it really help? This will only prolong the inevitable.

[Dennis Elam]

Rani

She brings up exactly the point that Dr. Deming makes, think long term. But congress and presidents do not do that, they poll for daily opinions, and then make what should be long term decisions based on short term opinion polls. But the polls actually show folks opposed to the stimulus, oh well.

And Rani is correct, such short term incentives merely rob future sales or condition people to expect 'deals.' Once the car industry got into zero percent financing, people balked at buying without it. Whoops, they are still paying for that.

[Austin Kroll]

Time and again, the cash for clunkers/refrigerators exhibits the fraudulent belief that Keynsian meddling in the economy works. Tragically, such efforts only work to extend the pain, as they increase the strain on the public via debt, all while robbing capital from those that still have it. See Japan and the Lost Decade for a prime example of this. Politicians, especially Keynsians, see the economy as a broken down diesle engine. Just put a new injector pump on and we're good to go. Austrian Capitalists, on the other hand see the economy as an ecosystem. One is not able to just "do this or do that" and get immediate results. Since the President and his Union buddies now own General Motors, what better way to prop-up sales than to print more fiat currency via IOUs/Debt Issuances and move some cars, right? Rani and Professor Elam have hit the nail on the head here by pointing out that we are not creating any new sales here, only speeding consumption that would have occurred anyway. As well, we are indeed boosting dependence on the Federal Government. Not quite what the founding fathers had in mind. As we've come to find out, Dealers are now in dire straits as they have yet to be paid for all these discounts, having to lean heavily on their floor-planning lines of credit, which is putting them on the edge of finanical ruin and insolvency. Seeing how the VA Hospitals and this program have been run, one has to question the sanity of anyone who wants the Federal Government to run their healthcare.

[Sandra Rutten Reyes]

I see the same thing the government is trying to fix a big problem with a band aide hoping its just going to go away. Like Radi mentioned who wouldn’t want to go and spend money that was given to them and they don’t have to pay it back. I know I would! But what I do know is that I definitely do not want to get in to more debt at time like this. What I really don’t understand is why did so many people take advantage of the cash for clunkers, didn’t they see the big picture. Now those people have a car payment something most of these people may not be use to having. I have a family member that did take advantage of this program and they are already in a struggling situation and don’t know how they are going to make the payment for next month. Some of these people should have stayed with their old car at least this way they would have transportation for sure, but some just didn‘t look at the long term circumstances. The same with this incentive to buy a new appliances that is suppose to save us energy so it should reduce our light or water bills. Right!! Well two years ago I bought the new washer and dryer suppose to water and energy savers, I really have never seen a big change in my bills. People are getting into more debt when they really can’t afford to get into a tighter situation with their household budget. People really don’t have money to be spending on luxury. I was listening to a radio show this morning they were talking about why people are going to the mall these days I thought it was interesting. People were calling in with the same answer. They are going because it is air-conditioned and they can window shop and people find it amusing. Most people say they buy a cup of coffee and sit and people watch. WHAT FREE ENTERTAINMENT!!!

[Dennis Elam]

I thought people were wandering the malls ten years ago. I asked that very question last time I was in the apple store at north star, yes there are people here but I do not see anyone buying anything.

Good post as we will be studying real estate investment trusts and what they own, malls, strip centers, office buildings. What to do with the empty real estate? Entire books are being written on what to do with empty malls. One here in SA made meeting center out of their empty space.

One student made the observation that he would prefer to be in the repossession business, surely it will be shall we say

picking up.