CASH FOR CLUNKERS

[Chazzy]

Its gonna be the same ol song an dance, my friend. they dud get at least 40 miles per gallon out of any car..why dont  they have cafe stansards like the cars we send overseas..Monopoly...and well cheny , and all the politicians, wall street, big banks  and  big corporations are all in bed together.and a lot of them making billions off oil..speculaters....thot  that was gonna stop...maybe in 2020.....and Winston you are right !!! They wud not take any of the old big gas hogs

[Cap'n Preshoot]

Further reseach reveals that only about 2% of electricity is generated from oil.  I stand corrected that it is a major part of generation.  Thanks for correcting me.  I hate it when I'm wrong.

Yeah, me too.  However, I work in the natural gas industry for one of the major interstate pipeline companies, so I was pretty sure I was right.  I also believe that natural gas is poised to be the next major energy source, especially if we can figure out how to (safely) put it in our cars. They already have NG-powered vehicles, but the "gas station" and fuel tanks on the vehicle haven't yet come of age. I'm sure someone's working on it.

Nuclear (new-queue-ler in Bush-speak) energy also needs to be further exploited for electric generation, but ever since the Yucca Mountain storage project got scuttled, approving a new nuke station also means approving the site for nuclear waste storage and no one can agree on that.  The defense department will take the spent fuel rods as they can be reused for making enriched uranium and plutonium for the manufacture of nuclear weapons but since we're among the signers of the nuclear anti-proliferation treaty, stockpiling these old fuel rods would seem to fly in the face of that.  What to do, what to do. Oh woe is me.

[Winston]

And gee, I hate it when I have to be right all the time.    (I'm probably the only person on earth who actually reads junk that comes with the power bills ... usually right after I read the fine print on the back of credit card bills.)   

Official Energy Statistics from the US Govt. Energy Info. Admin. in "Electric Power Monthly, Sept. 2009 Edition":

Year-to-date, coal-fired plants contributed 45.0 percent of the Nation’s electric power. Nuclear plants contributed 20.8 percent, while 21.4 percent was generated at natural gas-fired plants. Of the 1.1 percent generated by petroleum-fired plants, petroleum liquids represented 0.8 percent, with the remainder from petroleum coke. Conventional hydroelectric power provided 7.6 percent of the total, while other renewables (biomass, geothermal, solar, and wind) and other miscellaneous energy sources generated the remaining 3.8 percent of electric power (Figure 2).

Consumption of Fuels: Consumption of coal for power generation in June 2009 was down by 11.8 percent compared to June 2008. For the same time period, consumption of petroleum liquids was down by 44.4 percent, and petroleum coke decreased by 12.5 percent. Consumption of natural gas decreased by 1.8 percent.

Pie chart, graphs, etc at http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

(Apparently what's generated from rubbing balloons on one's head and scooting across cheap synthetic carpets is counted in the Miscellaneous category. )

[Chazzy]

Note:    You may not want to show this to someone who fell for this scheme, but then again, maybe you should.   This program was like giving candy to 5th graders, they could care less that it will rot their teeth.    Do yourself a favor and read this "after" you take your blood pressure meds.   


 

 

 









 

Cash for Clunkers Math
 
Ignore all the fuel savings, etc and just look at how the car buyer got taken to the cleaners:
If you traded in a clunker worth $3500, you get $4500 off for an apparent "savings" of $1000.  That is, you could have gotten $3,500 if you had just traded the car in.  So you just really are $1,000 ahead at this point.   
However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you).  If you are in the 30% tax bracket, you will pay $1350 on that $4500. 
So, rather than save $1000, you actually pay an extra $350 to the feds.  In addition, you traded in a car that was most likely paid for.  Now you have 4 or 5 years of payments on a car that you did not need, that was costing you less to run than the payments that you will now be making.
But wait, it gets even better:  you also got ripped off by the dealer.  For example, every dealer here in LA was selling the Ford Focus with all the goodies including A/C, auto transmission, power windows, etc for $12,500 the month before the "cash for clunkers" program started. 
When "cash for clunkers" came along, they stopped discounting them  and instead sold them at the list price of $15,500.  So, you paid $3000 more than you would have the month before.  (Honda, Toyota , and Kia played the same list price game that Ford and Chevy did).
So lets do the final tally here:
You traded in a car worth:   $3500
You got a discount of:         $4500
                                       ---------
Net so far                           +$1000
But you have to pay:            $1350 in taxes on the $4500
                                       --------
Net so far:                          -$350
And you paid:                     $3000 more than the car was selling for the month before
                                             ----------   
Net                                      -$3350
We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan but lets just stop here.
So who actually made out on the deal?  The feds collected taxes on the car along with taxes on the $4500 they "gave" you.  The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies.  The manufacturers got to dump lots of cars they could not give away the month before.  And the poor consumer got saddled with even more debt that they cannot afford. 
The government's merry men convinced Joe consumer that he was getting $4500 in "free" money from the "government" when in fact Joe was giving away his $3500 car and paying an additional $3350 for the privilege

 

[stlcards]

Nit, everyone's situation is different. For axample...
What if your clunker was not worth the amount you qualified for from the government? Say it was worth $700, paid for and you qualified for $4500. According to your figures and the assumed tax bracket, you would be $2400 ahead before tax, title, license, etc. Your example is for one situation with presumptions that do not pertain to every transaction that took place.  What if someone pays cash for the car or had money down in addition to the trade-in? It does not take a member from mensa to figure out that if you do not have the funds to make such a large purchase that you will have to finance the transaction and there will be interest. Last time I bought a new car, I did not pay close to MSRP as price is negotiable for almost everything(except insurance  ).  I would say that there are probably some Faux News viewers who got taken by the dealers, but most people with common sense could complete a transaction with a little intelligence and foresight.

[Chazzy]

Dont shoot the messenger, STICARDS..I didnt happen to buy a new car. But if i was gonna ...i"d buy from ya...i just passed it on..so thanks for clearimg that up.