Was "Cash-for-Clunkers" a success? Well, think about it this way:
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year. So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.
They (the U.S. Gov't.) claim 700,000 vehicles, so that's 224 million gallons saved per year. This equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars. So, the government paid $3 billion of our tax dollars to save $350 million.
We spent $8.57 for every dollar we saved. Wow!
Makes you really confident about the future of health care, doesn't it?
Your calculation assumes that, after that one year of driving the new fuel efficient vehicle, the driver reverts back to their old clunker. In fact, the 5M in reduced barrels you are making fun of are residual; we are saving that many barrels of oil EACH YEAR, which is not insignificant when you consider the average car has a 9 year lifespan.
ReplyDeleteI didn't write the following post, but here is some more math for you: http://truecostblog.com/2011/11/02/was-cash-for-clunkers-a-success/