Cash for Clunkers a Complete Failure; Has Distributed Only $145 Million out of $1.9 Billion

The Obama administration can’t even run a rebate program but we’re supposed to believe their claims that they can run our entire health care system more efficiently than whatever free market still exists in our current health care system? In your dreams, people.

The C4C program is so inefficient and torturous that only $145 million of the $1.9 billion has been paid out so far. It turns out the vast majority of the applications have been denied: Read it and weep (emphasis mine):

As of Thursday, the Transportation Department had repaid dealers just $145 million, or 7 percent of the $1.9 billion that they had requested, leaving many squeezed and prompting some to withdraw from the program early. The government is tripling the size of the work force assigned to handle the applications.

In many cases, the administration says incomplete forms or errors in the information submitted by dealers are slowing the process. Workers have reviewed about 40 percent of the applications filed, and many have been rejected and then returned to the dealer for possible resubmission.

Laura Sodano, a sales manager at Curry Chevrolet in Scarsdale, N.Y., said dealers were not told why their applications had not been approved and were having to review the entire form to determine what went wrong!

“I don’t know one dealership that’s gotten paid yet,” Ms. Sodano said. “If they run out, we’re in trouble. It’s bringing us a lot of traffic, but it’s not a very good program.”

In other words, the government is playing the game of “Guess What Color I’m Thinking of Now.” If you think working with your health insurance company is difficult, you haven’t seen anything yet. Bloomberg explains why the program has been so disastrous (emphasis mine):

The administration of the C4C program has been cumbersome. Each clunker required dealer salespeople to complete 11 forms, the online computer system set up by Citi was slow and sometimes crashed, and extra workers had to be hired to process C4C claims. Only $145 million of $1.9 billion in claims have so far been refunded to dealers. Ironically, GM and Chrysler are using taxpayer bailout money to advance dealers the refund money they are waiting for from the US government! In the end, administration expenses might well reach 10 percent of total program costs.

The Federal government should not be in the business of initiating and administering short-term incentive programs designed to shape consumer purchase behavior. It has no experience in such initiatives and proved itself incapable of forecasting demand associated with different incentive levels.

This is along the lines of the argument I made couple weeks ago in an AIP article:

These Cash for Whatever programs are, at the most fundamental level, nothing more than the centralized planning of the US economy by the government. In contrast to free market economies where every independent decision made by millions of consumers is the engine that drives the economy, centrally planned economies are controlled and manipulated by the government. Rather than a market in which consumers take an active part in their own lives and decide where to spend their money when they think it best suits their needs, the government manipulates them by offering rebates at taxpayer expense on products it wants them to buy.

White House Admits It Hired Firm to Spam Americans on Health Care
Barack Obama Finally Admits: Ten Year Deficits Explode to $9 Trillion