As the Senate considers moving forward with the recently approved House increase of $2 Billion to the ‘Cash for Clunkers‘ program, they should keep in mind that this stopgap measure is in conflict with one of their main responsibilities this session: creating the framework for a green economy. Cash for Clunkers is being sold as a program that will ease economic distress for car-dealers (a fallacy as described by auto dealeres themselves), as well as advance toward the goal of creating a green economy (it is assumed by getting more polutting cars off the road).
There are two main problems with this. First, the US car industry has a really tough future ahead. Reports by International Energy Agency state that global production of oil will peak within the decade, while developing countries will continue to assume a greater percentage of demand. Increasing prices for oil will force people to drive less. Should we be spending $2 Billion more on prolonging the necessary contraction of the American car maker, or should we spend that money preparing for a future with drastically less oil?
Second, as gas prices rebound, those cars are so inefficient that they are going to be off the road soon anyway. Why pay to get them off the road now, when we know they will just die off as victims of economic natural selection?
We need to drastically reduce our greenhouse gas emissions, and that is not going to happen by trading in a car with 10 mpg for one that is 20. We need economic growth and job creation by being efficient with our federal tax dollars. That same $2 billion dollars could contribute to an expansion of transit, commuter rail, and high speed rail industries within the US. Other advanced nations are way ahead of us in this sector. In the same way that the government works with companies like Lockheed and Boeing to produce important parts of our air transportation infrastructure (and contributing big to our GDP), they can do the same with mass transit infrastructure. The Canadian-based aircraft maker Bombardier recently announced the the worlds biggest sale of 204 rail streetcars to the City of Toronto at a value of just under 1 trillion dollars. Those are Canadian tax dollars going to grow the economy by attacking a national problem at the local level. Sounds like a win-win to me.
Related posts: