Thanks to the Obama administration’s new Car Allowance Rebate System (CARS), known as Cash-for-Clunkers, American taxpayers are now subsidizing car owners to do what they would have done eventually—scrap their old cars and buy new ones.

CARS is perversely profligate in numerous ways, among them the fact that car dealers must waste time filling out onerous paperwork to get reimbursed by the government and adding legal riders to contracts with car buyers regarding liability for rebates.  Mechanics must squander effort draining each car’s oil, then donning protective suits and carrying out a dangerous procedure involving pouring sodium silicate on the engines to make them “seize up” and cease to function.

This government-mandated engine genocide is a huge problem for auto parts sellers, who earn the bulk of their income reselling engines, motors, and transmissions—all of which must be intentionally damaged and made unsalable to comply with program rules.  Government inspectors will go around making sure engines have been properly desiccated, a precondition for dealers and car buyers to claim refunds.

More disturbingly, for those who can barely afford to buy a used car, the reduced supply of used engines will lead to increased, often prohibitive costs for used cars that, having been decommissioned by mechanics, cannot be resold to potential buyers.  That’s looking out for the little guy!

For those concerned about the “environmental impact” of the program, the plan unfortunately won’t help on that front, either.  According to the director of Columbia University’s Center for Climate Change Law, the energy required to produce a new car more than offsets any fuel savings from driving a used car for a few more years.  Without the program, car buyers would have ended up buying more fuel efficient vehicles anyway, because most vehicles are made to be more fuel efficient nowadays.  read more »