Sunday, January 24, 2010

Clunker math

Think of 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 claim 700,000 vehicles were purchased through the program so that's 224 million gallons saved per year. That equates to a bit over 5 million barrels of oil.

Five million barrels of oil at $70 per barrel costs about $350 million dollars.

So, the government paid $3 billion of our tax dollars (through Cash for Clunkers) to save $350 million.

We spent $8.57 for every dollar saved.

I'm pretty sure that the government will do a great job with health care though.

7 comments:

Scott W said...

There's a bunch of stuff that ain't working.

Kim A. said...

September is coming folks...whatever your political beliefs are, get out, get involved, vote, write, yell from your porch to strangers walking their dogs, whatever works. I am going to get more involved at our local level here in the big metropolis (pop. 2500). I need to be the change i want to see.

::stepping of podium now::

Namaste

Pam said...

singing to the choir over here brother Dave.

Syd said...

The car dealers got some short term benefits. One analysis published in Time stated that the purchase of cars and additional products, such as extended warranties, alarm systems and financing revenue for the dealerships — as well as roughly $875 million in sales-tax revenue for state governments raised the net impact of the program was easily north of $25 billion — if not much higher. However, the impact also has a short life expectancy. Once the program was over, the impact was pretty much over. And the impact for reduction in fossil fuel was not cost effective as you wrote.

Todd HellsKitchen said...

It was a publicity stunt to give people hope... It actually worked for a while...

Mary Christine said...

When I crossed the state line into Nebraska today I was astounded by the change in the quality of the roads. I bet they had less "cash for clunkers" per capita than Colorado. And other things too. God help us.

Findon said...

We've had this in the UK too. First result was that as the UK motor industry is now none existant for homegrown manufacturers all the profits went straight overseas, mainly japan and germany. Second thing. The scrapper had to be over 10 years old. So this car is owned by someone who has not contributed directly to the economy for at least 10 years. Meanwhile the guy that bought anew car every 3 years thereby helping the economy 3 times over, is denied the discount.