The Realist Idealist

Just above Ben Stein’s column in yesterday’s Sunday Times (telling us that things really aren’t that bad in our nation’s economy …Bueller? Bueller? …anyone?) was a piece by Alan Blinder with the title “A Modest Proposal: Eco Friendly Stimulus”

The gist of Blinder’s proposal can be boiled down to providing “cash” to low-income Americans for their “clunkers,” or in the slightly expanded version: getting CO2 spewing old cars off our roads, incentivizing the process for those driving the beaters, substantially reducing carbon emissions, stimulating our economy, and maybe even giving a boost to our badly ailing auto makers (who are about to announce a whole slew of additional lay offs).

Old cars on our roads pollute as much as 10-30 times more than newer cars with better emission controls. In fact, cars 13 years old and older account for only about 25 percent of the miles driven but as high as 75 percent of all auto-born pollution according to a study done in California. Beyond the CO2 released, old cars also tend to get (on average) ridiculously poor gas mileage in comparison with even slightly more modern counterparts (which on average are still WAY below what they should be, but that’s another post).

I don’t need to spell out the environmental benefits of pulling the clunkers off the road.

The best part - that you’ve almost certainly and very unfortunately never heard of - is that pilot programs are already underway. A national, federally supported plan would be able to take the best of what’s already going on and scale. Right now in California, for instance you can get as much as $1500 for your clunker; in Texas, as much as $3500. A national program could use pre-existing models for clunker cash and find a balanced (possibly geographically targeted?) rate to pay out above market value, and set top-end limits to the amount an individual can receive for their beater. (please note that up till now I’ve refrained from using “PoS”)

As a sizable number of old-car drivers also fall into low-income brackets (if not a majority), then a cash incentive for them and their families is likely to be spent immediately - and it’s quite likely that it would be spent on a down payment for a newer, more efficient car, thus boosting our flagging auto industry. If the individual trading a clunker for dough decides not to buy a new car with it - which is more environmentally ideal if they don’t, but less real - then that cash will flow back into our economy through other avenues, and do so at much lesser cost to the federal coffers than the recent $168Bn tax rebate.

Blinder lays out this argument in greater depth.

Whether seen as as an environmental boon or economic stimulus, this is a concept that makes and one that I hope will gain support in the coming weeks and months on the national level.

What are your thoughts? Do you drive an older car? If such a program existed, would you take advantage of it? Would others you know? Would you help spread the word to people who COULD take advantage of it if you can’t?