IOUs for suckers

by Russ Roberts on August 19, 2009

in Intervention, Subsidies

Turns out it isn’t Cash for Clunkers. It’s IOUs for suckers. (HT: Drudge). The AP reports:

Hundreds of auto dealers in the New York area have withdrawn from the government’s Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

How is the program going? Slowly. Very slowly.

“(The government) needs to move the system forward and they need to start paying these dealers,” said Mark Schienberg, the group’s president. “This is a cash-dependent business.”

The program offers up to $4,500 to shoppers who trade in vehicles getting 18 mpg or less for a more fuel-efficient car or truck. Dealers pay the rebates out of pocket, then must wait to be reimbursed by the government. But administrative snags and heavy paperwork have created a backlog of unpaid claims.

Schienberg said the group’s dealers have been repaid for only about 2 percent of the clunkers deals they’ve made so far.

TWO PERCENT. Very impressive. Ah, the efficiencies of government. Health care reform joke goes here.

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{ 7 comments }

Anonymous August 19, 2009 at 7:41 pm

Russ,

I work for the FAA (part of the DOT). Just this morning I received an email asking for FAA employees to volunteer their time to help the DOT process dealer claims for the cash for clunkers program. I wished I saved the email because it described the ‘rigorous’ review process each volunteer needed to perform on each claim.

louh August 19, 2009 at 11:45 pm

We are talking about 250,000 claims or about 1/2 the amount of trades a Merrill Lynch or even a Knight Sec. will process daily. And of the 1/2 million trades a Merrill processes 99.999% will be done without delay or error. Has the Government mentioned how they are going to administer 1 million health claims daily. I am certain that these transactions will be handled by union workers, representing all minorities, all covered by union contracts. Good Luck, Anyone buying in ?

erp617 August 20, 2009 at 11:41 am

More important than the dealers not getting paid is what happened to the three bil?

Alexei August 20, 2009 at 2:33 pm

Here, here. How is it they burned through that $1 billion and needed 2 more for the program, but they haven’t paid anyone yet?

I know I shouldn’t be surprised, but WTF???

Yet Another Methinks August 21, 2009 at 1:59 pm


shouldn’t be surprised, but WTF???

Best summary
!

Anonymous August 20, 2009 at 2:08 pm

All those new cars on the street because of the cash for clunkers program, are at this point owned in majority by the government.

If the government doesn’t pay, will that increase employment within the repossession and towing community?

See there, stimulus works.

Anonymous August 21, 2009 at 1:40 am

Before you know it, the government will be offering cash for medical care. It can stiff 98% of the providers….

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