Quiz for Clunkheads

by Russ Roberts on August 3, 2009

in Other People's Money, Stimulus

Imagine you’re a member of Congress. You’re a fan of the Cash for Clunkers program. You discover that the $1 billion that Congress budgeted for the program has been spent in FOUR DAYS. The program is now out of money. What do you do?

A. Realize that $4500 per clunker was too big a subsidy and that you can achieve the same effects with a much smaller amount.

B. Worry that maybe there is some fraud in the program and that some of the cash isn’t going to clunkers

C. Increase the budget by $2 billion

The correct answer for clunkheads is C, of course. That’s the wise choice when you are spending other people’s money. What fun that must be!

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