Thursday, July 30, 2009

Cash for Clunkers, or why I don't want government-run health care

This article about our federal government's new Cash for Clunkers car-rebate program highlights one of several reasons why I don't want a government-run or single-payer health care system: the dealers who are participating in the program- and giving buyers $4,500 in cash or rebates on new cars- have no idea whether or when some mid-level bureaucrat will approve the reimbursement of that amount:

Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was "astounded" to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.

"We had dealers representing 1,500 to 2,000 transactions," he said. "We asked how many had a deal approved yet, and not one hand went up." Lambert said the government has created a program that's "so big and cumbersome that it can't find a way to accept anything. We're sending in good, reliable deals."

It's nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

Moe Lane, of, notes "that the program started on July 1, they only published the actual rules Friday, and they’re still working out how to get the dealers their money."

Now, Cash for Clunkers is a temporary program that will run out by November 1 or whenever the government has given out a total of $1,000,000,000.00 in rebates, so it won't ultimately deter some aspiring, talented young car dealer for entering or staying in the car business. But a federally-controlled or single-payer health care system would presumably be permanent, and a half-ass, undependable payment system will drive potential, talented young doctors from the medical profession, at a time when several areas of the country are already experiences significant shortages in physicians.

On a separate note, Cash for Clunkers is billed as a "green program" that will help the environment. Can anyone explain to me how destroying functioning automobiles while encouraging the former owners of those cars to purchase newly-built vehicles helps the environment? It seems to me that the program actually promotes unnecessary waste since the car that are being destroyed would normally go into the used car or parts markets.

Update II- Cars for Clunkers: Well, this is not an encouraging development. The government just announced that it is suspending the program as of midnight tonight. Why? Well, there is a significant backlog in payments, and the government may have already exceeded the $1 billion allotted for this program:

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.
Update II- govt.-run health care: For those of you who think that the proposed "public plan" is simply meant to compete with private health insurers and is not designed to eventually become a government-run single payer plan, I offer you Representative Barney Frank (D-4th Dist. MA), Chairman of the House's Financial Services Committee:

Update III: Okay, Cash for Clunkers has now provided another reason for being against government-run health care: the federal government is not good at allocating resources or determining what market demand might be. The federal government is suspending this program, even though it was supposed to run through the end of October, because demand was much greater than anticipated and the program is already out of money: "The government suspended the explosively popular "cash for clunkers" program, fearing it would go broke before it could pay what it still owes dealers for a huge backlog of sales, according to congressional offices and a dealer group."

No comments:

Post a Comment