Obama's 'Cash for Clunkers' was a flop

Over at The Washington Post's "Wonkblog," Brad Plumer concludes that the Obama administration's "cash for clunkers" program of 2009 was a flop.
Plumer notes that the program was designed to lend a hand to the ailing auto industry while taking old cars with low mpg and high pollution emissions off  the road.

But Plumer relies on two studies to produce a piece that certainly won't help with Obama's slipping legacy:
"As it turns out, the critics were on to something. A new analysis from the Brookings Institution's Ted Gayer and Emily Parker found that the program was fairly inefficient as economic stimulus and mostly pulled forward auto sales that would have happened anyway. It also cut greenhouse-gas emissions a bit — the equivalent of taking up to 5 million cars off the road for a year — but at a steep cost.

"Gayer and Parker find that Americans traded in nearly 700,000 old cars ("clunkers") through the program between July 1 and Aug. 24, 2009. Vehicle sales did rise during that period. But a detailed study suggests that consumers just bought some cars slightly earlier than they otherwise would have. Cumulative purchases over the year were basically unchanged.

"Other studies have reported similar numbers. A 2011 analysis from Resources for the Future compared U.S. car sales under the program with those in Canada (which didn't have a clunker program) during the same time frame. That study found that 45 percent of cash-for-clunker vouchers went to consumers who would have bought new cars anyway.
"... The program cost about $1.4 million per job created — far less effective than other conventional fiscal stimulus measures, such as cutting payroll taxes or boosting unemployment benefits. ... One recent study by economists Gerald Carlino and Robert Inman found that the 2009 Recovery Act could have been fully 30 percent more effective in boosting the economy if it had been better designed (i.e., more focused on things like aid to states and payroll tax cuts)."