…by refusing to spend:
Most in media do not understand the reality of this deliberately reduced and postponed spending as a political resistance movement. But that’s what it is. I’ve talked to many affluent entrepreneurs and professionals who have worked hard for years to finally reach their present income levels. They are intentionally refusing to spend money as a means of protest.
I was recently thinking about replacing my Ford Explorer with a new SUV, at minimum a new Explorer, but perhaps a Lincoln Navigator or Cadillac Escalade. The day Obama first trumpeted the proposed 5.4 percent tax surcharge on gross income of us high-productivity, high-responsibility, high income earners I changed my mind. Instead I spent $514.00 getting a little fender ding months old fixed, paint scratches touched up and the car detailed. The $30,000.00 or $40,000.00 I would have spent on the new car – and I’m a cash buyer – can sleep idly in the bank until the man who has chosen me as his target is gone. And I view it as deliberately depriving him of spending he desperately needs to help his economy. He needs me and others like me buying a new car a whole lot more than I need one.
There are lots of ways to go Galt. Socialists underestimate the ability of the producers to thwart their theft. Of course, we know what Stalin’s solution was for that with respect to the kulaks. Fortunately, they haven’t gotten the guns yet.
I find economics confusing. If Americans had had a higher savings rate for the last decade, wouldn’t we be better off now?
If Americans had had a higher savings rate for the last decade, wouldn’t we be better off now?
Yes, but it doesn’t help quickly restore an economy in the midst of a recession, which is what the administration needs. It would, however, make for a much healthier recovery, if the goverment wasn’t doing so many other economically insane things.
Thus the wisdom behind the Cash for Clunkers. Yes, let’s take perfectly functioning, paid for vehicles off the road and replace them with slightly more efficient vehicles that are financed by both government debt and personal debt. Since debt was the ultimately cause of what got us into this mess, only more debt can get us out. My head hurts…
I’ve talked to many affluent entrepreneurs and professionals who have worked hard for years to finally reach their present income levels. They are intentionally refusing to spend money as a means of protest.
Fortunately, I’m in a position where I can opt out the work force for a while and that is exactly the decision I made. It lets me concentrate more on my children and I deny the government a very large slice any income I would have otherwise made. Voluntarily choosing to live within a smaller budget isn’t that bad of a trade-off where freedom and flexibility with time is a major benefit. However, if I was involuntarily put into this position through more burdensome taxes while working my butt off I would feel like a slave.
I regularly hang out at another blog where a bunch of other people are choosing to go Galt as well. It’s more partisan than I think Rand would like, but all are welcome to come and look around.
Vehicle replacement subsidies can make sense if they reduce fuel consumption enough. I recently replaced a higher consuming vehicle for a lower consuming one, with over 10% fuel savings. Gasoline direct injection for e.g. makes a big difference.
Vehicle replacement subsidies can make sense if they reduce fuel consumption enough.
If they “reduce consumption enough,” you don’t need subsidies. This isn’t just a subsidy to trade it in — it’s taxpayer money going to destroy wealth.
Another way to resist is to voluntarily lower your income so you pay less in taxes. Between us, my wife and I make a pretty good living. However, there has been a lot of layoffs at her work this year and it has added a lot of stress to her life. She’s on the home stretch to retirement anyway so I suggested that if it happens, she just go ahead and retire early. We’ll take an income hit but given that we were paying so much in taxes anyway, the actual reduction in net income isn’t all that bad. Less stress in her life means less stress in my life, and we can get by on my income just fine.
I have the Ur-clunker: my Dad’s old 87 Ford Aerostar with 40,000 miles on the clock, which Mom had called “The Moose” because of the cumbersome experience of driving it.
It had the transmission replaced at 20,000 miles when it had stranded my parents in Canada, it leaks radiator fluid, brake fluid, transmission fluid, and gasoline, I have the papers showing continuous registration in my name since ’02, I have my proof-of-insurance cards from the past year and a half. Were it not for the Clunker Program (CARS), I would have let the insurance and registration lapse to turn it into a “farm car.”
But guess what. I don’t know what I want to buy. Or rather, even with the 3500-4500 government subsidy, I don’t know what is on the market today that is worth spending money to replace it.
If they “reduce consumption enough,” you don’t need subsidies. This isn’t just a subsidy to trade it in — it’s taxpayer money going to destroy wealth.
People will often not look at a deal in the long term and will buy something that is cheaper in the short run. This is when subsidies like these make sense. I’ve read that the subsidized cars have on average 19% lower fuel consumption than the cars they have been replacing.
Is reducing our dependence on the middle east such a bad thing?
Oh FFS… Godzilla, I REALLY hope this is some sort of ironic pose you are striking.
If not, do you really believe that borrowing 3 gigabucks to move up to 750k auto sales from FY 1Q10 into 4Q09 is a good idea?
Even if we go from (say) a 16 mpg to a 19mpg average on those vehicles, and those vehicles average 5000 miles during that 3 month acceleration, then “we” save…
*drumroll*
49.3 gallons of gasoline (1.2 bbl volume) x 750k
= 37M gallons of gasoline (881k bbl of gasoline)
Total pump price saved, at $3 / gallon = $111 million (one time savings)
Debt service cost on $3B @ %4 = $120 million PER YEAR
Yah… great reduction in dependence upon ME oil.
Reducing our dependence on ME oil (which is far less than the dependence of Japan or Europe on ME oil) is a fine, fine thing to do.
Cash for Clunkers doesn’t do it. Domestic production of hydrocarbons (fossil or otherwise) would be a fine, fine way to start.
Tell yah what, Godzilla… pay me $4500, and I won’t drive my car AT ALL. That’ll save a lot more than a measly 50 gallons of gasoline, and that’ll help reduce our dependence on ME oil even more.
I spend about $2500 a year on fuel. If I could save 19% on my fuel bill that would be $500 a year.
How much is it worth putting into capital expenditure to save $500 a year? No more than $5000, that’s for sure.
I don’t see any new cars I’d want to own for $5000. The numbers simply don’t add up.
Paul Milenkovic, did you drop a zero from your Aerostar mileages? It really blew up the transmission in only 20,000 miles?
If you’re doing less than 2000 miles a year in it then there’s no way you can justify replacing it on economic grounds, assuming it keeps working.
No kidding, MG and don’t assume that 4% is static. Since we’re printing money like toilet paper who knows what inflation and a burgeoning national debt will do to the T-bill rate.
“Fortunately, they haven’t gotten the guns yet.”
And they’re going to have to work heavy OT to get them, if they work up the nerve to try.
I attended, and spent money at, a gun show in Raleigh this weekend. I’ve been to these before, but yesterday was very different. It was frenzied.
The majority of people exiting the show had purchased a gun, multiple guns, ammo or accessories. Very few people were leaving empty handed. There was not one table that wasn’t 2 or 3 people deep, to get to the guns and accessories. I saw numerous folks with ammo boxes of “assault rifle” ammo, one guy had 5, 1000 round, green ammo boxes on a small hand truck. He was much more the norm than the exception in that category. Most people were stocking up on ammunition and we heard several people saying it was a hedge against the Obamanoids taxing it out of reach.
There were plenty of high dollar collectables, match grade pistols and rifles and limited edition weapons of all types there. I didn’t see too many of those even getting a look. Many people were buying smaller frame concealed carry style pistols or shotguns or “assault rifles”. We kept hearing the words, “self protection”, or “home protection” from people walking around.
It was the mantra of the day.
There were several gun dealers offering CCH classes, most were showing signs saying slots in classes for this year were available only in NOV and DEC and a few were booking out into FEB and MAR 2010.
Like I said, I’ve wandered these things before, this was a very different feeling than I’ve ever felt before.
We saw a number of young, middle-class, minivan driving, grade schoolers in tow, kids in strollers families, looking at and buying weapons. It was NOT the usual Mossy Oak, deer hunting, git-er-done crowd I’ve typically seen at Central NC gun shows before
Best bumper sticker of the day
(and many were sold and stuck to vehicles we saw in the parking lot)
“When SECONDS COUNT, the POLICE are only MINUTES AWAY”
There’s a change in the political and attitudinal air, concerning guns and young, city dwelling families, when that sticker is on the back window of a Ford Aerostar, or Toyota Sienna, right above the magnetic soccer ball, and the “Jesus Fish”.
I think it’s hilarious that the main method the cash for junkers bill is being promoted today is as an economic stimulus act, even though it’s clear from the details that it’s really intended as a step to combat global warming.
Whether for anti-AGW or for economic stimulus, this bill is a colossal boondoggle. It is some awfully nice free money though for some people, mainly those buyers who get the money for trading in. I may cash in myself. The dealers benefit a little bit, but only in the short run. The nation as a whole is the big loser since billions of dollars worth of wealth are flushed down the toilet in the form of tax dollars spent and functional vehicles destroyed.
To the dumbocrats and obamidiots who inflicted this on the nation I say, “Thanks for the free money, suckers!”
I attended, and spent money at, a gun show in Raleigh this weekend. I’ve been to these before, but yesterday was very different. It was frenzied.
So what does this mean? Some guesses:
1) Democratic policies (the stimulus, health care reform, cap and trade) will trigger the collapse of law and order, and that guy will be glad he bought 5,000 rounds of ammo. The gun show buyers can feel this coming, and are taking appropriate precautions.
2) The Obama administration will succeed in passing health care reform and cap and trade, and will then move on to lesser priorities. Things will go so well for them in the midterm elections that they will find 60 Senate votes for bans or stiff taxes on handguns, shotguns, “assault weapons” and their ammo. The gun show buyers will look smart for having bought before the pre-prohibition run up in prices.
3) These people have been exposed to so much hysterical rhetoric (Obama is a Muslim terrorist, Obama isn’t American, “death panels”, etc.) that they’ve lost all touch with reality. They’re arming for a collapse that is less likely today than a year ago, and/or an overwhelming progressive Democratic majority that is hard to imagine looking at current polls. The fact that they are so gullible and/or racist does not say anything positive about them or their sources for political news and analysis.
“Paul Milenkovic, did you drop a zero from your Aerostar mileages? It really blew up the transmission in only 20,000 miles?”
No zero was dropped. Why do you think we have such low mileage on it? We are afraid to drive it anyplace. I think I put less than 50 miles on it in all of 2008.
I know all about anecdotal evidence, but trust me, Aerostars are not “good used cars.”
But William Clay “Billy” Ford Jr. was shilling for Cars for Clunkers months ago in Ford World Magazine, long before it was a gleam in Nancy Pelosi’s eye.
But what was Billy Ford trying to tell us? That the car you bought 10-20 years ago is just junk, even if it has hardly any miles on it, and that you need to replace it with the new junk coming off the assembly lines? What kind of marketing is it to relegate what people bought from you as being “clunkers”?