WASHINGTON (Nov. 7 2013) — The "Cash for Clunkers" program in the first year of the Obama administration was inefficient both as an economic stimulus and an environmental measure, according to a new analysis from the Brookings Institution.
Under the program, the federal government bought older, higher-pollution vehicles from owners in exchange for money to buy new cars. Some 700,000 vehicles were traded in between July 1 and Aug. 24, 2009, the study said.
However, consumers bought cars only slightly earlier than they would have without the "Cash for Clunkers" stimulus, according to the study's authors, Ted Gayer and Emily Parker. Furthermore, cumulative vehicle purchases during the year were unchanged, they said.
Vehicle sales from "Cash for Clunkers" boosted economic growth by $2 billion and created about 2,050 jobs, according to Mr. Gayer and Ms. Parker. But the program was less effective than other stimulus measures, costing about $1.4 million for every job created, they claimed.
"Cash for Clunkers" was equally ineffective compared with other environmental efforts, they said.
The U.S. vehicle fleet's overall efficiency improved, and carbon dioxide emissions were cut by between 8.58 million and 28.3 million tons. But even by the most optimistic measure, the carbon dioxide reduction under "Cash for Clunkers" cost taxpayers $91 per ton, according to Mr. Gayer and Ms. Parker. By the least optimistic measure, it cost $301 per ton, they said.
The Automotive Service Association (ASA) —which opposed the "Clash for Clunkers" program—publicized the study on its legislative website.