Chain Letter
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles – so that’s 224 million gallons/year.
That equates to a bit over 5 million barrels of oil.
5 million barrels of oil is about ¼ of one day’s US consumption.
And, 5 million barrels of oil costs about $375 million dollars at $75/bbl.
So, we all contributed to spending *$3 billion* to save $375 million.
It will take approx. 8 years to start paying off!!!
How good a deal was that ???
They’ll probably do a great job with health care though!!
Mike
What is amazing, and completely a consequence of the way television delivers biases, is that arguments throughout other mediums (email in this case) can be supported (and propagated!!) by small pieces of selected evidence.
Thankfully, our country does not function completely locked into these pigeon-holed situations. The country, used both as a amalgamation of it’s inhabitants as well as an economic variable, is extremely complex, and works on a multitude of layers.
Assuming that all the numbers are correct, we have some good things in there:
- We (I’m assuming you mean the government —-> taxpayers) spent $3 billion. (actually $2.8 billion)
- We saved $375 million in oil spending.
- We cut consumption by 5 million barrels of oil.
- 700,000 vehicles were sold. (690,000)
Naturally, for the sake of the argument, the facts stop there and the conclusion is made.
But though it’s true that in an accounting world where the only numbers important were the cost of the program vs. the amount saved in oil spending, than the program seems to be a complete failure. To the tune of around $2.6 billion dollars.
Fortunately, we have other statistics. Like the purchasing of 700,000 new cars equaling over $8 billion dollars in gross profit for the car industry. Regardless of if the cars would’ve been sold anyway (averages were around 140,000 cars per month in the months prior), or that many of the cars bought were foreign made, they were still sold in domestic dealerships. Both bringing money to local businesses and keeping those who might have been near losing a job, a little bit more secure.
We can’t be outrageous and think a $3 billion dollar program is going to save the economy and/or greatly change the environmental situation in this country, but at the rate we’ve been going spending $3 billion to incite an increase of $8 billion seems to not be that poor of a decision, and I’ll take any amount of reduced oil consumption that comes with it.
Chris.
