Cash for Clunkers Hitting the Brakes?

Jason — Fri, 31 Jul 2009 12:57:05 +0000

Cash for Clunkers out of money

It appears the Cash for Clunkers program is hitting the brakes just after a few days. Reportedly, the program has run out of money because of so many people trading in their clunkers for cash.

Cash for Clunkers in the Wall Street Journal

White House officials and lawmakers were studying late Thursday how to keep alive the government’s cash-for-clunkers incentive program because of concerns the program’s $1 billion budget may have been exhausted after just one week.

Obama administration officials warned congressional leaders Thursday it planned to suspend the program at midnight. But the White House released a statement late Thursday saying that completed deals would be honored and the program is still under review.

A White House official said, “We are working tonight to assess the situation facing what is obviously an incredibly popular program. Auto dealers and consumers should have confidence that all valid [cash-for-clunker] transactions that have taken place to-date will be honored.”

But the program’s unexpected success also will put Congress and the Obama administration in a bind. With deficits soaring, lawmakers are increasingly reluctant to spend additional billions they don’t have.

On the other hand, they are sure to face a consumer and industry backlash if they end a popular program midstream, especially as dealerships across the country are in the middle of a huge advertising campaign to tout the program.

And here is what CNN Money is reporting about Cash for Clunkers…

This much seems certain about the Cash for Clunkers program: Consumers are happy to take government rebates to buy new cars.

The fate of the $1 billion trade-in program was up in the air over concerns that it may have already burned through its funds less than a week after it was officially launched.

It was unclear whether car buyers would be able Friday to trade in clunkers.

Congressional sources said early Thursday evening that the program would be put on hold. But Obama administration officials said later that Clunkers had not been suspended and that they were studying the situation.

“Auto dealers and consumers should have confidence that all valid … transactions that have taken place to date will be honored,” a White House official said in a statement.

An official at the Department of Transportation, which manages Cash for Clunkers, said the administration would try to work with Congress to find more funds to keep it going.

One of the program’s main champions in Congress, Sen. Debbie Stabenow, D-Mich., called on Congress to appropriate more money.

Stabenow said the effort has provided an important boost to the economy and resulted in 200,000 car sales.

“I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month,” Stabenow said.

What’s next and where will the money come from to keep this program going?

It doesn’t appear anyone is sure right now, but the pressure is definitely on the Obama administration to find a solution and quick. In the meantime, it seems dealers are no longer doing the deals out of fear the money will not be made available to them.

I wonder how much debt is associated with the 200,000 in car sales?

Hope for Those Paralyzed by the Recession

Jason — Thu, 30 Jul 2009 01:56:53 +0000

I received a letter from Dudley Hall today who is with an organization called Successful Christian Living Ministries (SCLM). I’m on the mailing list and often get their letters and CD’s. To be honest, I’m not quite sure how I got on the mailing list, but I’ve been on it for over a year. I used to visit breakfast meetings for a Dallas Real Estate Ministries (DREM) and I think there is an association between the two organizations. Long story short (probably not now) I really haven’t paid attention to the content until today.

Effects of the economic recession

I felt I needed to share an excerpt from Dudley’s letter because it provides such an awesome perspective on the current economic climate I hadn’t really thought about. Enjoy and please let me know what you think.

Recently I talked with a man who seemed absolutely paralyzed by the effects of the economic recession. He has lost his six-figure salary and much of his retirement fund. He seems suspended in mid-air as he waits for things to return to normal.

Things are not going to return to “normal.” Things can get better, but they will not go back to the same old way they were. There are some things God wants us to see that have been hidden in and complexity of prosperous times. He is insistent that we not settle for minor comfort when he has so much more he wants us to experience.

What is God saying about the recession?

I think everyone has been asking the question “when do you think the recession will end and all be normal again?” But many Christians, myself included, haven’t taken as much time as we should to stop and listen to what God is saying to us. And I think so many are for the first time learning what it really means to manage money wisely. The mission of financial counselors and personal finance bloggers has never been more important.

What are your thoughts on Dudley’s comment, “things are not going to return to normal?”

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