Comments on: Hello Cash for Clunkers. Goodbye Inflation. http://www.walterbristow.com/2009/09/22/hello-cash-for-clunkers-goodbye-inflation/ ... and musings on the law, taxes, insurance, and a variety of other topics Thu, 02 Feb 2012 23:28:46 -0700 http://wordpress.org/?v= hourly 1 By: wilfredo http://www.walterbristow.com/2009/09/22/hello-cash-for-clunkers-goodbye-inflation/comment-page-1/#comment-2581 wilfredo Tue, 29 Sep 2009 00:21:49 +0000 http://www.walterbristow.com/?p=1655#comment-2581 The question is really if you add back the $4500 into the price of the car, would anyone have purchased them? For many of the Cash for Clunkers purchases, the answer is no. That is the reason we saw a large increase in demand. A car selling at $15k that sold for $10,500 would either not have been sold, or sold for an unknown price less than $15k. So why should we count $15k as the price? The great fear of inflation has so far not appeared despite arguments from the many that we will see it. For the most part, everything that you buy is cheaper this year than it was last year or the year before it, with only a few exceptions (some food for example). If you see a drop in the CPI it's not because the government is hiding it, it's because it doesn't exist at the moment. http://www.nytimes.com/2009/05/29/opinion/29krugman.html?_r=4 The question is really if you add back the $4500 into the price of the car, would anyone have purchased them? For many of the Cash for Clunkers purchases, the answer is no. That is the reason we saw a large increase in demand. A car selling at $15k that sold for $10,500 would either not have been sold, or sold for an unknown price less than $15k. So why should we count $15k as the price?

The great fear of inflation has so far not appeared despite arguments from the many that we will see it. For the most part, everything that you buy is cheaper this year than it was last year or the year before it, with only a few exceptions (some food for example). If you see a drop in the CPI it’s not because the government is hiding it, it’s because it doesn’t exist at the moment.

http://www.nytimes.com/2009/05/29/opinion/29krugman.html?_r=4

]]> By: Chad Clawson http://www.walterbristow.com/2009/09/22/hello-cash-for-clunkers-goodbye-inflation/comment-page-1/#comment-2434 Chad Clawson Fri, 25 Sep 2009 19:33:29 +0000 http://www.walterbristow.com/?p=1655#comment-2434 Walt, OF COURSE the part paid by the government should be included in the calculation of the true cost of an item. It's part of what the seller receives. While it is true that government incentives may drive up the price of an item since sellers and buyers alike may fell less a need to negotiate, that in an of itself shows the folly of government programs. When costs and risks are spread over large groups individuals do not act in the best interest of those groups, driving up the costs and inefficiencies for everyone. Personal responsibility and personal accountability drive effectiveness and efficiency. That is why so many social programs do not really work and cost much more than the same programs done at the individual or local level. Walt,
OF COURSE the part paid by the government should be included in the calculation of the true cost of an item. It’s part of what the seller receives. While it is true that government incentives may drive up the price of an item since sellers and buyers alike may fell less a need to negotiate, that in an of itself shows the folly of government programs. When costs and risks are spread over large groups individuals do not act in the best interest of those groups, driving up the costs and inefficiencies for everyone. Personal responsibility and personal accountability drive effectiveness and efficiency. That is why so many social programs do not really work and cost much more than the same programs done at the individual or local level.

]]>