Gillard says the scheme will cost $394 million over four years and take 200,000 clunkers off the road in that period.
Industry Minister Kim Carr and his department have already concluded that a scheme such as this would cost about $1 billion to implement. He told the online auto magazine GoAuto on March 25 last year: "The difficulty is that it is extremely expensive and there are finite resources for government."
"Cash for clunkers" will blow out to the $1bn price tag because Gillard has underestimated the value that has to be put on the vehicles to be scrapped.
Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best "the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day's gasoline use." Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.Now we learn of a new US "cash for clunkers' policy. From ibtimes: (Link)
Over the past 20 years, the U.S. has become dependent on a steady supply of $10 million RD-180 rocket engines manufactured by NPO Energomash, the 85-year-old manufacturer largely owned by the Russian government. These engines are used to deliver military satellites into orbit.
The U.S. uses between seven and 10 of these engines every year, according to comments made last week in remarks to Gen. William Shelton, head of Air Force Space Command that oversees Pentagon space missions. He told senators the U.S. currently has 15 engines in stock, or enough to last between 18 and 25 months at the current pace of missions.These rockets are at least 15 years old having been developed between 1994 and 1999.
John Ransom for Town Hall Daily writes:
At present, the United States is buying rocket engines from Russia for these critical national security launches . That is right. Even while a domestic supply of launch vehicles is available here at home, there are some who think it is a good idea for us to be dependent on the Russian government for our access to space.
I always knew that Obama didn’t care about American jobs, or American security, but I’m curious that he does seem to care so very much about Russian jobs and Russian security.