You know that 3.5% GDP rise last quarter that briefly spiked the stock market back over 10,000, that turned out NOT to be a real rise and tanked the stock market a day later?
Well, turns out there’s even MORE to that story.
A lot of that spike was attributed to the vaunted “Cash-For-Clunkers” program and according to the automotive Web site Edmunds.com, while some 690,000 new vehicles were purchased under the Cash for Clunkers program last summer, Edmonds.com claims that only 125,000 of those were vehicles that would not have been sold anyway, according to their analysis released last Wednesday (10-28-2009).
There’s no denying that auto sales contributed heavily to the economy's expansion in the third quarter, as they added a robust nearly 2 percentage points (1.7) to the nation's gross domestic product growth.
The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $2 billion, later expanded to $3 billion was allotted for those rebates.
The average rebate was appx. $4,000. But at least according to Edmonds.com the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009.
OH BOY! I can’t wait for all this NEW prosperity to start kicking in!
WTF am I saying?!!!
What I really mean is “Holy SHI...I mean HOLLL-D ONTO YOU WALLET! This fake prosperity is gonna wind up kicking us hard in the hip pocket big time!”
Well, pucker up buttercup.
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