One year ago, the Obama administration started the Cash-for-Clunckers program. It caused a brief spike in car sales followed by a slump. Car sales were already rising and all the program did is that it got people who were already planning to buy a car to make their purchase a few months earlier. The result: car sales were artificially lowered for months after the program ended and taxpayers incurred $3 billions more debt. That works out to about $4,350 per car sold under the program.
The lesson: government subsidies cannot revive the economy. They just cause temporary distortions and speed up our path to Greek-style national bankruptcy.
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