Cash for Clunkers Program Working?

Cash for Clunkers is a government stimulus plan enacted to help the struggling automotive industry in America. There are many different opinions on this program, but most agree that it is working in the short-term, at the very least. Some say it is a success, though others believe it will lead to long-term tragedy.

This program provides consumers with up to $4,500 when they give up their old “clunker” to be destroyed. They are then expected to purchase a new car with their monetary gains, thus stimulating the auto industry. This strategy appears to be working. Everyone likes free money and a new car. It should be stressed, however, that this is not a long-term solution to the United States’ economic woes, nor is it particularly intended to address anything but the issues of the auto industry.

Despite its narrow focus, it has ended up influencing the stock market in positive ways, some of which are quite unexpected. For example, platinum stocks are skyrocketing due to the fact that platinum is used in car manufacturing. Savvy investors can make quite a profit if they read the market right. Besides these side benefits, the Cash for Clunkers program has definitely helped boost car sales, at least in the short-term. The auto companies who did not experience higher sales rates reported that their losses were still significantly less than had been expected.

It may be too early to label the Cash for Clunkers program a success or a disaster, but it is still certain that profit can be made from it. Hopefully, its current benefits will lead to stock market boosts and eventually full success.