On November 17th, New York Times economic reporter David Leonhardt posted an item titled “A Stimulus That Could Save Money” and opened:

The one highly visible success of the stimulus program has been the cash-for-clunkers program. It induced a boom in vehicle sales this summer that clearly would not have happened otherwise.

Considering the rest of Leonhardt’s article is about the cost benefit analysis of a proposed federal stimulus program for weatherizing homes, you’d hop he would take a paragraph to defend his claim that the cash for clunkers program was a success.

Leonhardt is correct that the program did stimulate car sales that otherwise would not have happened, but at what cost. Automotive sales analyst Edmunds.com crunched the numbers and found that while 690,000 vehicles were sold through the program, the vast majority of these sales would have happened anyway. According to their analysis, the program created only 125,000 sales that would not have happened otherwise. Dividing that 125,000 by the $3 billion cost of the program and we find that the federal government ended up paying $24,000 per vehicle.

And what about the supposed environmental benefit of cash for clunkers? According to data from teh federal governemnt the program should have been more accurately titled gas guzzlers for gas guzzlers. The SUV Ford Escape ened up being the most popular car bought with the federal subsidy and the single most common swap - which occurred more than 8,200 times - involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s.

Once you factor in the extra emissions it takes to create 125,000 new cars instead of using perfectly funditong existing ones, it is extremely probable that the program actually inicreased emissions.