Dave Ramsey has a rare and great ability to make complex things simple. We need more like him. I think I heard him change, or at least solidify, Neil Cavuto’s thinking on the Cash for Clunkers program.
Neil seemed okay with the program and thought the fact that it ripped through $1 billion quickly was a sign that the economy might be turning. Dave had a different take. I’m paraphrasing what Dave said.
First, it’s a bad program because the government’s involved. The government shouldn’t be taking from us to give to people buying cars. Just give the money back to the people by reducing our taxes and letting us decide what to do with it.
Second, the government shouldn’t encourage people driving clunkers to buy cars they can’t afford. Didn’t we just go through this mess with homes? These people are driving clunkers for a reason. They can’t afford new cars. I drove a $200 clunker for years, then saved up and bought a $1,000 clunker, then a $2,000 clunker. It wouldn’t have been a good idea for me to go from my $200 clunker to a $17,000 car.
Perhaps we haven’t learned our lesson yet, or maybe we learned the wrong lesson. We should be encouraging responsible financial behavior rather than irresponsible behavior, for what? Cars?