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CASH-FOR-CLUNKERS

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I received recently an e-mail with the following content:

A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.

A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.

So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.

They claim 700,000 vehicles so that’s 224 million gallons saved per year.

That equates to a bit over 5 million barrels of oil.

5 million barrels is about 5 hours worth of US consumption.

More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars.

So, the government paid $3 billion of our tax dollars to save $350 million.

We spent $8.57 for every dollar saved.
I’m pretty sure they will do a great job with health care, though.


EMails and publications like this show again how narrow-minded and ignorant some people are.

The “Cash-for-Clunker” program was never put into place in order to save on oil and gas, but rather to give the American people an incentive to buy a new car. This in return helped the US automotive industry, saved work places and kept the industry going.

Without this program, tens of thousands of additional jobs would have been lost.

Not only automotive companies would have failed but hundreds of underlying companies that manufacture and supply the automotive industry as well as  support these car manufacturers and its suppliers  would have gone out of business.

This in return that would have meant even more unemployment benefits to be paid. Workers and staff that would have been laid off would have had no money to spend, which then would have led to and even bigger economical disaster.

Saving on oil and gas by having more fuel-efficient cars just is an added on bonus.

I encourage everybody to see the whole, bigger picture and not just what it seems like at first sight or what some bad-mouthes would like you to see.


Oliver Schmid

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About Oliver Schmid

Experienced IT executive with over 20 years of global experience and demonstrated success in driving IT value, business and IT, reducing overall costs, and quickly executing and delivering business solutions. Member of the International Association of Outsourcing Professionals (IAOP)

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