Cash for Clunkers cost to the taxpayer? $24,000 per car

[Pearls]

Clunk.

Taxpayers' real cost of cash for clunkers: $24,000 a car, Edmonds.com analysis says - Drive On: A conversation about the cars and trucks we drive - USATODAY.com

Oct 29, 2009
Taxpayers' real cost of cash for clunkers: $24,000 a car, Edmonds.com analysis says
Taxpayers ended up paying an average of $24,000 per vehicle for the cash-for-clunkers program over the summer when sales that would have happened anyway are taken into consideration, says car-buying research site Edmunds.com.


The program, which cost taxpayers $3 billion, gave car buyers up to $4,500 in incentives to trade in their gas-guzzling clunkers to buy new fuel-thrifty cars. It was intended primarily to spur sales, and the economy.

But Edmunds.com says a lot of those sales would have happened anyway, with or without the clunkers program. Of more than 690,000 vehicles sold, only about 125,000 of the sales were entirely due to the government's added inducement, Edmunds.com says. The rest of buyers just got lucky by getting the government to kick cash into deals that they would have proceeded with anyhow. When the cost of the program is spread over just those extra incremental sales, the total is $24,000 per vehicle.

That's just about $2,000 shy of the average amount paid for a new car by buyers in August, $26,915.

To conduct the analysis, the Edmunds.com looked at the sales trend for luxury vehicles and others not included in cash for clunkers. It then applied those sales against the total adjusted sales rate of all cars to make estimates. "These estimates were independently verified through careful examination of sales patterns reflected by transaction data," it says.

“This analysis is valuable for two reasons,” said Edmunds.com CEO Jeremy Anwyl. “First, it can form the basis for a complete assessment of the program’s impact and costs. Second — and more important — it can help us to understand the true state of auto sales and the economy.”

[robine]

wow..


any one want to attempt to justify this program??

[Maddy00]

And again I ask...people here actually think the same government who ran that program can efficiently run healthcare?

[rae]

$160,000 Per Stimulus Job? White House Calls That 'Calculator Abuse' - Political Punch

$160,000 Per Stimulus Job? White House Calls That 'Calculator Abuse'

Posting its results late this afternoon at Recovery.gov, the White House claimed 640,329 jobs have been created or saved because of the $159 billion in stimulus funds allocated as of Sept. 30.

Officials acknowledged the numbers were not exact, saying that states and localities that reported the numbers have made mistakes.

In recent days, the Recovery Act board has been reviewing all the numbers, with many inaccurate ones having been posted. California's San Joaquin Regional Rail Commission received $5 million in stimulus funds to hire workers to build addition train track for the Union Pacific Railroad in an economically tarnished spot of the Golden State.

Brian Schmidt, director of planning and programming for the commission said that his staff originally reported to the Obama administration that the stimulus money saved 250 jobs. Then, realizing they had mistakenly double credited, they later changed that to 125 jobs. Tuesday, they updated it again to 74 jobs.

Ed DeSeve, senior advisor to the president for Recovery Act implementation, said he'd been "scrubbing" the job estimates so much since they came it at the beginning of the month that he now has "dishpan hands and my fingers are worn to the nub."

White House officials heralded the unparalleled transparency in reporting job numbers to the public, but acknowledged there is no consistent standard across states or localities, or among federal agencies giving out stimulus funds, in differentiating between a “saved” job and a “created” job.

The White House argues that the actual job number is actually larger than 640,000 -- closer to 1 million jobs when one factors in stimulus jobs added in October and, more importantly, jobs created indirectly, such as "the waitress who's still on the job," Vice President Biden said today.

So let's see. Assuming their number is right -- 160 billion divided by 1 million. Does that mean the stimulus costs taxpayers $160,000 per job?

Jared Bernstein, chief economist and senior economic advisor to the vice president, called that "calculator abuse."

He said the cost per job was actually $92,000 -- but acknowledged that estimate is for the whole stimulus package as of the end of 2010.

Vice President Biden heralded news this week of gross domestic product growth in the 3rd quarter of 3.5 percent, saying "the economic forecasters have attributed ... the vast bulk of this growth to the Economic Recovery Act -- the much-maligned and battered Economic Recovery Act. Put another way, without the Economic Recovery Act, it's very unlikely this economy would have expanded at all this last quarter. It may have even contracted."

DeSeve and Bernstein were not able to say how many of the 640,329 jobs were saved and how many were created. How do they know that government officials asking for stimulus funds to help prevent layoffs were legitimate?

"What we have to do is expect that our public officials are honest," DeSeve said. "I know that's a high bar."

Joining Biden at an event in which reporters were not permitted to ask questions, California Republican Gov. Arnold Schwarzenegger said the money California has received "has created or saved 62,000 teachers' jobs; but not only teachers' jobs. Those are for administrators and professors. So there's again people that said, 'Well, we would have done something about that, anyway.' No, those teachers would have been gone if it wouldn't have been for the federal stimulus money. I just wanted to make sure you understand that."

Of the 640,329 jobs cited today, White House officials said 80,000 were in the construction sector and more than half -- 325,000 -- were education jobs, despite President Obama's claim in January that 90 percent of the stimulus jobs would be in the private sector. Bernstein said Mr. Obama's pledge was an assessment of the totality of the jobs saved or created by the end of 2010.

Officials pointed out that today’s report did not include jobs saved or created by more than $80 billion in tax cuts, as well as other money in the $787 billion stimulus package, such as $250 stimulus checks for 54 million Americans.

[intheknow]

Maybe they could allocate funds to rebuild Taggart Transcontinental. I hear Wesley Mouch is available to help run the program . . . oh wait, I believe he is already part of the administraton.

[andys]

Why did he not just say that the stimulus saved the job of every american, that would have brought the average cost down, and I think he could have supported that claim just as reasonably as he can claim he saved 600k jobs. Its all so stupid.

[rae]

Politico's take:
Saved or created? W.H. can't tell - Eamon Javers - POLITICO.com

Saved or created? W.H. can't tell

White House officials announced Friday that they had counted exactly how many jobs were created or saved by recent stimulus spending: 640,329.


So how many were saved and how many created? They don’t know.


In a briefing with reporters, officials acknowledged they can’t tell the difference between jobs “saved,” and jobs “created” by the $787 billion stimulus package.


They said they also can’t tell the difference between private sector jobs and government jobs.


And they said that they had found and corrected significant errors in the data submitted in 57,000 separate reports to the federal government by Recovery Act funding recipients.


“I have dishpan hands, I’ve been scrubbing the data so hard,” joked Ed DeSeve, a Senior Advisor to the President for Recovery Act Implementation. DeSeve said his staff found one error of over thousands of jobs in the data before it was released publicly, and asked the recipient to resubmit accurate information.


“The data isn’t perfect,” DeSeve said. “Further updates and corrections will be needed.”


Critics have seized on the White House’s definition of jobs “created or saved” to call into question just how great the economic boost from the stimulus has been, especially at a time when the unemployment rate is approaching 10 percent. But the White House is counting both kinds of jobs the same in its overall tally of the stimulus impact.


The White House said 325,000 jobs were saved or created in the education sector – where many jobs are in the “saved” category as states used stimulus dollars to plug massive budget gaps that could have led to teacher layoffs. Another 80,000 are construction jobs.


Still, Jared Bernstein, the chief economist and senior economic advisor to Vice President Joe Biden, said he is confident that the stimulus bill “saved or created over a million jobs, and we’re on track to save or create the 3.5 million jobs we estimated over the life of the recovery act.”


And, he conceded, “there’s no data element in any government data set that is absolutely precise.”


Bernstein arrived at the 1 million number by extrapolating from the portion of recovery act funds for which the recipients were required to report jobs figures to the total amount allocated so far. The spending categories that required reporting were state fiscal support for education, private workers hired on federal contracts, and many grants to non-profits and local governments.


As of September 30, the White House said, $340 billion in funds and tax cuts had been obligated. Recipients of $159 billion of that were required to report jobs figures. And it was that $159 billion that generated the 640,329 “saved or created” jobs, officials said.


That boils down to a cost per job of $92,000, Bernstein said.


But for all the detail, he said that the data do not show whether the jobs are in the government or in the private sector. That’s because, he said, much of the money was sent to states, which in turn hired a mix of contractors and government employees to carry out tasks. Bernstein said that the White House’s earlier estimate that 90 percent of the jobs would be in the private sector, though, is “still valid.”


The issue of whether governments can accurately count jobs “saved” – since that is a hypothetical has provoked debate among economists since the White House began using the “saved or created” formulation earlier this year. Critics have argued that the recipients of the data have every incentive to inflate the number of jobs they planned to cut if they hadn’t gotten federal money. But DeSeve said that the White House left it up to the people reporting the numbers to make that determination for themselves. “What we have to do is rely on the fact that our public officials are honest,” he said. “We don’t differentiate in the reporting between created and saved jobs.”