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Tuesday, August 4, 2009

Is Cash for Clunkers a Good Idea?

The government's Cash for Clunkers program has been a big hit with consumers who have jumped at the ability to get up to $4,500 of a new-car purchase, helping to clear cars off deal lots.

But as the Senate now considers adding another $2 billion to the initial $1 billion for the program, some are questioning the benefits of this program for the larger economy.

Sure, Cash for Clunkers has helped the automakers, but what about helping to stimulate the nation's economy and end the recession?

"This proves one thing: If you hand out money on the street corner, people will take it," said James L. Gattuso, a senior fellow in regulatory policy at the Heritage Foundation, a conservative think tank.

The top 10 selling cars so far through the program, according to the Department of Transportation, are: the Ford Focus FWD, Toyota Corolla, Honda Civic, Toyota Prius, Toyota Camry, Ford Escape FWD, Hyundai Elantra, Dodge Caliber, Honda Fit and last the Chevrolet Cobalt. - ABC News Story

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