by Effie Moore Salem

Created on: August 21, 2009   Last Updated: August 26, 2009

Whatever the eventual outcome of the billions the government allocated for Cash for Clunkers, it was a huge success as far as new car owners are concerned. Never before in the history of car buying and selling have there been such good deals as the recent Cash for Clunkers bonanza has shown. In its first week the government money of $350,000 to $400,000 per transaction ran out. This halted the sales until further legislation upped the amount to two billion. Many are asking why is the US government being so generous and where did the idea for such an improbable transaction originate?

Since the near collapse of the economy in the latter part of 2008 left the country shaky indeed, rapid government investments had to be made in order to attempt a reversal. Businesses were failing and the unemployment lines were lengthening and something had to be done. The economy had to be stimulated. The only possible way was to get money in the hands of the people so they would continue to buy goods and forestall bankruptcy. Thus the stimulus package and the money bonus every citizen received actually began to work. The economy is slowing pulling itself up by the bootstraps. (Never mind at this stage about the eventual payback and the increased taxes necessary to again balance the budget.)

Amidst the deliberations about reckless government spending, electing a new liberal president, the alarming rate of greenhouse gas from automobile and factory exhaust, the New York Times on July 27th, 2008 published A Modest Proposal: Eco-Friendly Status, an article by Alan S. Blinder that started the wheels rolling nearly a year later. In simple terms he explains his threefold reasoning: Reduce greenhouse gas by getting gas guzzlers off the road, stimulate a lagging economy, and put money in the hands of those in need of some extra money so they can buy. This buying spree will not only help those in need, but will help an ailing economy.

As an Economics professor at Princeton, and a former Vice President of The Federal Reserve, he knew wherewith he spoke. It was simply part of his job to steer the economy of the country in the right direction. It is doubtful, however, that he believed his simply little strategy would take wings and fly a year later. But it did. He was smart enough to rescue himself from being labeled only an academic scribbler by citing states and locations where this experiment had worked.

Well, whatever, his idea caught on as the past few weeks since its inception in June

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