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Clunker-Like Subsidies May Mainly Affect Timing of Purchases



(p. A6) The next program to test the effect of government funds comes this fall. Consumers who buy high-efficiency appliances such as refrigerators, washing machines and dishwasher can receive rebates of up to $200 on certain products; no trade-ins would be required. The $300 million program was included in the $787 billion stimulus law.

As with the clunkers program, it's unclear whether the rebate program will offer anything more than a short-term economic boost.

"The people who will most like likely respond to this are the people who need appliances, and they were probably going to buy appliances anyway," said Erik Hurst, an economist at the University of Chicago's Booth School of Business. "If all you've done is move that from tomorrow to today, then the economy is going to lag even more tomorrow."



For the full story, see:

SUDEEP REDDY. "Dealers Get More Time to File for Clunker Rebates." The Wall Street Journal (Weds., AUGUST 25, 2009): A6.





Comments

You know what? To artificially spur retail sales for the *next* quarter, we should have people turn in their old furniture, burn it, and then let them buy new furniture with taxpayer subsidies! Cash for Clunkers is nothing more than a modern day version of the Broken Window Fallacy and it hurts the poor more than any other group. http://www.sbabg.org/2009/08/03/cash-for-clunkers-is-a-modern-day-version-of-the-broken-window-fallacy/

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