WSJ: Cash for Clunkers is “Crackpot Economics”

The Wall Street Journal takes a look at the cash for clunkers program:

this is crackpot economics. The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.

A great application of the broken window fallacy from Henry Hazlitt’s Economics in One Lesson.

Let’s not forget the resources poured into the bureaucracies used to administer wealth-redistribution policies. Considering how poorly managed Cash for Clunkers is, why would anyone want government to run health care?

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