According to proponents of the cash for clunkers program, the program would boost sales of environmentally-friendly automobiles, boost the jobs of automakers, and help the environment. To cynics, the program would be little more than a rescue to the automakers and their unions. To its critics, the program 1) would not increase the demand for automobiles except for shifting demand from one period to another. In addition, critics argued, 2) if it did succeed at reducing CO2 emissions, it would do so inefficiently. There is already evidence for #1 (see here). John Palmer links to another piece that provides evidence for #2.
What's that that Milton Friedman said about using other people's money on yourself? Something about caring for the benefits but not so much about the cost. So this doesn't surprise me at all.
Don't forget the problems some dealers have had getting paid by the government. And there's evidence that consumers who participated in cash for clunkers have double the rate of buyers remorse of the typical car buyer.
And still, some people want to expand governmental reach into health care markets, despite the theory and evidence that shows government involvement in private goods markets often leads to less than desirable results.
