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Where the cash in ‘cash for clunkers’ went

Meanwhile, the places that have gone through some of the toughest times – the socially conservative “Evangelical Epicenters” and the “Minority Central” counties, which have large African-American populations – saw much smaller benefits.
Where the money went
The idea behind the Car Allowance Rebate System (its official title) was straightforward. Consumers could trade in older, less fuel-efficient vehicles and receive a credit of either $3,500 or $4,500 toward the purchase of a new, more fuel-efficient vehicle.
But the credit was only for new vehicles. That fact, without question, played a role in how the money was spread around Patchwork Nation’s community types.
People in the “Monied ’Burbs,” “Boom Towns,” and “Campus and Careers” communities simply have more money to spend, even in a recession. A new car isn’t out of the question for many residents in these places.
As a result, $146 million in cash-for-clunkers money went to the “Campus and Careers” counties. That comes to $11.71 per person. In the “Monied ’Burbs,” the figures were $798 million and $11.60 per person. The “Boom Towns” totaled $614 million, or $10.09 per person.
On the other hand, if you have a lower income, it may be that $4,500 isn’t enough to push you to buy a new vehicle. That appeared to be true in the “Minority Central” counties and the “Evangelical Epicenters”: Less than $100 million went to each of these community types, and that translates to less than $6.50 per capita in each type.
Rural, agricultural “Tractor Country” communities, which have ridden out the recession fairly well, seemed to take a pass on the program. Only tiny amounts of clunker money found its way there: about $7 million total, or $3.60 per person. As we’ve noted before, these communities tend to be more careful with expenditures that might be seen as unnecessary. Also, as much as some people like green vehicles, a Honda Civic may have less utility for farmers when it comes to, say, towing capacity.
(This analysis is based on the money that dealers took in. But it’s possible that customers crossed county lines and thus community types to buy cars – particularly in rural locales, where dealers can be scarcer. For this analysis, however, we assumed that most car purchases are local.)
Larger impacts
Critics of cash for clunkers have argued that the program’s focus on new cars – aimed at spurring auto production – hurt the poor. Our community breakdown suggests that this may well be true.
But one argument for the program, in terms of stimulus anyway, is that it could focus on places that have a big impact on the US economy. The “ ’Burbs” and the “Boom Towns,” populous and wealthy, tend to drive consumer spending in the United States. Giving these places money could in fact give a boost to the larger economy. Under this reasoning, the money would essentially “trickle down” to everyone else.
But the money that trickles down from the “Monied ’Burbs” will probably first trickle to the poor people in the immediate area: They’d benefit from the wealthy having more disposable income in the community.
The people living in the other locales may be waiting awhile for their share. Groups:
- Dante Chinni's blog
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Where did the money go? It
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[...] Source: Patchwork
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Cash for Clunkers did nothing
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