Former Obama economic adviser Austan Goolsbee has decided that maybe Cash for Clunkers wasn’t such a hot idea after all. Cash for Clunkers, if you’ll recall, was the scheme in which the goverment gave people who turned in their old cars cash to buy energy-efficient new ones, and then destroyed the old ones. Goolsbee now regrets the program, although his reasoning still leaves something to be desired:
Former Obama administration economic adviser Austan Goolsbee said Thursday that if given a second chance he would not have backed the Cash for Clunkers program or the home buyer tax credit passed in 2009 to stave off further economic distress.
“Because we didn’t know if [economic recovery was] going to be short or long,” the Obama administration tried measures to address both scenarios, Goolsbee explained on MSNBC’s “Morning Joe.”
“If you look at Cash for Clunkers or the first home buyer tax credit, they were geared to trying to shift [recovery] from 2010 into 2009. Given it’s taken this long [to recover], I don’t think you would do that short-run stuff,” Goolsbee added.
This makes no sense, because Cash for Clunkers and the home buyer tax credit were supposed to make the recession a short one. The administration thought that these programs would usher in a booming recovery, hence the word stimulus. They were wrong, of course, but it’s totally backward to maintain now that the length of the recession rendered the programs useless when the point of the programs was to shorten the recessions.
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