Your Tax Dollars at Work

This bit from Greg Mankiw's recent NY Times article caught my eye:

If you hire your neighbor for $100 to dig a hole in your backyard and then fill it up, and he hires you to do the same in his yard, the government statisticians report that things are improving. The economy has created two jobs, and the G.D.P. rises by $200. But it is unlikely that, having wasted all that time digging and filling, either of you is better off.

It caught John Derbyshire's as well:

Well, you're cardio-vascularly better off, aren't you? Whatever: I think it's safe to say there'll be a lot of $100-hole-digging in the nation's near future.

Indeed, Our Governement is already preparing such hole-filling plans.

The so-called “Accelerated Retirement of Inefficient Vehicles Act” is "Cash for Clunkers" with a twist. Instead of focusing exclusively on old cars as is typical with scrappage programs, this bill will target any vehicle with lower fuel-economy ratings. Participants will receive a cash voucher to purchase a more fuel-efficient new car or used car (model year 2004 or later) or receive credit for the purchase of public transportation tickets.

Under the legislation, “fuel efficient” means at least 25% better mileage than the CAFE standard. It will be illegal to resell the scrapped vehicles. Bill sponsors want to destroy 4 million pickups and SUVs over the next four years.

That's right. The proposal is to crush perfectly usable new-ish trucks and SUVs. It's difficult to believe anyone, even members of Congress, would think this makes economic sense.

Imagine a trillion dollars of this sort of thing.

Ann says: This is hardly a new idea, we have been doing exactly this sort of thing for decades in the farming industry: buying up surpluses, paying farmers not to farm, etc. Some of it done for exactly the same reason: to protect the environment from over-use of the land. All this proposal is, is an extension of farm policy to the auto industry.