Well, let's hope the Chancellor reads this before he finalises his budget plans:
Yep - it looks like that "successful" German scrappage scheme has had undesirable knock on effects!
Who'd have though it, eh?
Monday, 13 April 2009
Michael Cunningham: Your mother and I have decided to help buy you a new car.
Arnie Cunningham: That's what everyone wants isn't it? Well, fuck you. I'm fixing up Christine.
The credit crunch has certainly revealed some of the most stupid economic "management" you'll ever see, but the nonsense just keeps on coming.
A huge howler approaching in the next budget is the so called "scrappage" scheme. Whether this scheme is implemented will provide the ultimate yardstick into just how clueless these morons running the economy are.
What is "scrappage"? The basic outline is, any car owner taking their car aged 9 years or more to be scrapped will be given a voucher to the tune of £2000 that they can spend on a new car.
But is that what everyone wants?
1) That £2000 is paid for by everyone, in higher taxes (deferred to the future if they fund it by borrowing now as they presumably will) or inflation (if they fund it with some of that "quantitative easing") whether they use a car or not. Fair?
2) Secondhand values are distorted upwards, as they will now have a falsely allocated state subsidised "voucher value" - so a low income person who wants a cheap motor would have to pay more. Fair?
3) People who were quite happy with their old car, now rush to buy a new one to get the subsidised price. That means they don't spend money on other purchases they would otherwise have made - so the car industry gains at the expense of other businesses. Fair?
4) All of our mass market cars are made by foreign owned firms, so most of the benefit will go to foreign business (there will be only a small spin off benefit to some British firms). Fair?
5) These car firms handing round the begging bowl for taxpayers help are the first to complain about government interference, taxation and "red tape" during the good times but now they want our money, and lots of it. Fair?
Now, don't think for a second government ministers won't be made aware of how this interference in the market will cascade through the economy. They might be stupid, but one thing they are not is ill informed. So if they do go ahead and introduce this horrendous scheme, you know that they have ruthlessly chosen to help the car industry at the collective expense of the whole country and indeed the poor. Shitters.
We'll see in the budget whose side they are on. And if you hear a lot of talk from the chancellor about "the environment", watch your wallet.