Best fiscal stimulus plan ever: Cash for clunkers

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My column in the soon-to-be-on-newsstands TIME, which isn’t online yet, is about fiscal stimulus. So is Joe Klein’s column, which is online. It’s stimulus week!

Anyway, one stimulus idea that I didn’t get to, but really like, was one proposed by Alan Blinder last summer, Cash for Clunkers. Wrote Blinder:

Cash for Clunkers is a generic name for a variety of programs under which the government buys up some of the oldest, most polluting vehicles and scraps them. If done successfully, it holds the promise of performing a remarkable public policy trifecta — stimulating the economy, improving the environment and reducing income inequality all at the same time.

There are already similar programs operating on a small scale at the state and local level. Blinder’s idea is to put a few billion federal dollars behind the effort. To get two million clunkers off the roads would cost about $8 billion, including administration costs, he estimates. Removing five million cars would cost $20 billion.

The government would post buying prices, perhaps set at a 20 percent premium over something like Kelley Blue Book prices, for cars and trucks above a certain age (say, 15 years) and below a certain maximum value (perhaps $5,000). A special premium might even be offered for the worst gas guzzlers and the worst polluters. An income ceiling for sellers might also be imposed — say, family income below $60,000 a year — to make sure the money goes to lower-income households.

Blinder says that since he started pushing the plan, he’s heard from several members of Congress who were interested. I’m thinking it should really be part of this month’s stimulus discussion on Capitol Hill. Am I missing something, or is this the total no-brainer it appears to be?