How to create a welfare state

(As I commented on at Don Suber’s place)

Cash for Clunkers.

People waited for CFC to kick in to buy, so car sales were depressed in the weeks leading up to it. Other people are accelerating car buying plans to take advantage of it while the window of opportunity is open. When CFC runs out (sometime in August?) car sales will plummet again. Then the government will have to create another car sales incentive program to bolster sales again…and again…and again…and again.

This is how welfare states are created. In a year a two nobody will buy a car unless the government is involved.  Two advantages for the government.  1) The get to play Robin Hood with other people’s money (like yours) with a very tangible ‘bringing home the bacon’.  2) It gives the government almost unlimited control over the otherwise private transaction.  CFC, “you give us this old car and we’ll give you X dollars” is wrapped up in hundreds of pages of regulations.  It boggles the mind that the bureaucrats in Washington can generate that many rules in such a short time, but hey…they had to be good at something.  Each CFC transaction creates something like 20 pages of documentation.  And of course, if the paperwork isn’t filled out correctly, the government can deny payment leaving the evil capitalist dealer in the lurch and putting even more dealers out of business.  This the other way welfare states create “clients”.


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