The squandering of federal taxpayer dollars continues unabated. After the government's $3 billion "Cash for Clunkers" program did nothing more than shift and concentrate economic activity while increasing the deficit, the Obama administration is finalizing an all-new stimulus giveaway, "Cash for Applilances."
At least this looming boondoggle has a smaller price tag: $300 million. States will administer rebates to consumers who replace their major appliances -- air-conditioners, refrigerators and the like -- with new ones that are more energy-efficient.
The lessons of "Cash for Clunkers" should have been enough to stop this reincarnation. The program offered rebates of up to $4,500 for people who traded in older vehicles for new, more fuel-efficient models, but about five out of every six participants would have bought a new vehicle sometime this year anyway. Additionally, a healthy share of the rebates were applied to trucks and sport-utility vehicles that were only slightly more fuel-efficient than the trucks and SUVs that were traded in to qualify for the subsidy.
"Cash for Clunkers" led to an increase in buying this summer, but slower-than-normal sales before and after the program was in effect and inventory and paperwork problems for car dealers.
Now this perverse incentive is poised to manipulate appliance purchases -- just in time for the holidays. Anyone who might have been inclined to replace his dishwasher or remodel his kitchen this month or next will wait until he can get a check from the government to help cover the bill.
And the rebates will be much smaller than those handed out for cars. Some states will issue checks for only $50 to $100 -- barely enough to cover the administrative costs. (Nevada has been given about $2.5 million for the rebates; the state should have its program details finalized this month.)
What sectors of the economy will line up next for a "stimulus" bailout? "Cash for Cutlery"? A subsidy for consumers who trade in their working tube TVs and VCRs for high-definition, flat-panel TVs and Blu-ray DVD players?
The premise that it benefits the economy to discard functioning items before they are beyond repair is dubious at best. Putting taxpayers deeper into debt to do it is nuts.