Kurt Brouwer October 19th, 2009
In a post on the Cash for Clunkers program, I joked about a similar program for appliances. But, I should not have joked because such a program was included in the economic stimulus program passed earlier this year. CNBC reports [emphasis added]:
Dollars for Dishwashers? Appliance Rebates on the Way (CNBC, August 20, 2009, Christina Cheddar Berk)
…The government’s so-called “Cash for Clunkers” program has been grabbing headlines, but it’s not the only federal program putting money back into consumers’ pockets. A new government program is poised to help appliance manufacturers the same way “Clunkers” gave a jump start to auto manufacturers.
As part of the Obama Administration’s economic stimulus bill, nearly $300 million was set aside to fund a state-run rebate program for consumers purchases of Energy Star-qualified home appliances.
Like the “Clunkers” program, the plan takes aim at energy guzzlers. However, unlike in the popular auto program, consumers will not have to turn in their old appliances in order to buy a more efficient one and qualify for the rebate. However, the exact criteria remain unclear because states are still drafting their individual plans, with the hope of having the programs up and running by the end of this year…
Great line that says so much, ‘…the exact criteria remain unclear…’ It really is impossible to parody Congress anymore. And, of course, the fact that Cash for Clunkers has been a fiasco will not stop implementation of Dollars for Dishwashers.
Now, we find that even Dollars for Dishwashers was not the end of the government’s effort to subsidize our purchases. We also have Cash for Golf Carts.
Cash for Golf Carts
As part of the American Recovery & Reinvestment Act of 2009 (ARRA), there is a stimulating program that is helping golfers buy electric golf carts. I am not knocking golfers with this post, in fact, I play golf from time to time. I even spent several years of my wayward youth caddying at a tony country club.
However, I really don’t see why we need to borrow money — that’s what economic stimulus really means at this point — to subsidize golfers who want to buy a cart, do you?
One problem with very large government programs is that there are always unintended consequences. I suspect the legislators who worked on this program did not really intend to give electric golf cart sales a boost, but who knows what evil lurks in the heart of the vast golf cart lobby? This editorial from the Wall Street Journal describes program [emphasis added]:
Cash for Clubbers (Wall Street Journal, October 17, 2009)
…Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart.
The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart...which is typically in the range of $8,000 to $10,000. “The purchase of some models could be absolutely free,” Roger Gaddis of Ada Electric Cars in Oklahoma said…
Free. When it comes to almost any consumer product, if you make it free, you can in fact stimulate demand. That’s not exactly news though.
The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour.
…The IRS has also ruled that there’s no limit to how many electric cars an individual can buy, so some enterprising profiteers are stocking up on multiple carts while the federal credit lasts, in order to resell them at a profit later…
This golf-cart fiasco perfectly illustrates tax policy…politicians dole out credits and loopholes for everything from plug-in cars to fuel efficient appliances, home insulation and vitamins…then insist that to pay for these absurdities they have no choice but to raise tax rates…
This is kind of funny in a way. We don’t generally think of golfers who tootle around in golf carts as needy, but they are just responding to incentives, so you can’t really blame them.
However, if you think of this as a wasted and misguided use of our money, then it’s not so funny. And, if you multiply this sort of idiocy thousands of times in many different industries, then it starts to get infuriating.
Congress & the vast golf cart industrial complex
I doubt if anyone in Congress is in thrall to the vast golf cart industrial complex, but the American Recovery & Reinvestment Act is now funding well-to-do golfers who want a FREE personal golf cart. I shudder to think of what’s next.
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