Stone-Cold Lead Pipe Lock #1: The Cash For Clunkers Buyer Bailout

I guarantee we will have a multi-billion dollar bailout for idiots who bought cars they could not afford because of the stupid Cash for Clunkers program. I give it 2 years.

You would have thought Democrats learned their lesson when, 4 years after Bill Clinton famously decreed "Every American has the right to own a home," the country suffered an economic collapse that had been built on the paper mache foundation of home mortgages for people who could not afford to buy homes, regardless of the initial terms.

File this under the "Here we go again," category. By the time this is over, 750,000 people will have purchased new vehicles through the program, amassing approximately $15 Billion in new consumer debt. Now, if a person could afford to pay cash for a car they probably weren't waiting around for this program to do it, so we can safely assume almost all buyers in the program are taking on debt and monthly payments.

Don't bother looking for data - there isn't any. I feel confident in my assumptions, and here are a few more to support my case. First, who is it that owns a vehicle that they are willing to trade in for this program? Does it stand to reason that if you had previously purchased a new vehicle that gets less than 19 mpg, and were still paying it off, that you would want to take on the additional payment? Of course not. This logic also applies to any vehicle that is currently being financed, or at least it should. Also, the vehicles being traded in should have considerable wear on them - you wouldn't trade in your 5 yr old Hummer for $4500 - that's silly. So these cars are typically, well, clunkers.

Well-established adults may be interested in the program, but at the same time are significantly less likely to own a vehicle that meets the above criteria. The middle class family with kids should be disinclined to take on the burden of a monthly car payment, unless they are stupid. Working and non-working lower-class are the most likely to own such vehicles, but again, these people are in no situation to buy a new car. Young people entering the workforce are the most likely group to participate, which brings us to the economy as a whole.

The kid fresh out of school who buys a new vehicle after getting a decent job then gets let go. Uh-oh, now what? And what of the stupid lower-class and middle-class families that buy in and then quickly realize they can't afford the payments?

It's a nightmare situation for Democrats, who effectively incentive debt with this program but have no management of who is qualified or not qualified to take on the debt. It's the mortgage crisis all over again, if on a slightly smaller scale. Once people start defaulting on car loans the Dems will have no recourse but to bail them out. The American taxpayer to the rescue!

My advice to anyone who has participated in Cash for Clunkers is to wait 4 months and then stop paying your car payment and immediately call your congressman, senator, and anyone else who will listen and tell them your sad story. There is no chance they can let all of those people lose their cars and worse, let the auto industry fall flat again! The Democrats stupidity is your gain!