Every article says it was bad, but why? And was there any good to it?
In: Economics
Like so many big government programs, the long-term effects were both beneficial and detrimental, depending on who was affected by them.
On the bad side, it increased the national debt. It unjustly compensated people who drove crappy old cars while offering nothing to people who wisely decided to drive more fuel-efficient cars. By scrapping working cars, it affected both the new and used car markets, which affected car prices for everyone, often to the detriment of average consumers. It compelled some people to participate and to purchase new cars on credit, even when they could not realistically afford those cars. It decreased the ability of certain used-car parts, since those vehicles were destroyed rather than scrapped for parts. And I’m sure there were other negative consequences from the program.
That’s not to say that there weren’t some positive results from the program. It got some gas-guzzling, unsafe vehicles off the road. It decreased fuel needs for the entire nation as a whole. It provided some stimulus to the national economy, such as the obvious benefits to new-car manufacturers. It decreased pollution, which basically affects the health and welfare of the entire nation. Etc., etc.
So, it’s not so much that the program was “good” or “bad.” It affected the nation, both positively and negatively, in complex ways.
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