I guess it doesn’t matter how “Cash For Clunkers” programs are set up, they seem to run into problems. But what could anybody expect from a government-run program.

Well, the final numbers are in and the program even spent less than the allotted $3 billion. Government authorities are calling it a huge success. What I am looking for is the aftermath. What is going to happen now at the dealerships and the automakers? I sure hope I am wrong – with all my heart I hope I am wrong. If I am right, I would be willing to bet that we won’t hear much about how this program took the industry back toward the brink of collapse – it will be blamed on something else. Can you just see me shaking my head?

The problem with articles like this is that they are very short-sighted. Sure there is a boost to dealers, to steel mills and scrap yards but how long will it last? While dealers have sold a lot of cars, it only amounts to less than 5% of the total number of new car sales predicted for one year. And dealers have collected only about 2% of the rebate mony from the government. With the program ending on Monday, plan on seeing a huge drop off in car buying after that. All the people who were planning on buying a car over the next 3-4 months will have already bought their vehicles, which leaves a big void of buyers through the beginning of next year. That will lead to reduction of car orders which will lead to a reduction in steel demand which will lead to a reduction in scrap demand which puts us right back where we are now, still a very fragile economy on the edge of recovery. I’m not trying to be a doomsayer, I’m just putting forward the picture that the logical part of my brain has painted. Believe me, I’m generally a very optimistic person so this is hard for me to say. So, what are your thoughts?