Acton Institute Powerblog

Cash for Clunkers and the Poor

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I just read today that the cars traded in for the Cash for Clunkers program are rendered unusable by running liquid glass through the engines.

Has anyone considered the impact of this on the poor? What has happened is that a huge number of low cost cars are being removed from the market. These are cars low income earners would ordinarily drive or teenagers would buy them who need to get to school or work.

What happens when we radically reduce the supply of a particular good? If there are no good substitutes, then the price goes up. In effect, this is a tax on the lower end of the market.

“Progressive” policy isn’t always good for the poor. Acton has been making that point for years. Hopefully, it is becoming more obvious.

Hunter Baker Hunter Baker, J.D., Ph.D. is an associate professor of political science at Union University and an Affiliate Scholar in Religion & Politics at the Acton Institute. He is the author of The End of Secularism and Political Thought: A Student's Guide.

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