http://www.cnn.com/2009/POLITICS/08/03/miron.clunkers/index.html
In addition to highlighting most of the points that we have already made, he goes on to point out the following:
"Government policy should not favor some industries at the expense of others, but that is exactly what cash for clunkers does. The program helps consumers who can take advantage, and it increases profit and employment in the auto industry. But funding for the program comes from all other taxpayers, so it harms the consumers and industries not supported by the program.
"Thus cash for clunkers creates winners and losers based on political considerations, not economic values. Whether or not government spending is a good way to stimulate the economy, the specific kind embodied in this program is misguided because it distorts the economy's allocation of resources across consumers and industries.
"Any spending stimulus, of course, tends to favor some sectors over others, which is one reason stimulus is better accomplished via reductions in tax rates, not increased spending. Tax cuts improve the incentives to work, save and invest, thereby making the economy more productive going forward. Reductions in tax rates are neutral across sectors and therefore let private valuations of costs and benefits -- not political connections -- determine winners and losers."
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