The Cash for Politically Incorrect Automobile program (aka cash-for-clunkers), which bought up only good used vehicles and left the real clunkers on the road, turns out to be a tax on the poor. It isn’t that the poor have to foot the bill for the $3,500 – $4,500 per auto purchased. No, they aren’t being taxed directly. The poor are paying for this because the price of used cars is being driven up.

The poor tend to not buy new cars. They are too expensive. The poor buy used cars.

When the feds’ Cash for Politically Incorrect Automobiles program bought up a whole bunch of used cars it drove the prices of used cars up. That is Economics 101. When supply goes down, demand and prices go up. Hello!? Anyone home in the federal government?

The whole thing is just plain stupid and irresponsible.

The feds who promised to not raise taxes on the poor have lied again. The poor are paying for the cash-for-clunkers program.

See Going Up: Used-Car Prices Climb in the Sept. 30, 2009 Wall Street Journal.

Stumble it!