Trade-ins:
- Average fuel efficiency: 15.8 mpg
- Gallons of gas used per year: 760(1)
New Cars:
- Average fuel efficiency: 24.9 mpg
- Galons of gas used per year: 482(1)
Fuel Savings:
- Galons of gas saved each year per vehicle: 760-482 = 278
- Vehicles traded in: 700,000
- Total fuel savings: 195 million gallons / year
Barrels of Oil:
- Gallons of oil per barrel: 42
- Gasoline obtained from a barrel of oil: ~20
- Barrels of oil imported: ~11 million / day
- Barrels of oil saved by CFC program: 9.75 million / year
- Cost of a barrel of oil: ~$70
- Dollars saved: $682 million / year
- Import days saved: <1
Dollars and Cents:
- Cost of the CFC program: $3 billion
- Dollars saved per year: $682 million
- Years to recoup inital outlay: 5(2)
Summary:
Looking at the dollars and cents, did the program make sense? The $3 billion dollar outlay will be recovered after 5 years but then continue to create gains.
However, cars don’t live for ever. All the program did was encourage owners to exchange their cars sooner. If CFC caused an owner to replace a car that they would have replaced anyway within the next 5 years, then this was a net loss. I don’t know how many of the clunkers exchanged had a life expectency of at least 5 years @ 12,000 miles per year. For every exchanged car that didn’t save us 5 years we need another exchanged car to have saved us more than 5 years.
The only time the collective american pocketbook comes out ahead is if we encouraged someone to replace a clunker that was not going to be replaced anyway within the next 5 years. How likely is that? How likely is it that the average trade in wouldn’t have been replaced anyway within the next 5 years?
There is also the issue of reducing our dependency on foreign oil. All of the clunkers traded in let us reduce our annual imports of barrels of oil by less than 1 day. Factor in the impact of cars that may have been traded in ayway and you probably get to less than 1/2 of 1 day of imported barrels of oil saved. Sure, every little bit helps, but was $3 billion in debt worth it to save 1/2 of 1 day of imports? That equates to spending $2.2 trillion to end our dependency on foreign oil (ignoring the fact that we don’t have enough oil to service ourselves without foreign oil imports). Is that worth it? Maybe, I don’t know.
(2)based on 5% interest rate, on a loan of $3 billion repaid at $682 million / year
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I recently received an email that contained a sentence of the form: “The decision has been made…”. This immediately set off alarms in my head. There is a subtle difference between this passive form and a more active conjugation: “I/We have decided…”
With the passive form, as I received it, it is clear that the decision is controversial. Most likely the author does not even agree. The passive voice distances the author from the debate and hides them from any fallout due to this “bad” decision. Likewise, no indication is given as to who made the decision so, at the same time, passive voice discourages further debate on the topic.


