Giving the Economy a Tune-Up

Have you ever taken an old video game and traded it in toward a new one? How about an old book or CD? This was the idea behind the Cash for Clunkers program. On June 24, 2009, President Obama signed into law the Car Allowance Rebate System (CARS). It began in July 2009 and ran until November 2009. It soon became known as Cash for Clunkers. This government program would provide $3 billion to help consumers trade in an older car and buy or lease a new one.

The Cash for Clunkers bill was one of the first bills Obama signed as President.

The Cash for Clunkers program wanted to do two things. First, it tried to get consumers to purchase more fuel efficient cars. Efficient means producing something with little or no waste. A fuel efficient car runs cleaner than a ‘clunker’ and produces fewer fumes that hurt the environment. The Cash for Clunkers program was also meant to stimulate the economy. To stimulate means to help something grow. The program gave each buyer up to $4,500 toward a new car. By the end, nearly seven hundred thousand clunkers were removed from American roadways.

By August 26 the government had given out almost $3 billion dollars for traded-in clunkers. This money was used by consumers to purchase nearly 700,000 new cars. Late in the summer of 2009, car makers like Ford, General Motors, and Honda all announced an increase in demand for new cars because of the program. Each car maker said they would be making more cars. Some people see this as evidence that the program was a success.

President Obama hoped the Cash for Clunkers program helped our economy. Presidents create or change many government programs. Not everyone agrees with their decisions. Not everyone agrees that the Cash for Clunkers program was helpful. However, Presidents create or change things to try to improve people’s lives. They want to make America a better place to live.

TLX News Journal – Economics Activity:

Final Activity:  What other programs could our leaders create to help the economy? Create your own new program or idea on how the government can help stimulate the economy. List the details in your report.