The Obama administration has hailed the“cash-for-clunkers” stimulus program for its part in the automobile industry recovery.
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But a recent study is putting the program that ended in 2009 back in the news and highlighting its alleged failures.

Economists from Texas A&M University evaluated the stimulus program and found it cost the automobile industry billions of dollars. The study –“Cash for Corollas: When Stimulus Reduces Spending” – highlighted how the environmental objectives of the program interfered with the stimulus objectives.

Short Boost, Then Decline

The study found the increase in sales for the two-month program was completely offset by lower sales during the next seven to nine months. Furthermore, the fuel-efficiency restrictions on the types of vehicles that qualified for trade-in under the program reduced industry revenue by $3 billion over the 9-to-11 month period.