The BIG Scam!

I find it shockingly depressing to have confirmation of what I have for a long time intuitively felt: that SO FEW in this country can actually post a “score” on an EEG test. This tidbit was brought to me today courtesy of a good friend…

Just look at how the stupid car buyer got taken to the cleaners in the recent “Cash For Clunkers” program (and remember once and for all – NOTHING is EVER Free, especially when the government is involved):

If you traded in a clunker worth $3500, you get $4500 off for an apparent "savings" of $1000. However, you have to pay taxes on the $4500 come April 15th (something that no auto dealer will tell you). If you are in the 30% tax bracket, you will pay $1350 on that $4500. So, rather than save $1000, you actually pay an extra $350 to the feds. In addition, you traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you did not need, that was costing you FAR less to operate than the payments that you will now be making. But wait; it gets even better: you most likely also got ripped off by the dealer. For example, every dealer in LA was selling the Ford Focus with all the goodies, including A/C, auto transmission, power windows, etc. for $12,500 the month before the "cash for clunkers" program started. When "Cash For Clunkers" came along, they stopped discounting them and instead sold them at the list price of $15,500. So, you paid $3000 more than you would have the month before (Honda, Toyota, and Kia played the same list price game that Ford and Chevy did). So let's do the final tally here:
You traded in a car worth: $3500
You got a discount of: $4500
---------
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
--------
Net so far: -$350
And you paid: $3000 more than the car was selling for the month before
----------
Net -$3350

We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3000 that you paid for the car, along with the 5 years of interest on the car loan, but let's just stop here. Why increase the pain? So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500 they "gave" you. The car dealers made an extra $3000 or more on every car they sold along with the kickbacks from the manufacturers and the loan companies. The manufacturers got to dump lots of cars they could not give away the month before. And the poor, stupid consumer got saddled with even more debt that they likely cannot afford. Obama and his platoon of scam-artists gone Super-Size convinced Joe consumer that he was getting $4500 in "free" money from the "government" when in fact, Joe was giving away his $3500 car and paying an additional $3350 for the privilege. If someone wanted a new car it would have been better to wait for this program to end (like now), sell your (your car) without the sale of your asset being treated as taxable income, and negotiate your new car at normal market prices.

And this is the government leadership that so many citizens STILL want to singularly run healthcare in this country. That’s simply amazing – only insomuch as I did not realize the sheer number of people in this country who are true zombies (the living dead, at least from the neck, up). What else could explain such dangerously misplaced confidence, such empty-headed stupidity?

Thanks for playing. :^/