by

The “Cash for Clunkers” program — which offers a rebate of up to $4,500 for people to trade in their gas guzzlers (the vehicle has to get below 18 MPG to qualify for the full rebate) for new, fuel efficient vehicles — has, for the most part, been hailed as a huge success.

The U.S. auto industry has seen sales soar, and environmentalists have been happy to see people trading in their Ford Explorer for a Ford Focus.

That being said, I’m here to tell you why the Cash for Clunkers program is a waste and is just perpetuating our current financial problems.

Before I get into why the Cash for Clunkers program is bad for the average consumer, let’s talk about the good intentions in which the program is rooted.Â The heart of the Cash for Clunkers program aims to serve two causes:

Help the United States automotive industry sell more cars by incentivizing people to purchase new cars Help the environment by having people trade in less fuel efficient vehicles for vehicles that get better fuel economy

Again, the basic idea of this is program is great.Â It has helped to stimulate car sales — Ford posted its first monthly sales gain in nearly two years this past month — and it has helped to get more fuel efficient vehicles on the road.Â Based on the latest statistics, the average gas mileage of trade-ins has been 17 mpg, while the average newly purchased vehicle gets 25 mpg, nearly a 50% increase.

So, as a site dedicated the fuel economy, on some levels I have to applaud the program.

That being said, overall, I have to rate this program a complete failure due to the fact it is putting more strain on the debt-burdened consumer and the deficit happy Federal government.Â Here’s what I mean:

The Consumer : Basically, the Federal government is offering people a $3,500 to $4,500 rebate to buy a vehicle that likely costs anywhere from $15,000 to $30,000.Â One of the reasons why so many of us are in trouble financially is because over the years we’ve taken on too much debt.Â This program encourages more of the same, leaving consumers even more strapped for cash and fostering an unstable and unsustainable economy.Â If someone offered you 15 cents if you gave them $1, would you do it?Â I wouldn’t either.

: Basically, the Federal government is offering people a $3,500 to $4,500 rebate to buy a vehicle that likely costs anywhere from $15,000 to $30,000.Â One of the reasons why so many of us are in trouble financially is because over the years we’ve taken on too much debt.Â This program encourages more of the same, leaving consumers even more strapped for cash and fostering an unstable and unsustainable economy.Â If someone offered you 15 cents if you gave them $1, would you do it?Â I wouldn’t either. The Federal Government: In case you hadn’t noticed, the Federal government has a national debt pushing $12 trillion.Â Just this year alone, the government is going to run over a trillion dollar deficit.Â In order to finance the soon to be multi-billion dollar “Cash for Clunkers” program — along with every other bailout and stimulus — the Federal government has had to borrow money, pushing the country deeper into debt.Â While in the short term this may not pose much too of a problem, in the long term this debt points to two certain things, neither of which are good: high inflation and higher taxes.

In the short term, the Cash for Clunkers program may provide a boost to the auto industry and the economy as a whole, but in the long term I see this program failing to live up to the hype, and dragging both the average consumer and the Federal government down with it.

For more information on the Cash for Clunkers program, check out the official website: http://www.cars.gov/