In an effort to get 'clunkers' off the road, the proposed the Cash For Clunkers plan is supposed to offer between $3500 and $4500 for people's old cars. This will be done in an effort to induce people to buy new, fuel efficient cars. The only problem is that this program will end up hurting the poor.
The supply of affordable used cars will disappear as the program lays out hundreds of millions of dollars to get them off the road. This unintended consequence will show itself in two ways: Used cars that would have sold for $1000 or $2000 will now be 'worth' $3500 or more and will sell for that much on the open market and; What used cars that are out there will be sold to the government and crushed, depleting the total supply of cheap used cars. The supply of cars for the poorer citizens will have disappeared, leaving them without affordable transportation. How is this supposed to help them?
I can imagine this response from the Socialist-In-Chief:
“At least while you're walking to and from your low paying job you'll have nice fresh air to breathe!”