Some of the highlights from the Brookings Institute Paper:
"The net result was a negligible increase in GDP, shifting roughly $2 billion into the third quarter of 2009 from the subsequent two quarters."
"The CARS program created 0.7 jobs for each million dollars of program cost, resulting in a cost of $1.4 million per job created. This suggests that the CARS program was far less cost effective at creating jobs than other fiscal stimulus programs, such as increasing unemployment aid, reducing payroll taxes, providing an additional social security payment, or allowing the expensing of investment costs."
"The CARS program led to a slight improvement in fuel economy and some reduction in carbon emissions. The cost per ton of carbon dioxide reduced from the program suggests that the program was not a cost-effective way to reduce emissions, although it was more cost effective than certain other environmental policies, such as the tax subsidy for electric vehicles or the tax credit for ethanol."
"In the event of a future economic recession, we would not recommend repeating the CARS program. While the program did accomplish both of its goals of stimulating the automobile market and decreasing carbon emissions, there are more cost effective policy proposals to achieve these objectives."
So in other words, not cost effective. But interestingly, still a better deal than subsidies for ethanol and electric vehicles.
So if this wasn't cost effective, and was a better deal than ethanol and electric car subsidies, how bad are those subsidies?
