Lets assume that a clunker car travels 12,000 miles a year at 15 mpg and thus uses 800 gallons of gas a year. A new vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year. So, the average Cash for Clunkers transaction reduced US gasoline consumption by approximately 320 gallons per year.
Now the government claims 700,000 clunker vehicles were removed from the road with this program, so that's 224 million gallons of gasoline saved per year. That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption. More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars, so the government paid $3 billion of our tax dollars to save $350 million dollars.
In summary we spent $8.57 for every dollar we saved.
I'm pretty sure the federal government will do a great job with our health care though!
H/T: Marigrace
