PERSPECTIVE: Believe it or not, there’s no such thing as free money

» Someday, we will have to pay for the federal cash-for-clunkers program.

The federal cash-for-clunkers program has turned out to be much more popular than anticipated, creating an administrative nightmare for dealerships and the customers who have flocked to them.

Then Congress scrambled to provide another $2 billion for a program that already had burned through the $1 billion it was meant to cost.

Apparently, Washington has been surprised to learn that Americans are wildly in favor of getting free money.

The money is not really free, of course — the country will have to pay the collective bill someday. But to the individual consumer who trades in his old gas-guzzler for a new fuel-efficient
vehicle, the subsidy seems like free money. What’s more, it enables him to buy nicer wheels than he otherwise would have — even if his old vehicle was working just fine.

The program will provide a modest environmental benefit. And it will give the auto industry a short-term boost. But it also provides a timely object lesson as the nation debates how to reform health care.

The Obama administration has been arguing that the country must “bend the cost curve downward” — that is, slow the rate of growth in spending on medical care. At the same time, it has been seeking to subsidize health care for all Americans. To see how the second goal conflicts with the first, simply substitute “cars” for “health care.”

The cash-for-clunkers program explicitly seeks to stimulate demand. Indeed, that was its chief selling point. Greater subsidies for health coverage aren’t being sold the same way, but they would have the same effect. Whatever benefits health care reform might bring, bending the cost curve down assuredly won’t be one of them.

Cash-for-clunkers is remarkably straightforward. Health care is mind-bogglingly complex. Having so badly bungled the former, why should Washington be entrusted to take charge of the latter?

— Richmond Times-Dispatch