Clunker Economics
Issue 140 - September 30, 2009

• A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
  
• A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
  
• So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.
  
• They claim 700,000 vehicles so that's 224 million gallons 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.
  
• So the Government spent $8.57 to for every dollar saved.
  
• How good a deal was that ???
  
• They'll probably do a great job with health care though!!

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