Clunkergate is Coming.

When the government interferes to help one segment of the population, they will inevitably hurt another segment. The government has no money of its own. Every dollar it gives away must be taken from a citizen's pocket. And the repercussions most often go far deeper than the dollar they took.

Take for example the Cash for Clunkers program. People get $3500 to $4500 to turn in their old cars which will be scrapped. Good for the auto industry, says Obama. Good for the citizen who needs a new car, says Obama. Good for the environment, says Obama. But is it?

The program started out with one billion dollars, but quickly grew to three billion dollars. With approximately 130,000,000 individual tax returns filed each year, that roughly figures to an extra $25 per return. Well, that's not so bad, you say. But it doesn't end there.

"Clunkers" is a misnomer in this situation. Most of these cars are still running. I heard on the radio today that mechanics are hurting, and they're blaming this program. One mechanic said his business is down 25% this year, and he attributes it to the fact that people were waiting for this program to kick in, and they weren't getting their cars repaired. All those cars turned in will never darken the door of a mechanic's shop. And that means mechanics won't have as much money to spend, and they'll be laying off their helpers.

The scrapped cars will never be a low cost alternative to those who can't afford a new car. Their loss will, in fact, drive up the cost of the used cars that are still marketable. And that hurts the poor family who can't afford a new car even with a $4500 trade-in.

Good for the environment? Where do you suppose all these scrapped cars are going to end up? In a landfill somewhere? What about all those batteries and all that gunky old oil? What about that anti-freeze in the radiator? How about all those hydraulic fluids? And where are all those tires going to end up?

Then there's the fact that a lot of these people are going to be like the "victims" of the housing crisis. They're being encouraged to buy cars they can't really afford, and I guarantee at least some of them will default on their loans. Then instead of having an old car that's paid for and runs, they'll have no car and a bad credit rating. Then the banks will have a bunch of used cars to go with all the foreclosed houses they have. And I suppose we'll have to bail them out of that. Maybe they could offer a special - "Buy a car and we'll toss in a house for free!"

And we all know how fraud-prone government programs are. I predict that in a few months we're going to have Clunkergate. Some unscrupulous car dealer will be found selling the cars he scrapped, or there will be sales of cars to customers who never existed, or any number of schemes to get that $4500 per car.

The bottom line is, when the government gets involved, it does a whole lot more harm than it does good!