Old fridge? ?Cash for Appliances? looms

[Scuba19]

http://www.msnbc.msn.com/id/34169891...shington_post/

Old fridge? ?Cash for Appliances? looms
Federal program will aim to boost sales of energy-efficient models

WASHINGTON - In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher.

On the heels of its ballyhooed "Cash for Clunkers" program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as "Cash for Appliances."

Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.

And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.

"The premise seems to be that for Americans to be richer, they need to throw out their old appliances faster ? I don't see it that way," said James D. Hamilton, an economics professor at the University of California at San Diego, who has blogged about the clunkers rebates. "I don't like the idea of just spending money for its own sake."

While many economists believe that government incentives to lift consumer spending can boost the economy during a recession, they differ over whether the sales spikes that accompany the rebates are meaningful or merely concentrate sales that would have occurred before and after the rebate period anyway.

'Shift expenditures'
The Obama administration's Council of Economic Advisers has indicated that the clunkers program provided a worthwhile boost even though many of the 690,000 clunkers sales would have happened anyway. In their baseline assessment, the program increased car sales in 2009 by 330,000.

Clunkers "is one of several stimulus programs whose purpose is to shift expenditures by households, businesses, and governments from the future to the present," the council wrote in a September report. "Such time-shifting is valuable in a recession, when the economy has an abundance of unemployed resources that can be put to work at low net economic cost."

The appliances program may be destined to continue the debate. For when it comes to stimulus, timing can be critical, and the implementation of the effort has dragged on, possibly diminishing its usefulness.

Although the $787 billion stimulus program was signed by Obama in February of 2009, much of the cash-for-appliances money won't hit the streets until next February, March or April. The rebate program is being run by state governments, which must define and enact their rebate plans with federal government funding and approval. A survey of some of the largest states shows that California is planning to begin its program in March, New York in February, Pennsylvania in the spring, Illinois in January and April.

Under the program, Virginia is expected to receive $7.5 million, Maryland $5.4 million and the District $568,000, but the requirements and rebates have not yet been disclosed.

Now the home appliance manufacturers who celebrated the passage of the program worry that the delay in its implementation might actually depress sales at first, with consumers putting off purchases until the rebates begin.

"Our desire would be to see these programs rolled out as soon as funding is available," said Jill Notini, a spokeswoman for the Association of Home Appliance Manufacturers. "Unfortunately, you may have people saying, 'It's kind of on the blink, but we'll wait.' We wish that the states would follow the intent, which is to stimulate the economy now."

The number of shipments of home appliances in the United States, which is closely linked to new home construction, is down 12 percent from last year, Notini said, and this comes after three years of decline.

No one doubts that the appliances program will attract consumers. While the programs will vary by state, some of the proposed rebates that have been announced so far range from $50 to $100 per appliance. The state-administered programs also have varying requirements regarding whether consumers must recycle an old appliance to qualify for the rebate.

The states are required to estimate how many jobs their programs will create. California, which will receive $35 million, preliminarily estimated that it will create 350 jobs. This was based on the assumption that for every $92,000 expended, one job would be created.

Overshadowing the debate over the rebate program are questions regarding the health of the U.S. economy, which despite some signs of strengthening is still beleaguered by high unemployment. So while the rebates will be slower to get into consumer's hands than some had hoped, some economists said the economy remains weak enough to justify the program even if it isn't enacted yet.

"No one is saying we are going to have too much growth next year," said Zach Pandl, an economist at Nomura Securities. "We want full employment of the economy's resources, and we're nowhere near that at this point."

You have got to be kidding me. Do these people know no bounds (rhetorical question)?

The states are required to estimate how many jobs their programs will create. California, which will receive $35 million, preliminarily estimated that it will create 350 jobs. This was based on the assumption that for every $92,000 expended, one job would be created.

[Melkor]

Gotta make that economy grow brah. Print dat money and send it out.

[VTheKing]

In before "cash for computers".

Imagine that - everyone gets a PC that can fulfill their basic needs - like run Crysis in 1680x1050.

[F23]

Don't these people realize that increased durable goods purchasing now will result in decreased durable goods purchases in the near future? These programs will do nothing to increase net GDP, even in the course of a year or two.

[wrathofhan]

Cash for clunkers worked so well, so why not continue the tradition?

[JuanDenver]

Yeah.

Were about due for obama and his media to hark on another "recovery" celebration because of an extremely tiny and short bump in spending.

[flabtoabs]

we've had cash for appliances in canada for a while now.
for example
if you have an old furnace or central air and your upgrade it to a high efficiency or "greener" unit, government sends your a cheque.

my parents received nearly $1200 for replacing the central air on our home.

[DatsunKing1]

Originally Posted by wrathofhan

Cash for clunkers worked so well, so why not continue the tradition?

I hope thats sarcastic...

[NorthMass]

cash for shoes

[Scuba19]

Originally Posted by wrathofhan

Cash for clunkers worked so well, so why not continue the tradition?

I'll give you the benefit of the doubt, and assume you're joking.

[Bababooey100]

I wonder is Obama will count this as green?

[TeeR4v_Gainer]

i want cash for tvs. i need a new one bad

[wrathofhan]

Originally Posted by Scuba19

I'll give you the benefit of the doubt, and assume you're joking.

C'mon guys, the government paid three billion dollars for about a hundred thousand new cars, that's like a great deal!

[Scuba19]

Originally Posted by wrathofhan

C'mon guys, the government paid three billion dollars for about a hundred thousand new cars, that's like a great deal!

Thanks for clarifying. I don't assume too much these days since there are actually people out there who would make the same comment you did, only seriously.

Government efficiency! Right?

Maybe we can continue this efficiency, and pay out $10 thousand for every new refrigerator?

[Uncle Bob]

Hmm, clunkers cost us taxpayers 3 billion which lead to the destruction of about 700,000 perfectly good cars and most people (from what I hear) didn't really choose a vehicle with much better gas mileage when they traded in their old cars. Now appliances, eh?

The inefficient program is bad enough but the government playing around with the market and training people to accept taxpayer handouts is far worse.

[Will.i_am]

Originally Posted by DatsunKing1

I hope thats sarcastic...

Out of curiosity how did it not work well? It lead to a huge sales spike fueled only by government supplying a small percentage of money used to buy the item. What's more, October saw higher annualized car sales than pre-C4C months. Just as significantly, the cars consumers bought got an average of 10mpg better mileage than the cars they traded in.

It was a great use of the $3 billion or whatever relatively infinitesimal amount of money it was. I encourage you to find a better way to spend $3 billion during a time of a deflationary recession.

[Scoundrel]

Originally Posted by Will.i_am

Out of curiosity how did it not work well? It lead to a huge sales spike fueled only by government supplying a small percentage of money used to buy the item. What's more, October saw higher annualized car sales than pre-C4C months. Just as significantly, the cars consumers bought got an average of 10mpg better mileage than the cars they traded in.

It was a great use of the $3 billion or whatever relatively infinitesimal amount of money it was. I encourage you to find a better way to spend $3 billion during a time of a deflationary recession.

people like you are the reason i hated living in seattle(srs)

[Will.i_am]

Originally Posted by Scoundrel

people like you are the reason i hated living in seattle(srs)

I know right, people who can talk politics without resorting to personal insults really suck.

[Halfway]

This isn't just an economic issue, look at the bigger picture.

Mother Gaia will be much happier when those horrible, polluting fridges and cookers are out of American homes, packed into in huge cargo vessels and shipped half way around the world to be dumped in villages in west Africa or asia

You neocons need to stop being so selfish and think of the planet because while Obama can save the economy, the Ozone layer isn't going to repair itself

[nutsy54]

Originally Posted by wrathofhan

Cash for clunkers worked so well, so why not continue the tradition?

And this one will be a downright bargain.... If it also goes triple over budget, that's still "only" $1 Billion!