CONGRESS IN FANTASYLAND

If Congress suddenly required every car and truck in America (all 250 million of them) to be immediately destroyed and replaced with new cars and trucks that got better gas mileage, would the country be worse off or better off?

Those members of Congress who voted for the "Cash for Clunkers" program would probably say "better off," even though a perfectly good auto and truck stock would be destroyed. Under "Cash for Clunkers":

• Millions of workers would be employed to replace all of the existing cars and trucks; yes, that would be true, but everyone else would be poorer.
• Those who had to buy a new car would have less money to spend on everything else, which would mean fewer jobs in the rest of the economy -- more autoworkers but fewer farmers, teachers and medical researchers -- not a good trade-off.

Members of Congress say that we are saving gasoline by having a more efficient auto fleet -- which ignores the fact that building a new car takes far more resources, including petroleum, than could possibly be saved by the gain of additional miles per gallon.

They are living in a fantasyland, concludes Rahn.

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