So far in the annals of badly conceived government interventions into private enterprise, we have the late-1990s strengthening of the Community Reinvestment Act and Cash for Clunkers as the hall-of-fame candidates. The former created a housing bubble whose collapse ruined the financial markets, and the latter proved disastrous for automakers just as their new models hit showroom floors last month. Now a number of reports put a Porkulus program among these that essentially subsidizes the hoarding of golf carts for free:
As part of the huge $878 trillion (Or was it $787 billion? Can anyone remember, anymore?) “economic stimulus” created in Washington last winter, Congress OK’d a tax credit of between $4,200 and $5,500 for Americans who purchase an electric vehicle.
Some controversy arose as to which vehicles, exactly, qualified. The IRS recently ruled any electric vehicle qualifies for the subsidy, so long as it is road-worthy.
That means the model in question needs to have side and rearview mirrors and three-point seat belts, and be capable of going at least 15 to 25 mph. Meet those requirements, combine the federal credit with similar incentive plans in many states, and many a creative subject of the realm has discovered the government will now pay virtually the entire cost of acquiring a new … golf cart. …
The IRS also has ruled there’s no limit to how many electric cars an individual can buy, the Journal reports, inspiring some enterprising investors to stock up on multiple carts while the federal credit lasts, in order to resell them at a profit later on.
“This golf-cart fiasco perfectly illustrates tax policy in the age of Obama, when politicians dole out credits and loopholes for everything from plug-in cars to fuel efficient appliances, home insulation and vitamins,” The Wall Street Journal concludes. “Democrats then insist that to pay for these absurdities they have no choice but to raise tax rates on other things — like work and investment — that aren’t politically in vogue. If this keeps up, it’ll soon make more sense to retire and play golf than work for a living.”
It was $787 billion, a cost which comprised hundreds if not thousands of pet projects just like this. Democrats rushed the bill through Congress and refused to allow Republicans to participate in its construction. As a result, the effort was slipshod, ineffective, and as we see in this case, laughably incompetent.
The intent was to get people to replace their existing vehicles with electric-power cars, not golf carts. In this way it is similar to the Cash for Clunkers, except there was no requirement to retire an existing vehicle and no limit on the number or type of vehicles one could claim. Now American taxpayers will pay for road-worthy golf carts, and at least theoretically subsidize entire fleets of them for later resale and profit by hoarders. After all, tax credits are nothing more than subsidies funded by other American taxpayers.
Of course, these days, the Great Golf Cart Bubble may have been a feature rather than a bug.
Update: Rizzuto wonders why Obama hates caddies.