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August 10th, 2009
11:14 AM ET

Why 'Cash for Clunkers' works

[cnn-photo-caption image="http://i2.cdn.turner.com/cnn/2009/POLITICS/08/06/senate.clunkers/art.clunkers.gi.jpg" caption="An additional $2 billion for Cash for Clunkers was approved in Congress last week."]

Jack D. Hidary
Special to CNN

Our country is facing a daunting economic challenge this year and we must take steps to pull ourselves out of this ditch.

One such program that has hit the ground running is Cash for Clunkers. It's helping consumers move beyond these hard times and has reignited a whole industry.

Cash for Clunkers is now working in more than 10 countries around the world. In Germany, consumers have junked more than 1.2 million guzzlers in the last five months and significantly boosted the economy there. So we know that Clunkers programs get the job done. How many other government programs can you say that about?

Senate has joined the House in passing an additional $2 billion for Cash for Clunkers, allowing the program to move forward. This will bring additional buyers to the showroom. One key feature of the Clunkers program is that it is not just $3 billion of new money into the economy. It is injecting $21 billion - since consumers must bring the rest of the money to pay for the new car. That is a lot of stimulus for the dollar.

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