Cash for Clunkers will put GDP over the top in Q3

| 25 August 2009 12:04

You may have heard the reports that US auto dealers were swamped on Monday night as the car scrappage scheme dubbed “Cash for Clunkers” expired. American taxpayers were eligible for a tax rebate of up to $4500 for trading in an older gas guzzler for a new vehicle.  And all evidence shows that they took the government up on the offer – in droves.  According to the U.S. Department of Transportation, there were in excess of 625,000 transactions for $2.58 billion in rebates.

While I tend to think this scheme is pulling forward demand for vehicles, it is going to mean a huge boost to Q3 GDP.  Unless we get a relapse in Q4 or Q1 2010 when I had expected the recession to end, the recession is technically over right now in all likelihood.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Related Posts
More About: , , ,