A few years ago I traded in an SUV for a Pontiac Vibe, and upped my fuel efficiency from about 18 MPG to 28.5 MPG. I got $1,500 for the trade in because my Blazer had pretty high mileage and with gas prices going up the value of a gas hog was going down.
But maybe I should have held onto the Blazer. I would have tripled what I got for the trade under the cash for clunkers program. Of course, I would have spent the difference on the inflated tab for gasoline over the past couple of years, not to mention taking a month or two off the lifespan of the McMurdo Ice Shelf with all the extra carbon I was releasing.
Instead, I did the responsible thing and spent my money — not a government handout — on a smaller, fuel-efficient car, only to see people being rewarded today for hanging on to their old gas hogs. Once again, a bit of public policy that seems relatively benign has the downside of rewarding people for doing the wrong thing.