Remember the federal government's "Cash for Clunkers" program a couple years back? To boost the mileage of the cars driven by the American people, Washington offered payments of up to $4,500 to drivers who traded in their old cars and bought new ones with better mileage. (In some cases, the improvement was slight, at best.)
The traded-in cars had to be destroyed, to ensure that they would not find their way back onto the nation's roads and highways. Literally hundreds of thousands of used cars - many of them in excellent condition - were scrapped as car buyers hustled to take advantage of all that "free money."
But benefits have costs. For example, the huge majority of Americans who did not buy new cars under the Cash for Clunkers program had to pay taxes that subsidized the new-car purchases of the minority who did buy. And by requiring the destruction of many good used cars, Washington reduced the nation's total supply of cars.
Now, predictably, used-car prices have gone through the roof. In fact, it has been at least 1996 since used-car prices have been this high, The Associated Press reported.
Part of that is because people are keeping their cars longer during the economic crisis. But part of it is undoubtedly because of the destruction of so many good used cars through Cash for Clunkers.
That may be a "good deal" for someone who is trying to sell a used car - and we don't begrudge a seller trying to get a good price. But it's unjust when prices for cars or anything else are artificially inflated by unwise government policies and distortions of the free market.