Lesson in Economics - Econ 101 - Page 3

One Billion Dollars

The government claims 700,000 clunkers were replaced so that is 224 million gallons saved per year. That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption. More importantly, 5 million barrels of oil at $90 per barrel costs about $450 million dollars.

So, the government paid $3 billion of our tax dollars to save $450 million. They spent $6.67 for every $1.00 they saved.