With the Cash for Clunkers program getting an additional infusion of $2 billion last week, I thought it might be interesting to look at actual taxpayer impact for the program.

Before I get to the numbers, here’s a “did you know” for you: Did you know $50 million was allocated for administration of the cash for clunkers program. That’s $50 million to manage a short-term (ends November, 2009) mostly paper process. I don’t know why that kind of waste doesn’t piss more taxpayers off, but it should. I’ll volunteer to manage the next round of the program for $10 million and then retire with the remaining $40 million on some island.

Now to the numbers.

*$3 billion of total allocation to the program, $2,850,000,000 net if you assume $150 million for “administration”.

*If you assume $4,000 average per recipient (average of $4,500 and $3,500 stipends), that’s 712,500 people that will benefit from yours and mine generosity.

*According to the most recent tax statistics, there are 138 million tax filers in the United States. If you subtract the aforementioned 712,500 from that number, that leaves a net of 137,287,500 taxpayers left to pay the bill for the $3 billion program.

*If you divide the $3 billion by the 137 million or so taxpayers, you get an individual or family contribution of $21.85 for the program. $22 doesn’t sound like a lot but how would you feel if you got shorted $20 on a withdrawal from your bank. Or how about if you got overcharged $22 on your groceries.

What does it all mean?

I’m not benefiting from the program, neither are my neighbors; chances are yours aren’t either. What it means is that my neighborhood (which is a small one) consisting of about 150 homes is pooling their money together to fund a new car for somebody. And so is the neighborhood next to ours, and so on, and so on.

Now consider the hard numbers regarding impact to the auto industry. Congress would have you believe that the Cash for Clunkers is a lifeline- salvation for a struggling industry. In reality, it’s little more than another wealth redistribution scheme (see prior paragraph).

2008 U.S. auto sales was 13.2 million, 3 million off the 16 million from 2007. Assuming all 712,500 Cash for Clunkers sales are incremental and not already planned purchases (a false assumption to be sure), that figure represents only a 5.4% boost to annual sales based on 2008 figures. If you use the 16 million from 2007, that’s only a 4.4% increase. Considering sales look to be off 20-30% that’s hardly the type of salvation the industry needs.

What the auto industry needs is a healthy, vibrant economy free from government interference. Unfortunately what they’re getting is scraps and handouts and false economic theory. And a short term boost that I fear will end up doing more harm than good to the industry itself.

But by all means- enjoy your new car. And my $22.

You’re welcome.

End of the year and catching up on a few odds and ends. You may recall back in early October I invested $50,000 of virtual dollars in some undervalued blue chip stocks. I did so according to the principles of buy low, sell high, or more to the point- “when there’s blood in the street, invest”. The market was imploding and it made sense to snatch up some stocks.

So far the investment hasn’t paid off (shocker). Thanks to Co-Presidents George Bush and Barack Obama, the market still hasn’t fully recovered, and my virtual portfolio reflects that. My original $50,000 is down to about $46,796 for about a 6.5% loss. Just for fun, I’ll continue to keep tabs on it throughout the next year.

You’re welcome.

If you’re looking to risk some of the next economic stimulus check, this weekend may be the perfect chance to do it. Here are some of the mid-week Vegas lines for your amusement.

Ohio State is currently a 20.5 point favorite over Michigan. I can’t recall when either team was favored double digits in the rivalry, let alone over 20. Stranger still is that Ohio State has only covered the spread 4 times this year and yet 83% of the money is going to the Buckeyes. With a sloppy track and Tressel ball in full bloom, it’s hard to believe OSU will cover, but here’s hoping they do.

How bad have things gotten at Syracuse? Not only was your coach fired but you’re a 19.5 point dog at Notre Dame. Probably going to get worse though- like losing to Notre Dame worse.

Where Vegas oddsmakers really earned their money this week was setting a line for 0-10 Washington at 1-10 Washington State. The good news for the Washington Board of Tourism is one of these teams is going to get a win. Whoopeeee!

Despite being 10-0, coming off a dominating performance of Oklahoma State, and a #2 BCS ranking, Texas Tech is still a 7 point underdog at Oklahoma. Still no respect for the Red Raiders I guess. I’m picking OU but wouldn’t risk a cent on this one. Except of course the over/under- the line is set at 76 points. My guess is this thing makes it to at least 80.

The game to decide the Big Ten (at least partially) has Penn State a 14-point favorite over visiting Michigan State. The line hasn’t budged but right now 91% of the money is going to Michigan State. Take from that what you will.

Finally, here’s an interesting link at trojanwire.com. Not surprisingly USC would be favored in any national championship match up, this according to the Wynn sportsbook. The worst game would be USC vs. Alabama, where USC is currently an 11-point favorite. The best game would be against Florida where USC is currently only a 1.5 point favorite.

You’re welcome.