Old fridge? Here comes ‘Cash for Appliances’

[stormcris]

WASHINGTON - In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher.

On the heels of its ballyhooed "Cash for Clunkers" program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as "Cash for Appliances."

Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.

And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.

"The premise seems to be that for Americans to be richer, they need to throw out their old appliances faster — I don't see it that way," said James D. Hamilton, an economics professor at the University of California at San Diego, who has blogged about the clunkers rebates. "I don't like the idea of just spending money for its own sake."

While many economists believe that government incentives to lift consumer spending can boost the economy during a recession, they differ over whether the sales spikes that accompany the rebates are meaningful or merely concentrate sales that would have occurred before and after the rebate period anyway.

'Shift expenditures'
The Obama administration's Council of Economic Advisers has indicated that the clunkers program provided a worthwhile boost even though many of the 690,000 clunkers sales would have happened anyway. In their baseline assessment, the program increased car sales in 2009 by 330,000.

Clunkers "is one of several stimulus programs whose purpose is to shift expenditures by households, businesses, and governments from the future to the present," the council wrote in a September report. "Such time-shifting is valuable in a recession, when the economy has an abundance of unemployed resources that can be put to work at low net economic cost."

The appliances program may be destined to continue the debate. For when it comes to stimulus, timing can be critical, and the implementation of the effort has dragged on, possibly diminishing its usefulness.

Although the $787 billion stimulus program was signed by Obama in February of 2009, much of the cash-for-appliances money won't hit the streets until next February, March or April. The rebate program is being run by state governments, which must define and enact their rebate plans with federal government funding and approval. A survey of some of the largest states shows that California is planning to begin its program in March, New York in February, Pennsylvania in the spring, Illinois in January and April.

Under the program, Virginia is expected to receive $7.5 million, Maryland $5.4 million and the District $568,000, but the requirements and rebates have not yet been disclosed.

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Thoughts?

[tericared]

We sure could a new stove as ours is atleast 20 years old, came with the house and the oven has a mind of it's own.... 

[JoshiRachelsMom]

*sigh* When will it end?

[EireLass]

This has been in place in MA for awhile with our electric company. 

[tericared]

I came back to add of course just like the car thing this will only work for people who can afford to go buy one.... 

[stormcris]

Is that for switching from gas to electric or just for upgrading? Many power companies have different programs which makes you wonder. The government rolled out the help for energy saving housing upgrades earlier but the income levels are so low on that the people it would help cannot afford the difference even with it.

Quoting EireLass:

This has been in place in MA for awhile with our electric company. 

[stormcris]

I wonder this myself, when are they going to realize the trade off for immediate kills in the long term.

Quoting JoshiRachelsMom:

*sigh* When will it end?

[stormcris]

Very true.

Quoting tericared:

I came back to add of course just like the car thing this will only work for people who can afford to go buy one.... 

[notjstanothrmom]

It would be nice. We're looking at buying a house that was forclosed and if we did buy it we would need a new stove... we have a fridge but I'd love to buy a new one too that would match the stove!!

[EireLass]

I don't have gas anything, so I don't know about that part. But electric...if you buy energy star labeled products, send in your paperwork and get money in the mail! Of course, my 3 new appliances didn't count with it!! BLAH!

Quoting stormcris:

Is that for switching from gas to electric or just for upgrading? Many power companies have different programs which makes you wonder. The government rolled out the help for energy saving housing upgrades earlier but the income levels are so low on that the people it would help cannot afford the difference even with it.

Quoting EireLass:

[Mergath]

I would be much more supportive of this if these so-called "Energy Star" appliances really were much more energy efficient.  However, from what I've been hearing, they aren't really any better than the regular appliances.  I'd much rather see the Obama admin give huge rebates for people that set up solar or wind power for their homes, or something like that.