http://www.snopes.com/politics/gasoline/clunkers

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According to the CARS stats, the total dollar value of transactions conducted under the "Cash for Clunkers" program was about $2.9 billion.

Therefore (if all other factors remained the same), the full cost of the CARS program would be offset by gasoline savings in about four years — not a spectacular trade-off, perhaps, but not nearly as bad a one as claimed in the original analysis. (All of these figures assume the price of gasoline to be a constant, a dubious proposition since the cost of oil can fluctuate quite widely, especially in the short term.)

The original analysis also focuses solely on savings in gasoline costs and doesn't take into account other intended or residual effects of the CARS program, such as the economic benefits of boosting auto sales, reducing pollution by replacing older cars with more fuel-efficient vehicles, increasing safety by replacing older cars with vehicles offering advanced safety features, and providing additional parts and raw materials for the market:

[The clunkers'] components and frames ... have begun flooding the used parts and scrap-recycling markets with more than 100 million tons of steel, batteries, and tires, among other things.

"This is like a second wave of stimulus to our economy," said Bill Goodale, general manager of Millis Industries, which has picked up about 200 clunkers from local dealers and expects to take possession of hundreds more in the next few weeks. "As it trickles down, it helps junkyards. It helps the guy looking for cheap parts to keep his car going. It adds a lot of steel to a market that hasn't produced much of it in the last year."

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