Imagine you’re a member of Congress. You’re a fan of the Cash for Clunkers program. You discover that the $1 billion that Congress budgeted for the program has been spent in FOUR DAYS. The program is now out of money. What do you do?
A. Realize that $4500 per clunker was too big a subsidy and that you can achieve the same effects with a much smaller amount.
B. Worry that maybe there is some fraud in the program and that some of the cash isn’t going to clunkers
C. Increase the budget by $2 billion
HT: Three Sources