According to two University of Delaware economists, the $300 million rebate and energy-saving program will likely waste money and potentially even increase energy usage. Focusing their analysis on refrigerators, Abrams and Parsons calculated that the $50-$200 appliance rebates will produce a net loss for taxpayers. And in some cases, consumers will expend even more energy utilizing older models for extra capacity, since they do not have to be salvaged, unlike the ‘Cash for Clunkers’ program, which is reported to have wasted $825 million.
The economists recommended lowering the rebates to $30 in order to stimulate the same consumer response, but at a much lower taxpayer price tag. This analysis would appear to bolster government critics who claim that taxpayer handouts such as ‘Cash for Clunkers’, ‘Cash for Appliances’, and other well-meaning programs often fail to achieve their desired objectives, while bilking the taxpayer and adding to the budget deficit.