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July 30, 2009 8:17 PM by Daniel Saltman

After barely a week in full-tilt operation the "Cash for Clunkers" program has been suspended. As recently taken apart in a Mises Daily, this program is a particularly absurd example of the broken-window fallacy. But the suspension of the program has brought even more economic absurdity.

Rep. Candice Miller breathlessly tells us "The thing has exploded. It has exceeded everyone's expectations." Before we go on let's just pause and reflect on these people who were surprised. Here is the amazing turn of events:

1. The government starts handing out free money.
2. People start grabbing it as fast as they can.
3. The bureaucrats quickly realize that they are hitting the program's budget in mere days (of the program being finalized) and suspend the program.

What is the reaction to this perfectly foreseeable sequence of events? "...dealers were amazed...", "the explosively popular... program."

As if the program itself and the surprise at its reception weren't enough, there is one more bit of economic foolishness dolloped on like a cherry on top. Returning to the brilliant Rep. Miller (representative from Michigan and co-architect of the glorious program) she is enthused at the results: "'Throughout our history, it has been auto sales that have pulled us out of recession. People are more likely to buy cars than houses. Not to be too Pollyannaish, but we're gettin' our mojo back. This could be the pivot' that begins an economic recovery."

How do you get an economic recovery going? Start raining free money down on everyone's heads. I grew up thinking that the people from the Middle Ages were idiots... They believed the earth was flat! Turns out they didn't actually. But Rep. Miller (and how many Americans?) really does believe this nonsense. I have found the Dark Ages and it is us.