The unintended consequences of a federal program: 'Cash for Clunkers' is having an adverse impact on vehicle repair shops. The program is providing an incentive for people to trade in their used vehicles rather than fixing them. This is costing repair shops lost revenue from repairs. The Wall Street Journal has the details.
This is an excellent example of what happens when the government meddles with the market. The longer-term consequence of this program is going to be a shortage of used vehicles since the cars traded in must be disabled and then destroyed. The shortage is going to cause used car prices to increase.
