To begin here, I am by no means in favor of the cash for clunkers program. The "clunkers" are perfectly good new cars for the most part and the program is a thinly veiled attempt to make people purchase "green" vehicles, or at least greener vehicles. It's anti-market government directed spending and I'm not all that sure it benefits the U.S. car manufacturers as they were taking losses on these vehicles before. I'm sure we'll hear Congress and the President crow about how this is an example of how people really want the greener cars, not the $9,000.00 off that results in next to no note (some manufacturers are matching apparently, especially the government ones, which means they are double subsidizing the purchase of these vehicles). Meanwhile, the perfectly good cars are destroyed, rather than resold which is kind of like the Soviet Union tactics and those of FDR with farmers in the New Deal, meaning we're creating false demand and directing the economy. In other words, this program is pretty much evil, but since it looks good on paper and distracts people with new shiny things, it's going to continue.
What should be taken from this is if the government had cut taxes in the first place, rather than spending tons of money to supposedly generate jobs, the economy would have bounced back in the first quarter. Now we're just creating more long term debt as the government sucks up tax dollars to subsidize green vehicle purchases. The snake oil salesman have found their tonic.