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With Americans racing to auto dealerships to collect vouchers of up to $4,500 for trading older cars for high-mileage new ones, Washington has approved an additional $2 billion for the Car Allowance Rebate program. The Administration claims that the initial $1 billion allocated for this "cash-for-clunkers" campaign triggered sales of nearly 250,000 new vehicles and that the new money will lead to 500,000 more purchases. Is this program a cost-effective tool for boosting the economy? And will it encourage long-term interest in fuel economy?
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