It's a lucky thing you are not handling the health budget. Your maths on the above is all over the place
I don't know your street prices, but how can you equate the saving of 224 million gallons of gasoline a year at maybe $4 pump prices to being the equivalent of the same amount in gallons of crude oil at about $1.80 a gallon?
Plus, your estimate of the possible saving could be viewed as fairly conservative in a couple of ways. For one thing I would say the average clunker does closer to 13k or maybe 15k miles a year, which will bump up the differential.
For another thing, and I accept your less efficient cars in the States probably would give only 25 mpg, but here in Europe anybody buying economical cars in schemes like you are discussing, none of these cars will do less than 40 mpg, most doing closer to 50 mpg. The gallons are Imperial and bigger than the US gallons, so 40 mpg here would be 33 mpg over there.
If people changed to these more economical turbodiesels potentially it could halve the amount of fuel used by these "clunkers" as you call them.
Even leaving the bare economics and mathematics aside for the change, I'm sure at least some of the incentive for pushing the change was keeping auto workers in a job, and contributing to taxes and keeping dollars flowing.
In a recession if the government does something to free up the economy, they are damned.
In a recession if the government does
nothing to free up the economy, ....................