No economy is made better off by destroying existing resources. But that's what "cash for clunkers" tried to do, while only driving up the price of transportation for middle and lower-middle class families.
Reparations to heirs of slaves make sense so long as the actually guilty parties are the ones paying. Short of that, the policy being discussed has nothing to do with reparations. It's just a wealth redistribution scheme.
Many states assumed to be "turning blue" actually get more migrants from red states than from blue states. It's also a bad idea to assume that everyone who moves from Illinois agrees with the median voter from Chicago.