 | The McCain Gas Plan: Tums for Stomach Cancer |
The Washington Post reports this morning on…
| a slew of economists who argue that the proposal, first offered by Sen. John McCain, the presumptive GOP nominee, would be counterproductive. They argue that cutting the tax would drive up demand for gas at a time when the supply is tight, which would mean that the price at the pump would drop by much less than 18 cents per gallon.
The tax suspension would, as a result, cut into the highway trust fund that the tax supports, a loss of about $9 billion over the summer, but also result in fatter profit margins for oil companies…. Harvard professor N. Gregory Mankiw, who has written a best-selling textbook on economics, said what he teaches is different from what Clinton and McCain are saying about gas taxes. “What you learn in Economics 101 is that if producers can’t produce much more, when you cut the tax on that good the tax is kept . . . by the suppliers and is not passed on to consumers,” he said. |
A lasting solution to the gas price crisis would involve conservation, the widespread deployment of wind farms, mandates to car producers on fuel efficiency that kick in before your kids become grandparents, and so on. You know, an energy policy. John McCain would rather toss a few pennies to the average consumer in a temporary policy that does nothing to halt the progression of the fossil fuel crisis into catastrophe and that not coincidentally would add a few billion dollars more in profit to the oil companies’ ledgers.
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Our nation’s roads are already in dire need of massive amounts of money to conduct needed repairs and upgrades. Poorly maintained roads cost us by increasing vehicular repairs and causing more accidents. Eliminating the tax for the summer would deprive us of the money necessary to maintain roads. Besides, at the end of the summer, when the tax is re-instated, people will scream at the huge increase. As you’ve stated, in the long run, eliminating the tax for a few months will end up raising the cost of gasoline.
Comment by Mark — 5/1/2008 @ 11:45 am
What ever happened to getting OFF of foreign (and domestic) oil? You know, like investing in renewables (solar, wind, tidal, geo-thermal etc) to decrease our demand and, even more importantly, to stop dumping C02 into the atmosphere at the ever-increasing rate we’re doing now (and will continue to do as long as we use fossil fuels as our main energy source).
i still say that if MOST of the daily short hop commuters used electric golf carts and/or bicycles, or simply walked (or used public transportation) we’d see an almost immediate drop in gas prices (and hopefully diesel too). The Amish out where i live have no problem getting around on leg-powered scooters, horse and buggies, and walking.
Comment by Tom — 5/2/2008 @ 12:12 pm