You know where I stand on the McCain/Clinton idiocracy of a gas-tax-free summer on ozone alone. But this week, as Clinton danced around gargling free petroleum cake and running ads bad-mouthing Obama for taking the sober view, the economists spoke.
From the Washington Post:
Backing up Obama’s position against Clinton’s proposal to suspend the 18.4-cent-per-gallon tax for the summer is 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. Clinton says she would replace the lost revenue by raising taxes on the oil industry.
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
Christopher Flavin at Worldwatch Institute helped bring the global perspective to the cheap vote-grab McIllary is taking…
At a time when even President Bush acknowledges that the United States is addicted to imported oil, it is discouraging to see presidential candidates offering just another quick fix rather than a cure for this signature American illness. The very low U.S. tax on gasoline (by international standards) is in part responsible for getting the country into today’s disastrous energy predicament. Reducing those taxes further would only make that problem worse. And by adding to budget deficits, it would further undermine the dollar, contributing to additional oil price increases.
With oil now costing more than $110 per barrel and gasoline prices exceeding $4 per gallon in many parts of the country, it is popular to blame rising energy demand in China and India for the run-up in prices. Americans should instead look in the mirror. Last year, the United States consumed twice as much oil as China and India combined. In per-capita terms, U.S. oil use is 12 times the level in China and 30 times the level in India. And, unlike in the United States, only a tiny fraction of the oil use in these countries goes to personal transportation.
Of course, Bush blames Congress for failing to open ANWR, which would drop the price of a barrel of oil by 50 cents (in 2004 pennies), according to the Energy Information Administration.