This is classic pay-me-now-or-pay-me-later, near-term-gain-for-long-term-pain thinking. Let’s face it, the age of cheap oil is history. America must now adapt to this new economic reality.
Showing us just how much he really does not know about economics, Senator John McCain has proposed Federal gas tax relief (Memorial Day to Labor Day) as a way of alleviating some of our economic pain this year. Does this sound good to you? Yeah, I thought so too until I did the math.
Hillary Clinton, recognizing a good election year ploy to buy your votes, was quick to endorse McCain’s idea, while Barack Obama is saying, “No.” How come? I think it’s because he believes it’s better to be honest with voters. He trusts that voters are too smart to be bought for the price of a cup of coffee a day for ninety-seven days.
The Federal excise tax on gasoline, by the way, is 18.4 cents per gallon, it’s 27.2 cents per gallon on diesel fuel. If the tax on just the gasoline were to be suspended for the summer, each of us who drives a car would save approximately 46 cents a day, assuming that we drive an average of 50 miles a day and that our car gets 20 miles per gallon of gas. But, given that there are approximately 300,000,000 registered vehicles in America today, not counting commercial trucks and recreational vehicles (let’s say just two-thirds of them are driven the average 50 miles a day), the Highway Traffic Fund would lose $91,908,000.00. While not as generous as the Economic Stimulus package that Congress has already agreed to add to deficit spending this year, the money that we might not spend individually at the pump this summer will be money that won’t be spent later maintaining our nation’s highway infrastructure. Hmmm… I wonder how many jobs in how many states this amount of money translates into.
This is a classic case of pay-me-now-or-pay-me-later, near-term-gain-for-long-term-pain thinking. Let’s face it, the age of cheap oil is history. America must now adapt to this new economic reality.
At a time when economic conditions signal the need for expansion- ary fiscal policies on the part of our Federal government, it’s no time for anyone to be “nickel-and-dime’n” their way into the White House. We need to drastically reduce our demand for foreign oil, which is the biggest part of our trade deficit, and we need to cut down on CO2 emissions for the sake of our planet. We do not need government to subsidize our continued gluttony, even if only psychologically and if only for a few short weeks. The only winners will be the share holders of big oil. Only when world demand for oil declines will prices decline.
Please feel free to comment pro or con to this posing.