On Friday the House is expected to vote on the Waxman-Markey climate change and energy bill, which contains an aggressive cap-and-trade program. Critics have pointed out that it could impose serious harms on the U.S. economy with little environmental benefit. The CBO entered the fray [.pdf] recently and announced that by 2020, the annual cost to the average household would be a mere $175. Not bad for saving the planet, eh?
Of course that number is absurd. Just as Tom Woods took pleasure in documenting how the Supreme Court managed to “reconcile” federal actions with the Constitution, so too did I (and the rest of the IER hit squad) have fun pointing out the CBO’s tricks.
My favorite example: The CBO argued that cap and trade would raise nominal energy prices more than household income would rise. Thus, because the income tax is indexed to price inflation (they claim), it means households fall into lower tax brackets. The CBO counted this as an $8.7 billion benefit to households from the cap and trade scheme, which it used to suppress the overall hit.
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If they want to stand behind these phony numbers, they should put in a clause that gives all households an income tax credit for all costs in excess of $175. However, the cost of “Cap and Trade” is small in comparison to the cost of replacing coal at $29 per MWH versus wind at $90 and solar at $140 under various renewable energy initiatives.
…but what is the “average family”? a married couple with exactly 2.1 children? aggregates sure are good at sugaring the bitter pill.
Not even sure how this means the programme will not on the whole be a net drain on the economy. The logic used by the CBO is lost on me.
And at a time when the Government wants to reduce healthcare costs, it simultaneously wants to increase energy costs. Last time I checked, hospitals have a lot of equipment that requires electricity.
Cap-and-Trade is the Smoot-Hawley of out time. I have been making this point for the past week. A friend sent me the following.
Cap-and-Trade: We spoke with one of our Washington-based sources Wednesday night and he said that a proposal … to force the President to impose tariffs on imports from countries not abiding by certain emissions standards is almost guaranteed to be included in a final cap-and-trade bill, up for vote on Friday. The intent of the amendment is to win the votes of Democratic legislators from Midwest, blue collar districts who could then go home for the July 4th recess and say that they are doing something about economic competition from China and India.
Of course, dressed up protectionism such as this could easily fuel retaliatory tariffs, a la Smoot Hawley in 1930. Ironically, the statute that would be amended to include this amendment, were it to become law, would be the Tariff Act of 1930, better known as the Smoot Hawley Tariff Act!
Cap-and-Trade is the Smoot-Hawley of out time. I have been making this point for the past week. A friend sent me the following.
Cap-and-Trade: We spoke with one of our Washington-based sources Wednesday night and he said that a proposal … to force the President to impose tariffs on imports from countries not abiding by certain emissions standards is almost guaranteed to be included in a final cap-and-trade bill, up for vote on Friday. The intent of the amendment is to win the votes of Democratic legislators from Midwest, blue collar districts who could then go home for the July 4th recess and say that they are doing something about economic competition from China and India.
Of course, dressed up protectionism such as this could easily fuel retaliatory tariffs, a la Smoot Hawley in 1930. Ironically, the statute that would be amended to include this amendment, were it to become law, would be the Tariff Act of 1930, better known as the Smoot Hawley Tariff Act!
I just received this link to a Financial Times article. Smoot-Hawley is alive and well.
The crash was in 1929 but the worst time of the Great Depression was 1931, 2 years. Today is 1929. Imagine what our country will be like in 2011
Excerpt:
WTO signals backing for border taxes
By Fiona Harvey
Published: June 26 2009 03:00 | Last updated: June 26 2009 03:00
Countries implementing cap-and-trade systems for greenhouse gases may be able to use border taxes to protect domestic industries, after the World Trade Organisation gave a cautious nod to such measures.
In a report to be published today, written jointly with the United Nations Environment Programme, the WTO said it was possible to implement border measures for environmental reasons under its rules.
“Rules permit, under certain conditions, the use of border tax adjustments on imported and exported products,” said the WTO. “The objective of a border tax adjustment is to level the playing field between taxed domestic industries and untaxed foreign competition by ensuring that internal taxes on products are trade neutral.”
http://www.ft.com/cms/s/0/d9d8ad2e-61e9-11de-9e03-00144feabdc0.html?nclick_check=1
Unless I missed any verbiage included in the CBO’s “analysis,” nearly the entire focus of this report is on byproduct emissions from the production of electricity. Where is any impact statement about other sources of energy that produce carbon dioxide when combusted?
Also lost in their “analysis” is any potential effect upon the individual’s use of fossil fuels for home heating (let alone vehicle travel). Will the government start taxing, regulating and/or monitoring individuals’ use of heating equipment for CO2 emissions, further driving up taxes and resource costs? If so, the millions of homeowners in the Northeast who have oil or coal heat will naturally confront those who want to further regulate their thermostats — and lives.
Just think: someday soon we could have home inspections to verify our Census reports for home heat source and emissions compliance. Doesn’t that sound like another great government program we’d all be proud to call our own?
whatever they do, nothing will change. We will continue to suffer. just sad!
You know the whole thing is a giant lie when the normal lies become ridiculous.
If this nonsense combined with healthcare nationalization doesn’t lead to tax revolts nothing will.
My home state of Kentucky is going to be decimated by drastic increases in the cost of coal power. KY is able to lure large manufacturing opportunities like Toyota into its state because of the availability to provide inexpensive power from coal. KY has very few signagture industries or comparative advantages outside of this, and to take it away with the careless flick of a pen will harm Kentuckians more than we can even forsesee.
Nexus, hate to say it but nothing will.
Not in our lifetime.
Nexus, hate to say it but nothing will.
Not in our lifetime.
Remember that FDR avoided a lynching despite being the almost singular cause of an entire nation’s suffering.
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