Politics

Washington Flunks Budget Math (Again)

Republican presidential contender Mike Huckabee says he majored in miracles, not math. 
It’s a cute punch line, but the liberals who now run Congress seem to have adopted it as words to live by.

That’s not funny when you’re in charge of trillions of dollars of taxpayer money. Instead, it makes Congress as dangerous as a baby with a hammer (as Will Rogers said). You know something valuable is about to get smashed. 

Which brings us to Washington’s latest plan to address high energy prices: raise taxes on everyone who produces gasoline. Do these mental giants believe oil companies will LOWER prices if the cost of business goes up?

Even fifth graders are smarter than this. Yet House Speaker Nancy Pelosi plans to make oil and gas producers pay $18-billion more in more taxes, to punish them for making lots of money. Just when experts start projecting that gasoline will be cheaper by summer, the Gang That Can’t Add Straight wants to make sure that prices will rise to cover the tax hike.

Their explanation? Government will invest that money “in clean renewable energy.” That would be a miracle if it worked. But simple math shows that if cheaper and cleaner energy were available, the marketplace would already offer it and we consumers would already be buying it instead of paying sky-high prices for gasoline and heating oil. 

Congress is flunking math and economics. The truth is that the money will pay promoters who claim they will do what everyone else has failed to do for decades — find cheaper and cleaner replacements for fossil fuels. This approach to energy guarantees only one thing: Gasoline will be more expensive, and so will any new alternative.

Ben Lieberman of The Heritage Foundation explains it this way, “These tax measures would reduce domestic supplies of oil and gas. Increased imports, rather than increased alternatives, would fill the void.”

Maybe that’s why Congress is going to send everyone a nice fat check — to pay the higher prices? Not just higher fuel prices, but food, too.

The media are now “discovering” that last year’s energy bill — mostly an ethanol subsidy bill — is sending the cost of food through the kitchen ceiling, all around the world. USA Today reports it’s the higher energy prices (which Congress is making worse), plus that, “In a bid to reduce oil dependence, many countries are requiring additional use of biofuels, such as ethanol and biodiesel. That, in turn, competes with food destined for the table — and increases the prices of what consumers eat.” Reports from The Associated Press agree. Ethanol and biofuel mandates are raising energy prices and reducing the world food supply. Americans won’t starve, but journalists are realizing that the era of cheap food is over.

The era of expensive food, however, is just beginning. In December, the U.S. Congress dictated that the ethanol/biofuels subsidies which already destroyed cheap food will now be increased fivefold, and President Bush signed the bill. On top of that, another crop of “regular” farm subsidies is pending. So the same Congress that plans to punish oil companies who are enjoying high energy prices simultaneously plans to increase farm subsidies to reward farmers who are enjoying high food prices.

Give Congress an “F” in logic and in humanities.

But at least they’re sending us checks — our own money — so we can afford the price hikes they’ve caused. They shouldn’t pretend that it’s an economic stimulus rather than an election stimulus, especially since the checks won’t arrive for several months. And won’t the stimulus of $150 billion be offset by economic drag of borrowing $150 billion so the checks will clear?  

As The Heritage Foundation’s Rea Hederman noted, “The federal government cannot just wish new purchasing power into existence. The government must borrow the funds for the rebates, which means either less money available for investment or an increase in the trade deficit.”

There’s also the problem that consumers may spend their rebates on goods made overseas — as so many of today’s consumer goods are. Shanghai may get a greater boost than Sioux Falls does!

The politicians who devised this plan flunk everything else, but they deserve an “A+” in political science. Handing out money is a time-proven vote-getter, and this is an election year.

It would have been quicker if Congress had just directed employers to withhold less and put more in everyone’s take-home pay with a permanent tax cut, not a one-time gimmick. A permanent reduction would work immediately — just post the new tax withholding tables on the Internet for payroll departments to download instantly. And then we’d know that only taxpayers get refunds, instead of sending billions in “rebates” to known tax cheaters as is happening now.

But at least Congress can put a nice cheery note in the envelope with the checks, like a get-well card for the economy?
 
Or maybe they should just include a campaign brochure.


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