Undeniable Economic Truths and Waxman/Markley

The “cap” in B. Hussein Obama's Mandate, Cap, and Tax scheme is a cap on American economic growth.

The fact is that burning carbon-laden fuel sources feeds our economy. It is the very lifeblood of the American way of life. It is the lifeblood, capital is the food, transportation is the circulatory system, the free market is the brain, and labor is the hands and feet.

You can rail against carbon-based energy, spit on it, regret it, curse it -- it still remains a fact. It is also a fact that the same eco-Orwellians opposed to carbon-based energy also march on down the street to the No Nukes protest. Later, a fair number of them bust out the windows as the Starbucks and McDonalds to protest "globalism." What they oppose is human achievement and success. But I digress (only a little).

The Obama/Waxman/Markey Mandate, Cap, and Tax scheme will destroy our economy, and a reasonable understanding of economic truths will bear out my analysis.

The first undeniable economic truth is if you want to have less of something, tax it. Cap and tax will cause energy production will drop, because energy production in this country is primarily carbon-based. If you liked the “energy crises” of the 1970s, you will love Cap and Tax. Welcome back, Carter! Let’s keep an eye on the misery index.

The second undeniable economic truth is that corporations do not pay taxes – people do. To corporations, a tax is merely a cost to be passed along to its consumers. Want proof? Look at your phone bill or cable bill. They don’t even bury the various taxes in their rates; they just add tax line items. The full cost of these carbon “credits” will be passed on to consumers. The average family will see their power and natural gas bills skyrocket (between 45 to 90%, depending on the production mix in your area). Add to that the 70% or so increase in cost for your gas or diesel fuel. American families start losing real money to an ever-growing federal government far faster than their wages will ever match. Domestic consumption will sink like a stone.

Which leads me to my first undeniable law of government; government lies to you. There is not going to be an carbon tax rebate to consumers, in the same way there is not going to be a payback of the recent automobile industry “loans” or a return on the bank rescue “investments” made on the behalf of taxpayers. The LAST thing this government wants to do is put money back in the hands of taxpaying consumers because we are too stupid to spend it correctly.

The third undeniable economic truth is that increases in basic costs compound down the supply chain. Put another way, not only will your power bill increase, but so will everything else you buy, because the costs to the producers of everything else you buy are going up, and those costs will be passed on to you, the consumer. This is the indirect taxation effect, and

The fourth undeniable economic truth is that the more money the federal government takes from the economy, the less capital exists to fund jobs. The Cap and Tax will deprive consumers of disposable income, causing massive decline in demand (and job losses related to) in the manufacturing and luxury services sectors, particularly durable goods. Declines in demand for durable goods ripples through the markets for basic materials, mining, milling, and transportation. Conservatively speaking, our Gross Domestic Production (GDP) will drop between 13-19%. Unemployment skyrockets, and hello, Great Depression II.

The dramatic costs increases (both direct and indirect) will lower the standard of living for every American. Let that sink in. The Tax and Cap Plan will lower our standard of living. In what Alice Goes to Wonderland world is Congress living in when they intentionally hobble the economy and lower our standard of living even more than the $1,900,000,000,000,000.00 budget deficit they just hung on the nation?

Those are the costs of the federal government plan. What are the benefits? Even if you fully accepting the argument that CO2 emissions related to energy product contribute to “global warming”, the best tree-hugger estimated net result would be a difference of less than 0.01°C over the next century.

So, the Obama Waxman Markey Mandate, Cap, and Tax plan will cripple our economy, reduce our standard of living, put millions out of work, and cause a decades-long depression to change the air temperature less than a human can differentiate with his natural senses.

That is one horrible cost/benefit analysis, unless you wish to tear the United States asunder.