Wednesday, April 22, 2009

So, Cap-N-Tax

Really does cost close to $4,000 per houshold on an annual basis. Or, if you live in the fantasy world in which taxes aren't really expenses, $800.

Unfortunately, only MIT Professors inhabit that fantasy world. For you and me, energy costs are going to skyrocket. Which is the point of the whole thing – raising the prices so high that you won't be able to heat your home will reduce your carbon footprint. Indeed, the $4,000 annual cost is likely to be a low ball estimate. The heavy hand of government regulation always contains large unintended costs. As well as an understatement of the intended costs.

The notion that the $3,128 in tax money coming out of your pocket isn't a net cost to the economy is a notion so stupid that only a macro economist could believe it. First of all, the money does come out of either the business or consumer, depriving them of goods and services they would otherwise have purchased. Secondly, the project swells the ranks of government bureaucrats, shifting productive resources from the private sector into unproductive use in the government. This reallocation of resources is far from costless. Third, government operations are nearly always less efficient than private ones.

The Obama plan is to have the government introduce artificial massive economic inefficiencies, raising the prices of just about everything, while promising that this will in turn make us all rich. Keep in mind that Obama is already on record extolling the virtues of making energy more expensive.

From the government's point of view, the added bonus is that you will become more dependent on handouts just to make ends meet. Keep in mind that if Obama is gracious enough to rebate your mandated extra energy costs, that kind of invalidates the scheme, doesn't it? After all, if he doesn't significantly raise the price of energy, you won't conserve. But you will be grateful for the pittance of a remittance he condescends to send back to you.

Which is likely the entire point.