If you don't support a gas tax holiday as the solution to high energy costs and economic woes then you're "out of touch" with ordinary working people, Hillary Clinton and John McCain recently claimed.
If being "in touch" to millionaire politicians means spreading delusions about gas tax "holidays" and forgetting things like the law of supply and demand, the statement itself suggests that they might be out of touch. McCain has admitted to not understanding economics, but what's Clinton's excuse?
According to recent media reports, economists are blasting the gas tax holiday as likely to accomplish the exact opposite of what its proponents claim it would do.
For example, Eric Toder, an economic analyst at the Urban-Brookings Tax Policy Center in Washington was quoted in a Reuters article recently as saying, "You are just going to push up the price of gas by almost the size of the tax cut."
It turns out that if the price of gas is reduced by eliminating the 18-cent gas tax, then increased demand will force the price back up almost the whole 18 cents, say economists in an almost universal chorus.
Additionally, neither Clinton nor McCain, who are the most vocal supporters of the gas tax holiday, have linked the idea to any new policy that could be implemented quickly that offsets the new demand for gasoline it would create. In pandering to the populace, they have also failed to address the international price of oil or to make a new push to find sustainable energy alternatives.
While Clinton distinguishes herself from McCain by touting a gasoline price-gouging bill, which Obama also favors, that idea would not be enacted until 2009 at the very earliest. Thus billions in lost revenue for highway repair and reconstruction, added national debt, and heightened demand for gas this summer will not reap American voters any benefit.
Oh wait; there is the savings we are supposed to get during the gas tax holiday. According to an online calculator at Jabberwonk.com the savings for most gasoline consumers will be minimal. A gas tax holiday would literally amount to a handful of dollars over the entire summer: a gallon of milk, a carton of eggs, a pound of hamburger, and maybe a loaf of bread. That's about it.
But remember, there would only be any savings in the most optimistic and unrealistic predictions where new demand caused by the gas tax holiday doesn't push up the price.
"It would last for three months and it would save you on average half a tank of gas, $25 to $30," Obama told a large crowd in Wilmington, North Carolina earlier in the week. In a new television commercial, Obama called for a new comprehensive energy policy that includes a $1,000 "middle class" tax cut to offset rising prices, raise fuel economy standards, in make investments in alternative energy solutions.
By challenging the Clinton-McCain conventional wisdom on the gas tax holiday, Barack Obama proved he is far more in touch than either Clinton or McCain with working Americans who use gas. He also staked a claim that he is more willing to make a fight for real policy changes with substantive results.
Instead of pandering, we need national leaders who are going to fight for real energy alternatives to petroleum, refuse to vote for wars designed to make oil more expensive, and promote real investment in infrastructure reconstruction.
