John McCain Fails Econ 101
Senator John McCain has proposed that we have a gas tax holiday over the summer. By saving 18.4 cents per gallon, the Senator seems to think that it would help the economy. But let's look a little closer:
1. No federal excise tax on gasoline would encourage consumption, meaning more demand on gasoline. My Econ 101 prof (Walter Heller btw) told me when demand goes up, costs go up.
2. Since we don't produce a whole lot of oil in this country, then we would need to import more oil. Doesn't seem right to add more $$$ to places like Venezuela, Russia, Saudi Arabia, and Iran does it?
3. The federal excise tax on gas goes for things like roads and bridges. I seem to remember that we have a huge need to build and repair our roads and bridges. Plus it's people who build and repair roads and bridges, how will those JOBS be replaced?
We know Senator McCain has stated that he's not a great economics mind -- I guess he wasn't kidding. Me thinks this proposal has more to do with making a quick, popular-on-its-face statement and not a serious policy proposal. Can't wait for more "straight talk" from the Senator.
Don't believe me? Check out what this conservative economist blogger thinks.