Waxman / Markey - lots of Government control, lots of new taxes, much loss of liberty - Granite Grok

Waxman / Markey – lots of Government control, lots of new taxes, much loss of liberty

Congressmen Henry Waxman (D-CA) & Ed Markey (D-MA), under the guise of saving the planet, are about to unleash the most sweeping curtailing of our liberties and thinning out of our wallets by taxes ever seen in the history of the US.  Instituting these enviros-socialist’s version of a "cap and trade" (or TAX AND PAY, as we discussed on the show with Senator George Lovejoy) of CO2 emissions will cause a such artificial distortion by Government of our energy supply and use, it will fundamentally change how we live and work as Americans.  Yes folks, in a land where individual freedom was the highest value, Obama’s Government is TRULY going to be in control of our lives.  As an technologically advanced society, we heavily depend on affordable energy.  Take that away and our our standard of living will see a disasterous decline. Individual choices will have been subsumed by Government "that knows better what’s better for us".  Or rather, what it thinks is far better for the collective "we".

Remember – WE are not addicted to oil!  Rather, we, as a technologically advanced society, REQUIRE energy – oil just happens to provide the most affordable, most "energy dense", and protable source of energy in the world.  Without it, we become just another Third World country.

Obama has already decided to foist massive tax increases on the oil companies (strike 1).  They, in turn, will pass the price increases onto us raising our cost of living (and thus, losing choices because of financial hardship).  He is also in the process of limiting the supply of our own oil and gas resources by making it all but impossible to drill more and use oil on American shores.  When the economy picks up (if it does), this artificial constraint by our own Government on supply will again cause prices to rise (strike 2).  He has also threatened to bankrupt the coal industry (strike 3).  Pre-emptive strike 4 is  Obama’s takeover of the automobile industry and his decree of raising the CAFE standards by 30% in 7 years (whereby landing more financial roundhouses to an already beleagured taxpayer car industry (Ford, not being under the thumb of Obama, may not survive) and the tiny cars that will result from it), he is all but dictating how and how far our freedom of movement will be allowed to be. What a pincer movement by Obama!

Back to the Waxman / Markey bill. As I pointed out here, Waxman hasn’t even read his own freakin’ bill.  Not only that, smarting from the derision hurled at our Federal legislators that they didn’t read the Porkulus bill, he decided that he would have the bill read – by a speed reader?  Can you spell A-R-R-O-G-A-N-C-E?  No one truly knows how much this is going to cost.  Why?  One of the most dreaded phrases in the political world is "Cost / Benefit ratio".  Common sense translation?  How much is this stinker going to cost, and IF it is going to make a positive difference, how much? One more translation: how much bang are we going to get for the buck?  Or is it a dud?  Or are we facing an implosion?

Face it folks, it is not sufficient to rely on "good intentions". Jim Manzi has done a first order take on the benefit for this cost – and it is UGLY for us ordinary citizens!  Just one of his assumptions should scare the living daylights out of you:

Fourth, it assumes that the rest of the world will begin similar carbon-reduction programs. Lack of such foreign action would either increase U.S. costs or risk a trade war if we tried to compensate for lack of international cooperation with targeted tariffs.

And India and China (the latter being the biggest polluter in the world) have already said they aren’t going to do ANYTHING to cap their emissions.  Can you say "knife brought to a gun fight?".  I’ve gone long here on the front page; more details after the jump.  Jim does present a horrific fact:

The costs would be more than ten times the benefits, even under extremely unrealistic assumptions of low costs and high benefits. More realistic assumptions would make for a comparison far less favorable to the bill.

So, you want to stick your grandkids with the bill?

More factoids from Jim’s analysis (reformatted by me):

  • According to the authoritative U.N. Intergovernmental Panel on Climate Change (IPCC), under a reasonable set of assumptions for global economic and population growth, the world should expect (Table SPM.3) to warm by about 2.8°C over the next century.
  • Also according to the IPCC (page 17), a global increase in temperature of 4°C should cause the world to lose about 3 percent of its economic output.
  • Because of its geographical position and mix of economic activities, the United States is expected (Table 3) to experience no net material economic costs from such warming through the end of this century, and to begin experiencing net costs only thereafter.
  • A government program to force emissions reductions to avoid some of these potential future losses would impose a cost of its own…It’s complicated to estimate the cost of an emissions-reduction program, but the leading economists in this area generally agree that it would be large, and that we should simply let most emissions happen, because it would be more expensive to avoid them than to accept the damage they would cause.

In other words, is Henry Waxman really wanting more Government control over our lives rather than actually solving a problem?  Given his other sponsorship of draconian incursions into our lives, the answer is "yes".

  • The expected benefits of emissions mitigation do not cover its expected costs. This is the root reason that proposals to mitigate emissions have such a hard time justifying themselves economically. (If interested, you can read much more about this here).
  • The Environmental Protection Agency (EPA) has done the first cost estimate for Waxman-Markey. It finds (page 17) that by 2020 Waxman-Markey would cause a typical U.S. household to consume about $160 less per year than it otherwise would, and about $1,100 less per year by 2050 (before any potential benefits from avoiding warming). That doesn’t sound like the end of the world, but this cost estimate is based on a number of assumptions that seem pretty unrealistic, to put it mildly.
    • First, it assumes that every dollar collected by selling the right to emit carbon dioxide will be returned to taxpayers through rebates or lowered taxes.

Side note:  These are politicians folks!  There is NO way that a politician will just lower taxes just because they have created a new revenue!  Doubt me?  Tell me one – examples will be far and few!

    • Second, it assumes no costs for enforcement and other compliance measures, which would be awfully nice.
    • Third, it assumes that large numbers of foreign offsets will be available for purchase; without these, costs would be far higher.
    • Fourth, it assumes that the rest of the world will begin similar carbon-reduction programs.
    • Fifth, it assumes that there will be no exemptions or other side deals — that is, no economic drag created by the kind of complexity that has attached to every large, long-term revenue-collection program in history. And so on.

 

  • Climatologist Chip Knappenberger has applied standard climate models to project that, under the scenario for global economic and population growth referenced above (A1B),
    • Waxman-Markey’s emissions reductions would have the net effect of lowering global temperatures by about 0.1°C by 2100.
    • A crude estimate of the U.S. economic costs that Waxman-Markey would avoid sometime later than 2100 would then be about one-fortieth of 3 percent, or about 0.08 percent of economic output. This number is one-tenth of 0.8 percent, the EPA’s estimate of consumption loss from Waxman-Markey by 2050.
    • To repeat: The costs would be more than ten times the benefits, even under extremely unrealistic assumptions of low costs and high benefits. More realistic assumptions would make for a comparison far less favorable to the bill.

I’ve had to rely on informal studies and back-of-envelope calculations to do this cost/benefit analysis. Why haven’t advocates and sponsors of the proposal done their own? Why are they urging Congress to make an incredible commitment of resources without even cursory analysis of the net economic consequences? The answer should be obvious: This is a terrible deal for American taxpayers.

Two Potential Objections

  • First, ascribing all of the benefits of a global deal to reduce emissions to a specific bill that does not create such a commitment on the part of any other countries is loading the dice. The benefit we should ascribe to the bill is rather that of an increase in the odds of such a global deal. But would Waxman-Markey actually increase them, or would it decrease them instead? Whenever one nation sacrifices economic growth in order to reduce emissions, the whole world can expect to benefit, because future temperature should decrease for the entire globe. Every nation’s incentive, therefore, is to free ride on everybody else.
  • A second and more serious potential objection to my analysis is that while Waxman-Markey may not create benefits if the projections I offered above turn out to be accurate, climate science is highly inexact, and the bill is an insurance policy against higher-than-expected costs...It is an emotionally appealing political position, as it easy to argue that we should reduce some consumption now to head off even a low-odds possibility of disaster.

In the end, clarity about costs and benefits is the enemy of Waxman-Markey. It is hard to get around the conclusion that it can not be justified rationally based on the avoidance of climate change damages.

I thought Government was supposed to protect our freedoms – is this Government the same as what our Founding Fathers thought government should do – limit us rather than empower us? 

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