Friday, May 02, 2008

McCain’s gas-price ‘solution’

Paul Krugman explains why John McCain’s gas-tax holiday is bullshit.
Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.
In other words, it’s Steal from the Poor and Give to the Rich, straight from the GOP playbook.

But the consumer ends up paying the same price, you say, so how is this stealing from the poor? Because this plan lowers the amount of money the federal government collects in taxes. That means the government has less money to spend. Which means spending cuts are inevitable. And which programs do you think Republicans look at first when the treasury comes up a little short? Things like Medicare, LIHEAP, housing aid for the disabled, student loan programs and environmental protection. These are all things that rich people don’t need, use or are too stupid to care about, and the Bush administration has proposed cuts to all of these programs.

Between McCain’s gas tax holiday and his proposed tax cut for healthcare spending, which also diverts money from the federal treasury to the pockets of private companies, one wonders how if McCain plans to address the deficit at all, and how he plans to fund any government spending. I guess in his view, people will be able to pay for a $12,000 health insurance policy with a $5,000 tax credit, and that people with pre-existing conditions will magically receive insurance, even though insurance companies refuse to cover them. I guess in his view, all those rotting roads and bridges around the country are going to repair themselves. I guess in his view all those people who can’t cover the skyrocketing cost of higher education will wash dishes for the rest of their lives, and somehow this makes us more competitive in the world market. I guess in his view it’s OK if people have to choose which prescription drugs to take and which to skip because they simply can’t afford the medicines they need. Maybe they should’ve been like him and had an admiral for a father and then become a senator so they too could be on government-funded healthcare their entire lives.

It’s not that he doesn’t care about these people and these issues. It’s just that he wants to be president so badly that he’s willing to sacrifice them and all of his principles to get it.

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