Forgive me my rant. But more and more I feel like the stupid American voters have exactly the government they deserve- the dumbest on Earth. This whole gas tax holiday has got me enraged. There is not one economist or public policy person who will go on record and say it is a good thing. For one simple reason- IT ISN'T!!!! What part of supply and demand does the average voter in this country not understand?
Hillary is out there saying how it will save consumers $8 billion dollars. WRONG! First of all, her windfalls profits tax has about as much chance of enactment as I do of winning American Idol. And, even it was passed, the tax would actually be borne mainly, if not wholly, by consumers.
Let me say this one more time- the demand for gas is inelastic in the short run and medium run. Maybe in the long term one might see some elasticity as people opted for smaller cars and public transportation. Maybe. We also have this tiny little supply problem. Now, class, tell me what happens to prices when the demand curve shifts and the supply curve stays the same? This is Econ101. The market clearing price (ie, the equilibrium price) goes UP. Not down.
Anyone with more than two brain cells to rub together understands that the gas tax holiday would likely result in HIGHER prices at the pump. And huge windfalls for the oil industry. Now, call me crazy but I thought Hillary was running on the Democratic ticket. But more and more, she seems to be pulling a Lieberman.
And honestly I am at the point of saying to the American people- "Fuck you. you're getting the government you deserve."