Summer is nearing, and like clockwork, the media can't seem to go five minutes without talking about the extreme pain inflicted on consumers by higher gas prices. Shrill comments about how Bush should "do something" are a mainstay of any coverage. Recently, the candidates joined the fray.
Obama has come out strong against the gas tax holiday that is being touted by the other candidates, McCain and Clinton. He claims that the tax cut will only represent a meager savings of about 25 dollars a month, and in exchange cost over 300,000 jobs and a higher deficit. The media, in an effort to have something positive to say about their wunderkind, have fallen all over themselves agreeing that Obama is basically correct; sort of like the way a pre-school teacher encourages young pupils who have created Rorschach-like crayon art.
While there is some truth to what Obama is saying, he is wrong for condemning the gas tax holiday. Moreover, although Obama would never admit it in one of his inspirational speeches, the very platforms he supports have increased the cost of gas to Americans. If we really want to reduce the cost of gas, here are five ways to do it.
1) "Not much" is better than "nothing" - Obama is right that the average American wouldn't save much with a gas tax holiday. But they would save something. That's the point. There isn't much the government can do to lower the price of gas in the US quickly, considering global demand (where, in some parts of the world, gas prices make U.S. prices look cheap by comparison), lack of refineries, and price runs by the energy trading sector. The first and most immediate impact we can have on gas prices is to suspend the gas tax. No, 300,000 people won't lose their jobs, but yes, it will mean a slight increase in the government's budget deficit. In the current economic environment, this is a tradeoff we can and should make.
2) Say NO to more taxes on oil companies - Funny thing about windfall profit taxes on oil companies. Like all businesses, oil companies simply pass the cost of doing business onto the customer. You are the customer. When our politicians talk about increasing taxes on oil companies, this will mean an increase in the prices we pay for gas. Politicians don't like to admit this, but it's true.