On April 15th, according to this article, John McCain called for a gas tax holiday, explained below:
To help people weather the downturn [in the economy] immediately, McCain urged Congress to institute a “gas-tax holiday” by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. By some estimates, the government would lose about $10 billion in revenue. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.
This is pretty much the worst idea I have heard in the entire presidential race. For example, it would be a better idea to elect Ron Paul and eliminate the IRS. Lets examine the economics. First let us ignore the possibly dubious (to crazy right wing pudits) idea that high oil prices driving alternative energy research is a good thing, and assume that we want low oil prices. In this scenario it is still a bad idea.
I for one would much prefer to be able to drive on a highway in 10 years and spend more on gas, than not be able to drive on a highway in 10 years cause they don’t exist/are horrible roads. Of course, maybe, just maybe, McCain’s goal is to destroy our highway infrastructure in the long run — forcing us to use less gasoline cause we can’t drive anywhere. Somehow I doubt this. Of course, the analysis when you consider that in the long run we don’t want to burn oil to move people and goods is much stronger. However, I think that any fiscal conservative could be swayed by the argument presented here.
Now, the Strategic Petroleum Reserve itself; that is a good idea. Oil is important and set to increase in value over the long run, so buying oil now and putting it in storage is a great investment. Now, I always think, in the very long term, that all that stored oil is going to be super useful in 2100 when we want to fly around military jet fighters to protect ourselves. You know, because the world is pretty much out of oil (allow me some fudge room on that date will ya). Sadly, that is not the goal of the reserve. The goal of the reserve is to mitigate future temporary supply disruptions. Given that goal, this is a debatable step that should be discussed. Effectively, not filling the reserve indicates that we:
- Do not expect supply disruptions of the kind that would exhaust the reserve.
- Expect the price of oil to drop over the next few years.
Well, if Iraq ever becomes an exporter again, the price will be sure to drop, but other than that I doubt it. Although, it is getting to the point where you’d think it must come down. If we don’t invade Iran or anyone else, and prices remain high, I don’t see how the producers could afford a disruption. So there on one count, maybe the on the other — so its a question of motivation really. And at this point the argument relies on the idea that we should free ourselves from oil — both foreign and domestic. So I’ll just leave it at that.