Tuesday, August 5, 2008

Obama's 'Emergency Economic Plan' One Big Hoax

Excerpted from the Pittsburgh Tribune-Review:

Barack Obama says he would give consumers an emergency rebate of $1,000 to help them pay for gasoline -- paid for by taxing Big Oil's "windfall profits."

However, Donald J. Boudreaux, chairman of the department of economics at George Mason University, notes as follows:

"Total profits of U.S. oil companies in 2007 were about $90 billion. If Uncle Sam took all of these profits and distributed them equally to all households in the U.S., each household would get $750."

Mr. Boudreaux reminds that $90 billion represents all profits. Even if Obama claims half of those profits are "windfall," the noted economist says each household would receive $375. And even if Obama's plan excludes all households in the top half of income earners, there's still only enough for $750 for each remaining household, Boudreaux says.

That said, Boudreaux reminds that the Obama plan would subsidize gasoline consumption while more heavily taxing its production. "This plan -- which increases the demand for gasoline and reduces its supply -- makes as much sense as trying to put out a fire by dousing it with jet fuel."

But that matters not as long as a gullible public sucks up the populist pap that is Obamanomics. - Read in full.