McCain's economics

McCain proposes break in gas taxes
By LIZ SIDOTI, Associated Press Writer
15 Apr 2008
PITTSBURGH - John McCain called Tuesday for the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, proposals aimed at stemming the public's pain now from the troubled economy.

One of my colleagues & I agree on very little when it comes to politics & policy. One of the exceptions is our shared belief that high gas prices promote conservation. If you want folks to burn less fossil fuel, make it expensive. If you want to incentivize alternative energy, make gas expensive.

Cutting the gas tax is a politically expedient proposal - with bad long-term effects. Not only does it encourage burning more gas, but it also cuts govt revenue at a time we are experiencing record deficits. The short-term effects will be painful... but it might help U.S. automakers decide to make fewer gas-guzzlers and more energy-efficient vehicles - a good thing in the long run. (As my colleague points out, high gas prices are likely to be more effective than more stringent CAFE standards in promoting energy-efficient vehicles.)

McCain seems to have exactly one economic idea: cut taxes.