Those left-leaning environmentalist types are a sneaky bunch.  Complaining about the current state of the economy while pushing legislation to stop it in its tracks.

First, the good news: (link no longer active) the U.S. economy grew more than expected in the first quarter, beating analysts expectations. We can all rejoice that it’s quite possible to avoid a recession, as defined by two consecutive quarters of negative growth.

While the Democrats continue to push any available news that the U.S. economy is in trouble and it’s the fault of the current administration, the GDP continues to grow, albeit slowly. Consumer spending is up modestly and we’re simply not in a recession as many in the liberal news media would have you believe. Speaking of news media, Fox News - the most hated news network in the liberal blogosphere, just achieved it’s 77th consecutive month at #1.  That tells me that a large group of Americans don’t agree with liberals on their choice for news.

What the Democrats, and some Republicans, won’t tell you (and I’m looking at you Obama, Clinton and McCain), is that the proposed Lieberman-Warner bill will absolutely crush the economy.  There seems to be a rush to have this bill enacted into law before the end of President Bush’s term in office.  My guess is that once the economic collapse does come, it can be blamed on the current administration.  Funny how the Democrat-controlled Congress doesn’t take the blame for the slowdown in the economy.  It seemed to be doing just fine until they gained majority power in 2006.  Anyway, I digress.

The understanding of economic principles from the left leaves something to be desired.  While I don’t agree with the current administration’s policy of increased spending while slashing income, capital gains and estate taxes, President Bush gets it half right:  cutting taxes.  This is precisely one-half more than his potential successors.  All three (well, two, to be fair to Senators McCain and Obama) have proposed initiatives to cut carbon emissions in the U.S. by a factor of 60%-80% by 2050.  While ideas of carbon taxes and cap-and-trade systems abound, neither provide a solution, as Alan Caruba recently put it, to a problem that doesn’t exist.  While I fully expect Barack Obama to increase government spending and implement some sort of national emissions controls - a double-whammy, McCain’s direction is to definitely increase the price of goods through legislated greenhouse gas limits but his administration’s spending habits are yet to be seen.  Regardless of the winner of the election, the economic output of the United States will be severely disturbed.

Two of the basic principles of a thriving economy is consumer confidence and consumer spending.  While consumer confidence is currently hurting, consumer spending grew slightly during the first quarter.  To spend, however, people need money to spend.  Either wages must increase, taxes lowered or the price of goods dropped to provide the additional capital to citizens.  Under the plans proposed by both Senators McCain and Obama, the likelihood of any of these scenarios happening is grave.  A carbon tax on corporations and individuals to limit the amount of greenhouse gas emissions permitted in the United States will force both to cut back on spending.  A corporation may choose to limit expansion, limit new jobs, increase the price of goods to compensate for the additional cost of carbon controls or even eliminate positions in a worst-case scenario.  Individuals having to pay for this global warming tax will just cut back on spending elsewhere to make up the difference.  The net gain in consumer spending at best is zero; at worst, we’ll achieve negative consumer spending, which could result in a floundering economy.  What a Democrat-controlled government doesn’t understand is that money needs to be made available to individuals if the economy is to grow.  While these carbon taxes and cap-and-trade systems may be presented as revenue-neutral, it’s not neutral to you specifically.  The money can be given back as the government sees fit and it won’t be equal, I can promise you.  Cap-and-trade systems are just as bad as carbon taxes, except rather than make individuals and corporations pay for their carbon-emitting sins, there is a government-mandated limit on greenhouse gas emissions.  Different solution, same problem:  companies are forced to either buy technology to retrofit existing systems to reduce the amount of carbon dioxide emitted or buy carbon credits to stay within their carbon budget.  Either way, there is an additional expense that will be passed down to consumers in the form of higher prices.

Just think about all of this as you head to the ballot box in November.  And remember it four years from now.  Government-backed global warming initiatives aren’t good for the economy.

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Tags: Economy, carbon emissions, gas, global warming, tax

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