Economy Alarm: National Energy Tax Bankrupts Future Generations

May 18, 2009

National Energy Tax Bankrupts Future Generations
Despite Study, Dems Believe National Energy Tax Will “Revitalize” the Economy

Democrats Claim National Energy Tax Will “Revitalize Our Economy”

“[Rep] Waxman argued that pitting economic growth against clean energy ‘is a false choice’ used by Republicans to scuttle climate legislation. The redirection of the nation’s energy policies ‘will revitalize our economy,’ create clean energy jobs, reduce U.S. dependency on foreign oil and address climate change, he maintained.” (Associated Press, “Democratic support for climate bill broadens,” 05/18/2009)

Credibility Crash: Study Shows National Energy Tax Would Wreak Havoc on Nation’s Economy

“Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) modified their global warming proposal from the draft version published on March 31. For the most part, the changes focused on the distribution of the allowance revenue–the equivalent of tax revenue…

“The economic impact of the new draft varies from that of the original draft in several major ways:

•    Compared to no cap and trade, real GDP losses increase an additional $2 trillion, from $7.4 trillion under the original draft to $9.6 trillion under the new draft;
•    Compared to no cap and trade, average unemployment increases an additional 261,000 jobs, from 844,000 lost jobs under the original draft to 1,105,000 lost jobs under the new draft; and
•    Peak-year unemployment losses rise by 500,000 jobs, from 2 million under the original draft to 2.5 million under the new draft…

“Ultimately, this bill would result in government-set caps on energy use that damage the economy and hobble growth–the very growth that supports investment and innovation. Analysis of the economic impact of Waxman-Markey projects that by 2035 the bill would:

•    Reduce aggregate gross domestic product (GDP) by $9.6 trillion;
•    Destroy 1,105,000 jobs on average, with peak years seeing unemployment rise by over 2,479,000 jobs;
•    Raise electricity rates 90 percent after adjusting for inflation;
•    Raise inflation-adjusted gasoline prices by 74 percent;
•    Raise residential natural gas prices by 55 percent;
•    Raise an average family’s annual energy bill by $1,500; and
•    Increase inflation-adjusted federal debt by 26 percent, or $29,150 additional federal debt per person, again after adjusting for inflation…

“Is all of this economic pain justified by gains against global warming? Waxman-Markey raises energy prices by 55-90 percent. These higher energy prices push unemployment up by 1,105,000 jobs on average, with peaks over 2,479,000. In aggregate, GDP drops by over $9.6 trillion. The next generation will inherit a federal debt pumped up by $29,150 per person…” (“Son of Waxman-Markey: More Politics Makes for a More Costly Bill,” Heritage Foundation, 05/18/2009)

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