In an attempt to win primary votes Hillary has joined McCain in calling for a hiatus of the .184 federal gas tax from Memorial Day to Labor Day. Clinton says "Record oil prices are contributing to higher energy prices, food prices and a squeeze that is making many middle-class families feel like they are falling further behind... Suspending the gas tax will provide real, immediate assistance to American families and for our economy." This followed McCain's comments early this month that "The effect will be an immediate economic stimulus - taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up".
If my memory of Econ101 is correct. A drop in gas prices will result in higher demand (especially this time of year) and the price will spring right back up to where it dropped from meaning that the govt might not get the .184 but big oil will! (I don't get it "they" claim we can't cease our filling of US "reserves" (that are 97% full) because the result would only be a fastly adjusted blip and not worth it in the long run. Is this not glaringly similar?)
Ok, yes in the short run drivers may save some $ when they fill up (an average of $1 for every 100 miles which is roughly $2.30 every time you fill your tank) but that will not change the price of groceries or make you suddenly be able to road trip it out West and in order to bring drivers that substantial savings the federal goverment will have to find a way to cover a $10 billion budget gap. (a gap McCain says borrow or let be and Clinton says big oil will pay...yeah right!) A budget gap that could lead to job losses on state construction and highway projects. Are you willing to give up your neighbors job to save a penny a mile?
In other words this "gas stimulus" (that even Bush doesnt support, heck maybe that means it is a good idea?) would be another bandaid and one that likely comes with a BIG cost down the road.
What's your opinion?