Wednesday Quick Hit

The cap and trade system that President Obama is proposing has been estimated to cost anywhere from $700 Billion to over $2 Trillion over ten years. Let's take a look at the goals of the program, and see if the benefits outweigh the costs.

When we consider our current energy issues, there are two ideologies at conflict today. The Liberal position is to punish carbon producing businesses to force them to change their ways. By his own admissions, President Obama's plan would place such high cap and trade costs in place that building any new coal plants would prove economically impossible, and the price of existing coal-produced electricity would skyrocket. The Conservative position is to make the alternative green technology so attractive that people want to switch. There is a small but important distinction between the two: one is a negative approach that punishes industry and consumers, and the other is a positive approach that inspires change by rewarding idustry and consumers. And ironically, it isn't President Obama who is inspiring change.

Here would be my solution:
Open up drilling off the coast of California.
Open up drilling in the Gulf coast.
Open up drilling in Alaska.
Open up mining oil shale in Colorado and Wyoming.
And double our oil refining capabilities.

Here are the benefits to this solution:

1. It doesn't cost the American Taxpayer a dime. With oil companies experiencing record profits, that income can be directed to expand their business rather than just sit in their coffers.
2. It would create tens of thousands of jobs. People need to build and work the new drilling platforms and refineries. With more oil being moved around, more truck drivers will be required, as will more train operators.
3. It would generate new taxable income, at both the corporate and private level. In California this would be especially beneficial.
4. It would relieve the American people of their dependence on foreign oil. Strategically that makes us about 100% safer, as we would now provide for our own energy consumption.
5. It would kill the price of gasoline. That would be the equivalent of another Stimulus package, only this one wouldn't be financed by our children. And the lower price allows us to do one very important thing: raise taxes on every gallon of gas sold. Nothing lavish, say 20 cents per gallon. That money could be directed toward building new wind mills, financing electric/solar cars, rebuilding our power grid, or even water desalination of ocean water for the coast.

The point is this: the President's goal is the same as my goal, to move us off an industry that produces carbon, to create jobs (and thus new taxable income), and to make the U.S. safer. The difference is that while the President's plan raises taxes on us and our employers, spending all our kid's money, and hoping to force our move to 'greener' pastures by punishing our way of life, my solution creates jobs, creates new taxes, creates wealth, saves consumers money, and achieves the same end. His solution is all about the negative, mine is about the positive. His is consumed by destroying wealth, mine creates wealth.

The reality is we need money to move to new technologies. Money that cannot be created by taking it from the very companies we need to make the change, or the very consumers we want to buy the new and more expensive cars. My solution would create that wealth we need to make the move, and all with LESS government involvement.