By Nick Loris
Intergenerational theft. A complicated phrase that can simply be described as borrow money now, force our children and grandchildren to pay later. We’ve heard it with Social Security, Medicare and, most recently, with the massive stimulus spending bill.
We can now add cap and trade to the list. The Heritage Foundation’s Center for Data Analysis found that the Waxman-Markey bill would increase inflation-adjusted federal debt by 26 percent.
Over the 2012-2035 timeline, the negative economic impacts accumulate, and the national debt is no exception. This is 26 percent increase is above what it would be without the legislation and represents an additional $28,800 per person, or more than $ $114,915 for a family of four. To reiterate, these burdens come after adjusting for inflation and are in addition to the $450,000 per family of federal debt that will accrue over this period even without cap and trade.
Reducing the debt burden our children will incur is a concern for many policymakers but the same policymakers are largely the problem. Economist Michael Munger says,
Keynes said that Y=C+I+G. Borrowing money to raise “G” (government spending) will work, I suppose. But the cost to future generations is enormous. I am amazed by the hypocrisy of both sides. John McCain calls the stimulus “intergenerational theft.” Well, he’s right, but he came late to this wisdom. The Republicans have been just pouring out new deficit spending since 2002.
And then Obama says he doesn’t want to do tired old ideas, and failed economics. But he is doing exactly what the Republicans did: huge deficit-financed spending on largely useless or irrelevant programs designed to reward political friends. The only thing that’s different is the identity of the “friends.”
So, some of the spending may increase measured GDP slightly for 2009. But the price is increased inflationary pressures in 2010, and the squandering of the birthright of our children for decades.”
President Obama recently admitted our country’s debt load is unsustainable, saying, “We can’t keep on just borrowing from China. We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Proponents of cap and trade and any other global warming legislation are quick to argue that Americans’ short-sightedness is superseding the preservation of the planet for future generations. (It’s the same short-sightedness that causes Americans not to worry about intergenerational theft.)
We’re doing it for our children. In fact, the ostensible idealism behind curbing global warming is causing policymakers to ignore the exorbitantly high costs. But if we’re saving the planet for future generations, the benefits must clearly outweigh those costs, right?
Not right. Cap and trade would reduce global temperatures by a fraction of a degree.
Cap and trade does more than mortgaging our children’s future. It’s condemning our children to a life less prosperous than ours. This debt reduces the rate of growth in potential economic output, thus putting future generations on a lower plane of economic well being than ours. (Interestingly, it’s the oil industry that can cure our high energy price and budget deficit worries through expanded production.)
Cap and trade will regress the United States to a lower standard of living so we can (maybe) reduce atmospheric carbon content by an almost immeasurably small amount.
The reality is a slower pace of economic growth is the desired outcome. Capping carbon artificially pushes up the price of fossil fuels – our cheapest and most reliable source of energy. But just about everything we produce and do uses energy – some things much more than others. When faced with higher energy costs, businesses must make difficult decisions: leave the lights on or cut jobs. Typically to stay in business, they’ll choose the latter. Smaller businesses won’t be so lucky and will have to shut down.
If we want a preview of what will happen under Waxman-Markey, take a look at today’s economy. Production and consumption are down, unemployment is up and, as a result, we’re using less energy and emitting less carbon. Waxman-Markey will only be worse, with an estimated 1.1 million jobs lost on average and $9.4 trillion in lost gross domestic product over 2012-2035.
A cap and trade plan is doing nothing but increasing that monthly payment for our children. By a lot. In an attempt to protect our children’s future, we’re doing just the opposite – all for a temperature change they’ll never notice in the first place. And in addition to more debt, we’re leaving them with a world with lower income, higher unemployment and higher energy costs.
In truth, the only thing we’re protecting our children from is a better life.
Read more informative articles at Heritage – The Foundry