Mirages

Robert Samuelson points out that Obama’s promises are mirages.

Since the dawn of the Industrial Age, this has been simple: produce more with less. (“Productivity,” in economic jargon.) Mass markets developed for clothes, cars, computers and much more because declining costs expanded production. Living standards rose. By contrast, the logic of the “post-material economy” is just the opposite: spend more and get less.

Consider global warming. The centerpiece of Obama’s agenda is a “cap-and-trade” program. This would be, in effect, a tax on fossil fuels (oil, coal, natural gas). The idea is to raise their prices so that households and businesses use less or switch to costlier “alternative” energy sources such as solar. In general, we would spend more on energy and get less of it.

Basing public policy on “Then a miracle happens” is not a good idea. Trading real rewards and economic growth for paying more for less is more than just bad policy. It is economic suicide. At some point, not far in the future, the real bill for all this feel-good policy will come due. When it does astronomical taxes will become a crushing reality.

This is going to be a rough ride, folks.

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