Cap and Trade: A New Disaster Waiting to Happen in 2009
by Terry Easton (more by this author)
Posted 04/14/2009 ET

Heard of so-called "global warming"? It's been shown to be another socialist scam to create massive government controls over a "crisis" which doesn't exist. But, as Rom Emanuel, President Obama's closest advisor has said, good socialists "never let a serious crisis go to waste." Especially if its imaginary.

Want the facts on global warming? Almost 900 scientists and experts from dozens of countries recently met for the 2009 International Conference on Climate Change in New York. Their consensus -- based on reams of detailed surface and satellite-orbiting sensors, and ice core samples, is that the earth is actually cooling, and it's caused by the sun's unexplainable recent reduction in output energy. See: Heartland for dozens of papers, keynote addresses, videos, PDF's and data results.

No problem. "Cap and Trade" is not really about so-called global warming. It's really designed to secretly extract $2 trillion per year in hidden "consumption taxes" to pay for the bloated pork, earmarks, "stimulus" and "bailout" programs that the US government has recently created to pay off their Wall Street cronies and lobbyists.

Here is what the US version of "Cap and Trade" is all about:

It's a program which will apply a tax on all release into the atmosphere of carbon (in the form of carbon dioxide) that a person generates, beginning with you personally exhaling.
Never mind the fact that carbon dioxide is a trace gas which accounts for 0.0385% (you got that right, it's 385 parts per million) of the atmosphere, and is a plant food! Never mind that carbon dioxide in the atmosphere can't increase much beyond it's present level given the fact that above a certain level, the atmosphere cannot chemically absorb any more CO 2 and the rest falls back onto the surface of the earth to be absorbed by the oceans or by new plant growth (more food) and tree cover (more forests). Never mind the fact that the world's forest and plant coverage is up by over 20% the past few decades (fewer people to starve and to build wood houses). Never mind that carbon dioxide increase in levels trails by 750 years behind the warming of the earth. (They re-ran the ice core data using newer more accurate and detailed analysis techniques. Opps, there goes another of Al Gore's false global-warming slides out the window).

The new "Cap and Trade" tax - at the federal level - is actually a "consumption tax" on:

1) your breathing (no joke!) - an estimated charge based on the average person's body weight and added to annual income tax.

2) physical things that you purchase (all involve the release of carbon) including: clothes, books, magazines, computers, automobiles, DVD's, medicines, etc. To be applied to the manufacturers of these items who will then pass along the additional carbon taxes to the consumer (you) as an increase in the selling price of the product. Since all manufacturers and importers will be affected, the tax will be passed along by all of them as across-the-board price increases. Be sure to add this new tax on top of the increase in liquor and cigarette taxes now being implemented. And while we're at it, be sure to tax the tax by adding state sales taxes on top of your total purchases. If you're a socialist government, taxes are good. Right?

3) Food products that you eat. To be applied to the farmers of all food items who will then pass along the additional carbon taxes to the consumers as increased food prices. Meat products such as beef and pork, chicken, milk, cheese, butter and yogurt will be taxed at a much higher rate than low-carbon-consuming foods such as tofu, spinach, lima beans, etc.

4) Services that you consume. To be applied to all suppliers of services such as cinemas, newspapers, TV & radio stations, telephone, cable, satellite and internet companies, database providers, restaurants, fast-food outlets, dry cleaners, real estate agents, airlines, travel agencies, hotels, gardeners, doctors, attorneys, accountants, water and trash companies, local and state -- and federal -- government agencies. These hidden taxes will be passed along to the end consumer as increased charges in services and fees.

5) Energy that you consume. To be applied to all energy supplies that you consume. Honesty will prevail here. This will be listed as a direct tax on your bill. Includes: gasoline, natural gas, heating oil, electricity consumed by you personally or by machinery that you operate or businesses that you own or control. Look for gasoline to jump back above $3-4 per gallon -- or more.

Estimated costs: In excess of $2 trillion/year to be paid for by 300 million American consumers. That's roughly $6,600 for every American - including babies, and older people in retirement homes. Or, for the 50% of households who actually still pay taxes, that's about $38,000 in new taxes per year. Creation of a new federal government mega-agency requiring 50,000 new government employees with enforcement and arrest powers will be required, along with 350 new government offices with surveillance capability.
This new super agency will be needed to manage the new "excess energy consumption" supertax and it's denial-of-access powers for the piggish home consumers.

For example, the installation - as currently mandated by some states -- of new electronic controls of all residential electrical meters with remote control by the power companies and the State Energy Government grid agency will be able to remotely monitor your personal electricity consumption on a minute-by-minute basis and charge rates accordingly. Look for the new federal law to require all power companies throughout the United States to plug in their newly-installed home monitors to a massive new Washington, DC-based consumer and business "Federal Emergency Power Control Center".

Excessive consumption (as defined by the bureaucrats) will be supertaxed or alternatively your house electricity controller which will replace the electric meter can be instructed to remotely turn off the entire house power or kill the power to selected devices such as air conditioners, electric heaters, lighting, pumps, etc.

The automobile industry will be instructed to install mandatory GPS systems in all newly manufactured cars to supplement the "black box" monitor which has already been hidden under the driver's seat for the past 15 years. This box currently records up to 48 hours of car data - accessible by the police when an accident occurs - to store speed, breaking, direction, acceleration and other vital data as a person drives, including (in some models) interior audio conversations. Did you know your own car already has one of these?
The new GPS system will enable the Federal Government to real-time track all vehicles at all times, and to compute "excessive traveling" by "chronic travelers" and directly bill the registered vehicle owner via a new federal surtax on his annual state DMV car renewal tax.

Expect this bill to be introduced in Congress this year. It's being pushed by President Obama who last week stated it was his highest priority to pass such legislation before the end of 2009. (JDT note: The first bill is now in Committee. Here is what Wall Street Journal reports as of April 16, 2009.)

This bill is a simple massive tax increase (mostly hidden), buried in purchase costs of items you consume. This false legislation will become law because the Federal Government is near bankrupt and needs this new tax - introduced under the guise of "protecting the global environment" - to pay it's bills.

Note that the calculated so-called "benefit" in the reduction of carbon dioxide (there goes the food supply) created by the reduction in consumption that this tax will "encourage" when fully implemented - will be made completely worthless by just 6 months of increased Chinese growth in energy consumption during the year 2009 alone.

The Chinese are now building 2 new dirty coal-fired electric power plants per week, and are now producing over 1 million automobiles per month - while the US sales of our ultra-clean automobiles has collapsed to roughly 800,000 per month.

Economists estimate that the introduction of President Obama's "Cap and Trade" law will increase the US unemployment rate by 1% -1.5%. Estimates for people out of work in the USA for 2010 will rise to over 12%, and growing.

My personal estimate is that we could see unemployment rise to between 15% to 20% (Depression-era figures) by 2011 caused by all the massive bone-headed socialist spendthrift legislation now being introduced by the Federal Government, this legislation included. Cap-and-Trade is the true socialist's dream as it addresses a non-existent problem with a massive series of new hidden taxes and a massive increase in federal government bureaucrats and police with monitoring and control powers to use against the citizens of the United States.

Of course, "I'm just saying", as Glenn Beck likes to say "I could be wrong". Maybe "Cap and Trade" won't pass a responsible Democrat-dominated Congress in 2009. Hmmm.

Mr. Easton teaches University economics and is passionate about technology and entrepreneurship. He is rosy about the long-term future: "The glass isn't half full, it's overflowing!"