Punching Stupid and Evil in the Face Since 1986!

"We are on strike, we the men of the mind. We are on strike against self-immolation. We are on strike against the creed of unearned rewards and unrewarded duties."-John Galt

Wednesday, July 8, 2009

Real Math on Cap and Trade

There has been much discussion on Cap and Trade these days. Every source gives different estimates on the financial impact that will be felt by families; one thing that is not in dispute though, every family will feel the impact.

After a local business took a stand last week publicly thanking Russ Carnahan for essentially voting to drive them out of business, it became clear that we must leave no room for doubt what this bill would do to all small business in this country if this boondoggle is allowed to pass.

Even when considering conservative estimates, home energy prices will rise by an average of let's say $1,000 per year for my family of four. (I live in a state where much of our electric is generated by coal burning facilities.) In my family that is an increase of about $83.33 per month. Oh wait bye-bye Obama tax credit. And then some......

Then what about the cost of manufactured goods? I do buy various things that are manufactured to live my life. Even if those things increased by only an average of 10% per month, that then increases my monthly 'sundries' bill by about $20.00 per month. That's not devastating, but now my total costs just live-and not eat-has gone up by more than $100 per month.

Then there is the food. Unfortunately, my silly, greedy children and what's worse, my husband and myself, like to eat. For our average family of four our food bill increasing by 10% per month will add $66.00 per month to our living expenses.

So just for the family-I haven't even gotten to my small business-our cost of living just went up about $170 per month. Hmm, we could probably survive that OK-we should, after all, pay our fair share as a middle class family. It is up to us to sacrifice, right?

So now let's take a look at the income I bring in and what will happen to that.

I buy a lot of manufactured goods. A lot. My cost-of-goods sold ALONE on my last years tax return was in excess of $30,000. That is the amount I have paid for goods to resell to my clients. An increase of 10% adds $3,000 to money I pay out. What that actually means is I will sell less items. I will REDUCE the amount of goods I sell to my clients. So not only my costs will increase, but my revenues will decrease. My clients costs will go up too, so (in the words of Obama) they will "necessarily" buy less product.

Finally, we can take a look at my automobile gas bill. I drive an average of 250-300 miles per week-I am in a service business-so at $2.50 per gallon, right now my gas bill runs around $150 per week. With estimate on the increase of gas falling somewhere between .77 cents and $1.50 per gallon-an average of $1.14 per gallon increase- that will will raise my total automobile gas bill alone to more than $218.40 PER WEEK.

Because there is no way I can afford to continue to do business at my current rates and even turn a tiny profit with these increases, I would "necessarily" have to either increase my rates or go out of business. Although, it might not be up to me in the end. With the cost of so many other prices increasing for my clients, they may go out of business, which would put me out of business anyway.

So to recap, just the cost of Cap and Trade to this small business will result in an average $443.60 INCREASE EVERY MONTH just to live and do business. To live in my home, buy things like toilet paper, toothpaste and food, and finally, to drive my car to make money. Right now I cannot even estimate the impact of business that will be lost, let alone what will happen if my clients start closing.

Listen, I am all for being a good steward of this earth. We should keep our planet healthy and much research should be done to figure out what can be done to actually accomplish that goal. But this science is not settled by a long shot, no matter how much Senator McCaskill, Russ Carnahan or many other Democrats might like to think otherwise. Reports by leaders in the EPA are being suppressed, hundreds of scientist express their disagreement by taking out ads in newspapers (PDF), and there are also the false claims of diminishing polar bear populations and thinning ice mass. Oh and let's not forget the falling (NOT rising) temperatures. Facts are just strange like that.

Finally, it is important to note that Cap and Trade does nothing to actually lower carbon emissions at all. Ultimately, it is really just a way for very specific sectors of the economy to profit-rape the American people. Cap and Trade does not reward innovation, it only adds to the cost of doing business and those costs will be passed on to the consumer or the businesses will move away, operating in countries which do not have these penalties. Rather rewarding the successes of developing cleaner forms of energy or doing business, there is only the new way to charge. Big business will not bear the brunt of increases and penalties. One way or another WE will pay for it.

For the millions of small business out there though it is a different story. We will not survive cost increases like this. We will not be able to continue to provide jobs and goods or services to the communities we live in. The government needs to take a look at the real math, that affects real people.