Skip to comments.Congress Shucks Ethanol Subsidies, Not Mandates
Posted on 01/03/2012 4:36:42 PM PST by Kaslin
Energy Policy: Congress let the corn-based fuel's tax credits expire when it adjourned, but continuing mandates for its use means pump prices will go even higher and the money saved will be spent elsewhere.
Subsidies for ethanol expired over the weekend, ironically just days before the Iowa caucuses.
In their 33 years of existence, ethanol subsidies, the original poster child for crony capitalism, with an estimated cost of at least $45 billion and an annual price tag in recent years of $6 billion, have been a political sacred cow, letting farm state politicians bring home the bacon in exchange for generous campaign contributions.
A $16 trillion deficit in an election year in which the economy struggles through a nonexistent recovery and a failed stimulus has made it hard to defend such subsidies. Letting this one expire allows members of Congress to claim they are cutting spending in hard times even when they aren't.
The money not expended on ethanol subsidies will not be returned to the Treasury or to the American taxpayer.
It will be spent somewhere else, likely on some other green energy pipe dream like solar panel makers that go bankrupt or electric cars that catch fire.
Farmers will do fine, but most taxpayers and consumers will not. The price of corn will remain high, continuing to be pushed higher by the forced use of ethanol in gasoline that has not expired. Food prices driven higher by this mandate will continue to rise, as will gas prices as the added cost to ethanol producers is passed down the line, paid ultimately by the consumer at the gas pump.
(Excerpt) Read more at news.investors.com ...
What else would you expect, it’s congress!
Half-measures are the best they can do.
Beware their good intentions.
There isn’t a problem in America that politicians can’t make worse.
This is actually not the worst situation. Without the subsidies there will be a squeeze in production that will make the mandates unobtainable.
It’s the same problem Obamacare has.
At some point, everyone runs out of other people’s money and the system collapses.
While this reads like a negative I believe this is still a significant positive. These had to be ended to ever get the mandates removed in the future. Why would voters rebel against mandates that don't personally cost them anything?
Positive #2 with rising gas prices: Obama is POTUS NOT a Republican and he is up for election this year. Expect prices to rise sharply late spring.
Here in Maryland the Democrat governor O Malley cited reduced gasoline prices as a reason for him to raise the state gasoline tax now. He already raised the sales tax and liqueur tax since taking office. Think Democrats only want to raise taxes on the rich? This is what they do when they have no competition.
The increase in gasoline prices will be largest in the Northeast -- due to the recent refinery shut-downs in the area.
The so-called "summer blend" is much harder to make than the other varieties that the EPA mandates and, with reduced refinery capacity and associated inventory shortages, there will be some sharp spikes in the area's gasoline prices.
The resultant howl from the market might even encourage a Republican Congress to dump the EPA's blending mandate in 2013. Or, at least, reduce the complexity of their "57 varieties"...
It would be one small step toward rationalizing the petroleum market...
Yes, Matilda, we really do have people that stupid in congress.
I can think of no group of “humans” for which I have less regard, or more contempt.
They are slime.
Should they come to an untimely end, I shall throw a mega party.
The ironic part to this is that ethanol was mandated (and light bulbs were banned) in a GWB/Pelosi 2007 energy bill as a result of high gasoline prices, and it made them go up even higher. It was public outrage over high prices that helped pressure GWB into making a deal with Democrats to get something called an energy bill passed into law. With Obama as POTUS the political dynamics are different.
The hidden costs of Mythanol are probably much higher.
When we are forced to pay higher costs for gasoline, we have less money to buy other choices. Those other choices might help our floundering economy if we had the money. These are the growing hidden costs including higher meat prices due to corn costing more for farmers/ranchers.
Instead the money goes to the Corn Belt $inators and Congre$$its and the Mythanol industry of lies, deceit and payola. This is financed by the high prices of Mythanol.
The last time I traversed that endless road was 1957 when gas was $0.25.9 per gallon and their dollar was sure cheaper than ours!!! Now we have parity in dollars and they sell it by the liter... OMG!!! (I hope they take MasterCard!!!)
Which reminds me, I gotta get us passports these days which we didn't need back then. Dam!!!
Get the passports so you can get across and back in after you buy gasoline at a per liter price.
In the mid 1990’s we went to the UK and drove to some of my ancestors old grounds in the Devon Area. We bought gas at a per liter price then, and it was very expensive.
My wife reminded of conversations in the Devon area, where I warned my cousins not to go in with the Euro. That was well received there but not a week later in London.
Isn't that sweet? If we wanna drive to AK, we have to pay for their socialized medicine version of "Obamacare!" What a pantload!!!
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