Monday, January 29, 2007

The Pigou Club - count me in

Economist Greg Mankiw, former member of Pres. Bush's Council of Economic Advisors and now a professor at Harvard, has been patiently advocating for a simple increase in the gas tax as the best, most efficient means of increasing the US' energy self-sufficiency. (His consistently interesting blog is required reading if you're at all curious about economics.) He's dubbed the people who've signed onto this approach the Pigou Club, for reasons explained here.

My main objection to a tax rise has been that a pork-addicted Congress and an administration lacking in financial discipline would squander these newfound billions.

But alternatives (such as the Rube Goldbergian Bush administration proposal recently announced), full of side effects and unintended consequences as they will be, would be worse, in my view.

So, while gas prices are relatively low, let's start phasing in a new gas tax, to perhaps $1.00 or $1.50 a gallon, and commit the revenue raised toward deficit reduction.

My two cents.

(Picture from bubbels via stock.xchng)

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