Twenty in Ten

In Bush's recent State of the Union Address, he outlined what he's calling the Twenty in Ten plan for reducing America's consumption of gasoline by 20 percent in 10 years. This plan is the most ludicrous, heavy-handed, excessive piece of regulation that I've ever seen.

Why do Americans consume so much gasoline? Because gas is cheap. We've developed a lifestyle based on cheap gasoline. Until people change their consumption habits, we will continue to use too much gasoline. What will make people change? Government mandates to use bio fuels? Government regulation forcing corporations to provide more fuel efficient cars? A "$175 Million Highway Congestion Initiative For State And Local Governments To Demonstrate Innovative Ideas For Curbing Congestion"?

As long as gasoline remains cheap and abundant, we will use too much of it. My guess is these mandates will be revised later when it's clear that there's no feasible way of meeting them. And in the meantime they will waste a lot of time and money.

My recommendation: raise the gas tax. People will use less gasoline without all the hassle of trying to regulate businesses and consumers, and without the government trying and pick and choose what to subsidize.

I'm not the only one who thinks Bush's plan is a joke. Keep your eye on Cheney in this short clip from the State of the Union Address:



Here's more analysis.

Update: I should have included a link to this interesting blog. Their take on President Bush's plan:

Nice words about cutting consumption won’t achieve anything. The thing we should be focusing are incentives. There is no incentive for drivers to use less gas and Pigovian taxes are the best incentive economists can think of.