Post by Tim Collins on Jul 1, 2009 17:59:34 GMT -7
Stole this from LisaDfan as posted on the strelz forum. Thought it was interesting.
LisaDwrote in Strelz Forum National Topics;
A Cap and Trade Primer for Dummies
Just heard a caller ask Paul about Cap and Trade and the caller did not understand why it would cause massive taxes for us. Paul, to his credit admitted he did not fully understand what cap and trade meant.
Let me explain by way of example.
Obesity is considered a growing threat to the American people, causing all kinds of financial trouble for us, now and at a growing rate in the future. (Very much like the claims made for global warming, allegedly caused primarily by man made green house gases)
So in their infinite wisdom, our government representative decide they will put a stop to this by creating an artificial incentive to reduce the primary cause of obesity - fast food hamburgers.
They gather the experts and come up with a diminishing level of hamburgers allowed to be sold by each hamburger seller. In year one, only 98% of the current volume of hamburger sales can be sold in the US as measured by the total national weight of hamburger used to produce the American Icon of fast food. Each identified (and they have to register with the Government) peddler of Hamburgers is given a maximum allowable pounds of hamburgers they can sell based on last years sales. Each year their allotment goes down by x% until our overall goal of national Hamburger consumption is reached.
Now of Course McDonald's and Burger King are the current leaders of the pack. I mean their Whoppers and Big Macs are the cream of the crop (if you'll excuse the mixed metaphor).
So neither of them want to see their sales decreased, so what do they do? Well they contact El Paso's own Happy Burger who it just so happens has a Cap (allotment of available hamburgers to sell) that is about 1000 hamburgers over what they plan on selling. So McDonald's offers them $100 to buy the excess 1000 hamburgers (they trade for their cap). Happy Burgers is very happy to take the $100, and McDonald's is happy to be able to produce 1000 more hamburgers. Now this is repeated all over the country by both Ronald and The King.
Now Ronnie and the scary King really don't want to lose $0.10 on every hamburger they sell from the allotments they just traded for, so they up their sell price to you and me.
This goes on every year, the whole time the dwindling supply of excess hamburger allotments is diminishing throughout the US, thus soon the purchase price to trade for a cap increase goes up to $0.50 per burger cap traded for, and so does the sell price. Pretty soon a Whopper or Big Mac is considered a luxury food available only to the rich.
Our genius representative created cash value from nothing. Happy Burger wasn't going to make those 1000 hamburgers anyway.
Now substitute CO2 for Hamburger and you get the picture. The cost of being able to continue manufacturing in a process that produces emissions goes up and so do your costs. Think any refined petroleum product, or electricity. Guess who pays? Now Guess who gets rich without producing anything - yes you got it those same guys and gals who brought you futures selling/trading - thats right those evil speculators!!
Riddle me this - what is the real goal of cap and trade? You know, the goal only discussed behind closed doors at the good ole boys club of Lobbyists, Green freaks and Washington Politicians. Hell the Hamburgler couldn't have dreamed up such a caper.
LisaDwrote in Strelz Forum National Topics;
A Cap and Trade Primer for Dummies
Just heard a caller ask Paul about Cap and Trade and the caller did not understand why it would cause massive taxes for us. Paul, to his credit admitted he did not fully understand what cap and trade meant.
Let me explain by way of example.
Obesity is considered a growing threat to the American people, causing all kinds of financial trouble for us, now and at a growing rate in the future. (Very much like the claims made for global warming, allegedly caused primarily by man made green house gases)
So in their infinite wisdom, our government representative decide they will put a stop to this by creating an artificial incentive to reduce the primary cause of obesity - fast food hamburgers.
They gather the experts and come up with a diminishing level of hamburgers allowed to be sold by each hamburger seller. In year one, only 98% of the current volume of hamburger sales can be sold in the US as measured by the total national weight of hamburger used to produce the American Icon of fast food. Each identified (and they have to register with the Government) peddler of Hamburgers is given a maximum allowable pounds of hamburgers they can sell based on last years sales. Each year their allotment goes down by x% until our overall goal of national Hamburger consumption is reached.
Now of Course McDonald's and Burger King are the current leaders of the pack. I mean their Whoppers and Big Macs are the cream of the crop (if you'll excuse the mixed metaphor).
So neither of them want to see their sales decreased, so what do they do? Well they contact El Paso's own Happy Burger who it just so happens has a Cap (allotment of available hamburgers to sell) that is about 1000 hamburgers over what they plan on selling. So McDonald's offers them $100 to buy the excess 1000 hamburgers (they trade for their cap). Happy Burgers is very happy to take the $100, and McDonald's is happy to be able to produce 1000 more hamburgers. Now this is repeated all over the country by both Ronald and The King.
Now Ronnie and the scary King really don't want to lose $0.10 on every hamburger they sell from the allotments they just traded for, so they up their sell price to you and me.
This goes on every year, the whole time the dwindling supply of excess hamburger allotments is diminishing throughout the US, thus soon the purchase price to trade for a cap increase goes up to $0.50 per burger cap traded for, and so does the sell price. Pretty soon a Whopper or Big Mac is considered a luxury food available only to the rich.
Our genius representative created cash value from nothing. Happy Burger wasn't going to make those 1000 hamburgers anyway.
Now substitute CO2 for Hamburger and you get the picture. The cost of being able to continue manufacturing in a process that produces emissions goes up and so do your costs. Think any refined petroleum product, or electricity. Guess who pays? Now Guess who gets rich without producing anything - yes you got it those same guys and gals who brought you futures selling/trading - thats right those evil speculators!!
Riddle me this - what is the real goal of cap and trade? You know, the goal only discussed behind closed doors at the good ole boys club of Lobbyists, Green freaks and Washington Politicians. Hell the Hamburgler couldn't have dreamed up such a caper.