CBO finally synthesizes financial impact of Waxman-Markey: Economically Horrid
Posted by Clyde Middleton
on Nov 23 2009 Filed under Politics.
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Pretty remarkable – GDP reduces, displaced workers abound, and everyone’s costs go up – except for poor folks … we merely shift middle- and high-income monies to them.
The rest of this post is a few extracts from the report. My italics for emphasis. Entire report embedded at end.
The most damning first. Changes in Energy Use and Emissions:
The heavy use of offsets predicted by the models presumes that offsets could be provided with only modest administrative and other costs; if offsets proved not to be available at modest cost, allowance prices and the economic costs of the proposal would be much higher.
Gee, you mean all of this could be grossly understated? How comforting.
Macroeconomic impact:
On the basis of those estimates and its own analysis, CBO concluded that H.R. 2454 would slightly reduce real GDP—by roughly 0.25 percent to 0.75 percent in 2020 and by between 1.0 percent and 3.5 percent in 2050 (see the right panel of Figure 1). By way of comparison, CBO projects that real GDP will be roughly two-and-a-half times as large in 2050 as it is today. Losses in consumption and overall well-being would probably be smaller than losses in GDP.
Impact on employment:
Labor markets would take time to adjust to shifts in demand. Job losses would be concentrated in particular industries and in particular geographic regions. Some workers would probably end up working fewer hours or at lower wages than they did previously, and some might leave the labor force entirely. Involuntary job losses could significantly reduce the lifetime earnings of some affected workers.
The distribution of costs – redistribution to the “lowest quintile”:
“CBO concluded that under H.R. 2454 the loss of aggregate purchasing power would increase from about 0.1 percent in 2012 to 0.8 percent in 2050. Those losses would be distributed in ways that tend to benefit lower-income households. In 2020, households in the highest income quintile would see a loss in purchasing power of 0.1 percent of after-tax income, and households in the middle quintile would experience a loss equivalent to 0.6 percent. Households in the lowest quintile, by contrast, would see an average gain of 0.7 percent. By 2050, households in the highest quintile would see a loss in purchasing power of 0.7 percent of after-tax income, and households in the middle quintile would see a loss of 1.1 percent. Those in the lowest quintile would see a 2.1 percent increase.”
Full document:
Related Posts
- Obama Bounce from Waxman-Markey: -1
- Picking our way through Waxman-Markey
- The Immorality Of Waxman-Markey: Intense Pain, No Environmental Gain
- Roll Call on Waxman-Markey
- Full text of Waxman-Markey Fiasco
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