NCPA - National Center for Policy Analysis

$2 GAS AND $1 EGGS

June 11, 2008

The jump in the unemployment rate from 5 percent to 5.5 percent, the largest single-month surge in unemployment since 1986, should be a wakeup call to Congress, says Diana Furchtgott-Roth, a former chief economist at the U.S. Department of Labor and senior fellow at the Hudson Institute. 

It's not the White House that has the power to help Americans, it's Congress, which has declined to consider many White House initiatives, says Furchtgott-Roth.  Are a half percentage point jump in the unemployment rate and $4 per gallon gas sufficient to galvanize the lawmakers into taking some necessary action?

According to Furchtgott-Roth, Congress should:

  • Extend or lower the current tax rates, which will increase from 35 percent to 40 percent in 2011 at the top and from 10 percent to 15 percent at the bottom; raising taxes will only discourage work, business creation and investment.
  • Lower energy prices by allowing oil companies to use America's domestic energy supplies; the U.S. Minerals Management Service estimates that American untapped oil and gas reserves total 143 billion barrels of oil and 1,050 trillion cubic feet of gas.
  • Eliminate the rapid increase in food prices by repealing the mandates requiring America to use a certain amount of ethanol each year; since making ethanol uses as much energy as it gives off in fuel, America is raising food prices without even saving energy.

More jobs, a larger share of take-home pay and a return to $2 a gallon gasoline and $1 eggs would make Americans better off in today's economy, says Furchtgott-Roth.  If Congress desired, it could pass laws that would allow this to happen.

Source: Diana Furchtgott-Roth, "$2 Gas And $1 Eggs," New York Sun, June 11, 2008.

 

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