So what the heck is Cap and Trade? It depends on who you listen to. The Democrats in the house have put cap and trade legislation on the fast track through the House. It is safe to say the Democrats are willing to destroy the discipline of economics to make it law.

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Companies can Purchase Emission Permits and Continue to Pollute

The goal of cap and trade is to steadily reduce carbon dioxide and other (so called) greenhouse gas emissions spread out to the economy as a whole in a lowest cost-effective manner. (Warning-Never trust the government when they use the words cost and effective together.)

The cap is a scheme to set a limit on the amount of greenhouse gas that companies can emit. The company is given an “Emissions Permit” for every ton of carbon dioxide (humans give off carbon dioxide) releases into the atmosphere. The government sets the limit (Cap) that a company is allowed to emit (pollute). Over time the limits will become stricter thus allowing less and less gases until the ultimate reduction goals are met. Sounds like a good plan. But wait.

The trade is the kicker. Companies that reduce their emissions below the required limit can sell their extra “Emissions Permit” to companies that can’t make the reductions. The theory is that this will set a level of overall reductions and rewards the most efficient companies ensuring that the cap is met at the lowest cost to the economy.

(Translation: you and I will see an increase in gasoline and home heating. It does not take into account that certain regions and populations will be more severely hit than others — manufacturing states more than service states; coal producing states more than states that rely on hydro or natural gas. And Low-income Americans, who devote more of their disposable income to energy, have more to lose than high-income families.)

The profits would create a large revenue stream to be used to achieve critical public policy objectives related to climate change (called weather) and economic development. (If we put this money in a “Lockbox” it might work, but the revenue will be siphoned into the general fund like social security) The government could “grandfather” allowances to the polluting firms by handing them our free based on both historic and or projected emissions.

Simply put, the companies that do the least to reduce pollution will still benefit because all they have to do is buy more “Emissions Permit” and guess who pays the cost for all this magic. You are correct if you said the consumer.

Only in the mind of the idiots in Washington, you know the same people that want to fix health insurance by screwing up health care and have given us social security, the war on poverty, income tax, earned income credit and food stamps wants to pretend that cap and trade will really work.

The Congressional Budget Office has said cap and trade would cost the average household only $175 a year by 2020. After 2020 the toughest restrictions kick in and as the cap is tightened, companies will be stripped of initial “Emissions Permits’ to offset their emissions. As I said it sounds good at first until you figure out that is no real reduction in emissions. Cap and Trade is simply a huge tax and an unnecessary increase in fuel for the consumer. Some say the cost is closer to $3000 per person.

While the Democrats have promised cap and trade won’t put the burden on the homeowner. Republicans offered three amendments: one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%. Democrats defeated all of them. So much for bipartisanship

This whole scheme is based on cost estimates from unreliable models predicting climate change. (Do you really want people who can’t tell us if it rained yesterday, determining climate change?) Britain’s Taxpayer Alliance estimated the average cost per family for Green Taxes is $1300 a month. Don’t be duped, Cap and Trade is nothing but an expensive unnecessary Obama Tax.