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Summertime in Michigan is a beautiful thing. After what feels like six months of winter, these fleeting warmer months are treasured by those of us who call this place home, and by folks in nearby Midwest states (and beyond) who flock to its pristine lakeshores, sand dunes and forests.
The Fourth of July is typically one of the busiest summer weekends in the Great Lakes State.
This year, however, I suspect not as many people will invest in those road trips “up north” or travel as far as they had hoped. Because filling up the tank these days is just that – an investment.
Michigan gas prices are averaging about $5 a gallon, which is now above the national average of $4.86. Airline tickets are also sky high. A recent survey of July Fourth travel plans highlighted that more than half of Americans say gas prices will impact holiday travel.
Inflation remains at a 40-year high, without any indication of relief in the near future.
Welcome to reality, Mr. President: Inflation has Americans worried about bi
What does President Joe Biden have in mind? Last week, he asked Congress for a federal gas tax holiday through September, which would offer motorists a savings of 18 cents a gallon for gas and slightly more for diesel.
Would a holiday makes things worse?
Plenty of economists and regulation experts are skeptical that such a tax holiday would make it to consumers’ pockets or offer much relief even if it did – estimates range from $20 to $30 per driver over three months.
Even Biden’s fellow Democratic leaders in Congress don’t seem keen on the idea. In 2008, while on the campaign trail, then-presidential candidate Barack Obama called gas tax holidays a “gimmick” to win votes.
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And the stimulus, while small, could add to inflation woes by encouraging more demand when supply can’t keep up.
“A relatively minor, temporary gas tax cut on the consumer side might help a bit, but it mostly just distracts from our supply-side woes,” said Brad Polumbo, policy correspondent at the fiscally conservative Foundation for Economic Education, via email.
“Some of the causes of today’s high prices are out of our control, but others are a direct result of the president’s policies restricting our domestic energy sector," Polumbo said. "Since taking office, the president has driven down supply by holding up leases for domestic drilling, canceling essential energy projects, and chilling investment with his anti-fossil-fuel rhetoric.”
Peter Van Doren, a senior fellow at the Cato Institute and the editor of the journal Regulation, said if there would be any benefit to a federal gas tax holiday, it wouldn't be sizable.
And the risks of higher taxes in the future and increasing debt to fund the reprieve must be considered as well.
“Is this a good reason to borrow money at the federal level? The answer to that seems to be no,” Van Doren told me.
Inflation likely to dominate midterms
Biden is desperate – as are Democrats heading into the midterms – to make it seem like he is “doing something” to combat inflation and is eager to deflect blame for the problem. He’s even planning to travel to Saudi Arabia in July, a country he called a “pariah” on the campaign trail, to encourage more oil production.
The president continues to drop in his job approval ratings. Recent polls show he is averaging 38%.
And while the Supreme Court’s overturning of Roe v. Wade and blockbuster testimony at the House Jan. 6 committee hearings are dominating headlines, Americans still say what they care most about is what’s directly impacting their wallets.
A USA TODAY/Suffolk University Poll released before the abortion ruling shows that even among Americans who opposed overturning abortion rights, they say by a 2-1 ratio that the economy is more important to their November vote. And 7 in 10 said the court’s ruling would have no impact on whether they vote at all.
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In a White House statement June 22, Biden talks about what he’s doing to “blunt” the high price of fuel, yet he continues to put all blame on the “Putin price hike” in light of the repercussions from Russia’s continued war on Ukraine.
That’s certainly a factor, but it’s far from the only one. The government’s response to COVID-19 and the trillions in spending and direct aid to citizens also contributed to the spike in inflation and supply issues.
Don’t expect Biden to admit any fault there. The president would rather pander, whether in the form of student loan forgiveness or this temporary tax holiday – measures that may score temporary political points among some voters but would only add to the inflation that’s worrying so many Americans.
As Polumbo observed, “Temporary tax cut or not, we probably won’t see a large-scale decrease in gas prices until the federal government gets out of the market’s way.”
Unfortunately, that may be asking too much.
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This article originally appeared on USA TODAY: July 4th gas prices will shock you. But Biden is just pandering.