OPINION | EDITORIAL: Gas on the fire – Arkansas Online

Milton Friedman once said one of the great mistakes in government is to judge policies by their intentions rather than by their results. One of these days, the United States Congress might learn that lesson.

Three U.S. representatives, all Democrats, want the government to hand out more stimulus checks, or rebates, to Americans to help them pay for gasoline at the pumps. The idea goes that because people are hurting as gas prices rise, the federal government should send them money to help pay for their fuel.

According to CBS News: "Called the Gas Rebate Act, the bill ... would provide a monthly energy rebate of $100 per person. That refund would kick in for the rest of 2022 as long as the national average gas price topped $4 a gallon during any given month."

That's just one proposal. There's another that would hand out money to Americans quarterly, based on a new tax on oil companies. That legislation is called, poetically, The Big Oil Windfall Profits Tax.

There's yet another: The Stop Gas Price Gouging Tax and Rebate Act.

All this reminds us of those acts in Ayn Rand's magnum opus "Atlas Shrugged." Ms. Rand had politicians down pat. When her not-altogether-fictional congressmen wanted some legislation that would create instability, they named it the Public Stability Law. When they passed legislation that would kill employment, they called it the Preservation of Livelihood Law. Now the acts to help with gasoline inflation could probably cause more gasoline inflation.

The reasons for inflation these days are many: The pandemic caused a supply link hiccup around the world. Demand surges as people come out of lockdowns. There's a war you might have heard of going on in Ukraine. Wages are rising. And when the price of gas and diesel go up, the price for everything that is moved with trucks--almost everything--goes up, too.

But there is another reason: Too many dollars chasing products, or as the economists put it, "increased money supply." When people have a surplus of cash, the natural order is for prices for goods to rise.

So how would putting more money into the economy help lower the cost of gasoline? Answer: It wouldn't. But it might get a couple of members of Congress into the news columns.

Also, do our betters understand that there is another cause of inflation? It's called devaluation. As more money is printed, it becomes worth less. It's a part of the law of supply and demand. The more there is of something, the less it can bring at the market. And right now the national debt stands at $30 trillion and growing.

$30,000,000,000,000-plus.

And as dollars become worth less, it takes more of them to buy things. Like a gallon of gas.

Econ 101 should be a prerequisite for anybody signing up to run for Congress. Or maybe just common sense.

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OPINION | EDITORIAL: Gas on the fire - Arkansas Online