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I was doing my nightly news read and stumbled upon an interesting article. McCain, who vehemently supports a federal gas tax holiday, reached out to Hillary supporters today in a speech toward “bitter” voters in Pennsylvania. The main focus of the article was about the “bitter voter” issue from Obama’s speech a while back. For me, there was one paragraph that really stood out:

On the economy, McCain also told voters he understands the pain caused by rising gas prices, but he didn’t mention his proposal for a gas tax “holiday.” His advisers had said it was a winning argument that he would be pushing all week.

I’ve added emphasis to the last sentence because this is perhaps the most disturbing news I’ve heard this entire campaign. It’s one thing when a politician supports supports an idiotic economic policy. This is what both McCain and Clinton did with the gas tax holiday. This type of political rhetoric is allowed. After all, they have economic advisers that make sure dangerous policies like this don’t get promoted. However, in this case, McCain advisers are thinking the gas tax holiday is a “winning argument that he would be pushing all week”.

If McCain advisers support this type of policy, the economy is in a world of hurt with a McCain presidency. A gas tax holiday is only going to result in higher gasoline prices. Much higher gasoline prices. The sequence of events will look as follows:

1. Gas tax holiday goes into place
2. Gas prices continue to increase rapidly as demand remains high for gas
3. Gas tax holiday is lifted
4. Gasoline prices are higher than if there had never been a gas tax holiday in place

The inflationary pressure on gas prices is primarily due to the steady demand for gas. One can easy argue that price gouging is taking place or that prices are being inflated by deception by the oil companies like Enron did with California not too long ago, but there is no proof of such actions as of yet. Meanwhile, there is plenty of evidence that shows demand for gasoline remains strong in the US. Eventually, prices of gas will become too high for the existing demand and demand will drop. When the demand drops, the prices will eventually go back down.

A gas tax holiday will end up stimulating demand for gasoline. Demand will increase, resulting in continued upward pressure on the true price of gas. The federal gas tax would eventually have to be put back into place, unless Congress and the wannabe McCain administration wants to continue the no-tax and spend like crazy policies of the liberal Bush administration.

The bottom line is that a federal gas tax holiday is going to significantly increase the price of gas that will severely damage the US economy. If McCain’s advisers really think this is a “winning” argument, God save us with a McCain presidency. Dean and I will certainly be talking about this on our weekly live radio show, especially since I’ve been a strong McCain supporter up until this point.