James Hamilton, professor of economics at the University of California at San Diego, said that most of the benefits from a temporary tax moratorium would likely go to producers rather than consumers. He said that states that suspend gas taxes are able to respond to rising demand more efficiently than the country as a whole, because gasoline supplies can be easily moved from one state to another.

"Prices would certainly rise to the market-clearing level," said Hamilton. "I would expect the price [of gas] to go back to very close to where it was before [the tax cut], in which case consumers would not see any benefit."

The Fed's have the power to prevent Consumer Rape.

Clinton has proposed a "windfall profits tax" on oil companies to replace the money her proposal would take from the nation's infrastructure budget. The merits of that tax should be fully debated elsewhere. But the irony here is that a gas tax holiday could increase profits for the very firms Clinton says are making too much money now.

Here's why: The gasoline supply for the summer is pretty well fixed. If the price suddenly drops by 18 cents a gallon, however, motorists who have been cutting back on their driving will suddenly drive more, using more gas. That increase in demand will push the price back up again, perhaps to the same level it was before the gas tax was suspended.

And as gas prices float upward, revenue that would have been going for infrastructure would now be pure profit for the oil industry. The only way to avoid this scenario would be to freeze gas prices at the lower level, but that would almost certainly lead to shortages.

Obama understands this, which is why he has refused to pander on an issue over which it is easy to score cheap political points. Clinton and McCain could not resist that temptation, even though they surely know better. Shame on them.

Your are correct. I think the McCain plan is crap.

Bad plans are always great.

"What would happen more likely than not, gas taxes would be cut, but pump prices wouldn't go down, service stations would just continue charging what they are charging,"

"I think it is close to political pandering it is bad policy and political gimmickry. If you want to deliver relief to folks you have to do more than just this little holiday from the gas tax. You have to address what is driving the price of crude oil, even problems with the weak dollar.

"It is crazy, there is a bunch of different reason it is crazy and all the economist are saying it is nuts. First of all it is pocket change and it doesn't do anything short term. It will just put more money in the oil companies pockets. It is typical Washington beltway crap. It is just like typical. They make a big fight over a small, nothing issue, and nothing will ever get done."

"Stated as clearly as I can," he wrote, "it's utterly misguided both environmentally and economically. Environmentally, it does actual harm, since it reduces the price of producing greenhouse gases. And economically it's trivial or worse -- by reducing the price of driving it encourages more of it, thereby increasing demand for gasoline, which inevitably pushes the price back up - the consumer gains nothing, and the oil companies and OPEC collect the extra bucks instead of the government."

ATA appreciates the effort and supports the proposals. But we do have concerns that any fuel tax suspension proposal could damage the already ailing Highway Trust Fund. To the extent that McCain and Snowe's proposals use general revenue funds to offset the hit to the trust fund, that concern is addressed. ATA did not ask for this legislation. And we believe it is only a very short term answer that does not do anything to address the longer term issue of rising fuel prices. ATA recognizes that rising fuel costs have a disproportionate impact on small trucking companies where even a small savings can be the difference in their staying in business

Oil passes $122 on $200 oil prediction, supply concerns
Tuesday May 6, 11:41 am ET
By John Wilen, AP Business Writer

The Fed's have the power to prevent Consumer Rape. No Corporation should be allowed to take down the economy of the country like happening today.

and therin we find the problem as the Feds and the corps. are running the show, thus pandering is the only thing this is about. I agree, it is a lose/lose for the people, except for George Bush's "base". As McSame is just that, and Hillary is also for it should be enough to see the writing on the wall for what it is.....

It is simply a temporary relief measure. Not unlike the Tax Rebate which I doubt anyone is sending back to the IRS..

They are two very separate things. But there's nothing wrong with temporary relief for those who are seriously struggling. No matter what level it may be.

Obama is opposing it only because he didn't come up with it first. That's where the politics can be found.

Obama took the stand and told the truth.
Refreshing to some-Plain old shocking to others

the Illinois senator does have a plan to help those people who's wallets are hurting right now.
"$1,000 tax credit for working families which is $1,000 right off your taxes,"

Less then two years ago the best selling US autos were SUV's with pathetic gas mileage.

Q: Is it better to have a bad plan; or to claim that the tax holiday is a bad plan because you really have no plan because you are receiving megabuck contributions from executives of the petroleum industry?

I disagree.
The simple relief you speak of will come back to haunt us. Not only will we eventually pay more, we lose the road funds for this so called "Holiday".

Not unlike the Tax Rebate which I doubt anyone is sending back to the IRS..