Showing posts with label unintended consequences. Show all posts
Showing posts with label unintended consequences. Show all posts

Thursday, August 9, 2012

US: 54.5 mpg and the law of unintended consequences

US: 54.5 mpg and the law of unintended consequences – by Bishop Harry R. Jackson, Jr.

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Legislators and regulators need to observe a fundamental Golden Rule: Do not implement new laws if you have not considered or cannot control important unintended consequences.
A perfect example is the Obama Administration’s plan to increase new car mileage standards, from the currently legislated requirement of 35.5 miles per gallon by 2016 to 54.5 mpg by 2025, as an average across each automaker’s complete line of cars and light trucks.
Carmakers reluctantly agreed to the new requirements, to avoid even more onerous standards, or different standards in different states. But the deal does nothing to alter the harsh realities of such a requirement.
First, National Highway Traffic Safety Administration (NHTSA) analyses indicate that the mileage standards will add $3,000 to $4,800 to the average price of new vehicles for models from now until 2025. Moreover, this price increase does not include the $2,000 to $6,000 in total interest charges that many borrowers would have to pay over the life of a 36-60 month loan.