News Item:
Retirement funds at stake in Clean Energy bill

This coming Thursday, the House of Representatives will vote on whether or not to pass the Clean Energy Act of 2007, which sounds like a good thing.  Funds raised by the bill are to be earmarked for subsidizing cleaner energy resources, such as the production of ethanol, the construction of windmills, and ways to implement solar power, all good things, to be sure.

To pay for these good things, the Clean Energy Act proposes to eliminate certain tax deductions and credits that were geared to the oil and gas industries.  In other words, make them pay more in taxes.  Another good thing, right?  I mean, going after Big Oil, what can that hurt?  They’ve been getting way too fat recently.

Anyone out there enrolled in a 401K plan?
Do you know where your money is invested?
A good chunk of 401K’s trade in utility companies, like oil, and gas.  Bloated profits aside, if those companies take a tax hit, are they going to just stand by and say “Oh well”?  Not very likely, it seems to me.  Corporate America doesn’t have to actually lose money to see something as a loss.  Any reduction in profit is also considered a loss, and you can bet that will trickle down.  Maybe not such a good thing.

Any increase in the cost of domestic oil production will likely be met by a reduction in product.  Their bottom line is measured in dollars and cents, not barrels pushed through the pipeline.  Less production here, means more imports from OPEC, which means the price of oil goes up again.  So we’ll be paying more at the pump, while our retirement accounts shrink, because the stocks we’ve invested in will slip.  Either congress should consider rethinking this one, or we should get ready to bite the bullet.
 

CNS News story

Cartoon from Sid in the City

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