Ethanol Bullshit

Inflation has risen at it's highest rate in 17 years. I blame George Bush and Congress 100% for it.

Do you want to know why inflation has been so high lately? It is mainly because of a sharp rise in the costs of food.

WASHINGTON - Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas.

Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, with consumers especially feeling the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.

For December, the Consumer Price Index rose by 0.3 percent, down from 0.8 percent in November, as food costs were flat for the month and energy prices rose by 0.9 percent after an even bigger 5.7 percent jump in November.

So basically if it wasn't for food and energy, inflation would be low.

The reason food in particular is so high is because of the crazy and soon to be crazier insistence that we use ethanol from corn.

So although the government may save almost $7 Billion consumers will most likely end up paying that and more in increased costs for all those 2,500 corn related products.

That brings us back to the question of the energy it takes to produce ethanol. One of the biggest energy components of producing Corn is nitrogen fertilizer and one of the biggest components of Nitrogen fertilizer is natural gas. Plus it requires a great deal of electricity to actually make the ethanol. Back in the 1970's it actually took more energy to grow and refine the ethanol than you got from it . Today due to increases in efficiency that is no longer the case.

So ethanol is a complex proposition that uses a significant amount of energy to produce and could have a major impact on the price of a wide variety of other products competing for the corn.

This was signed into law by President Bush and Congress. It is only going to get worse as Ethanol requirements increase, so will the price of corn and subsequently costs of other food items.

Bush really has let down the conservative movement on this one. It is sad. I was once a Bush supporter, now I have to think that he will go down in history as one of the worst Presidents in American History.

Posted by psugrad98 at January 16, 2008 09:05 AM | TrackBack