Writing at Reason, the outstandingly named economist Veronique de Rugy included this sentence in a column about the Value Added Tax, and why it won’t work:

Take President Obama’s first budget, released last year. In it, he assumed that most of the $600 billion coming from proposed cap-and-trade fees would be allocated to deficit reduction. A year later, his budget still assumes the revenue (even though the law is not yet passed)…

What? His budget includes revenues from Cap and Trade? He knows, doesn’t he, that Cap and Trade isn’t the law yet, and doesn’t stand a very good chance of becoming the law?

Why don’t we just include the revenues coming in from our mining colonies out in the asteroid belt, too?

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Bucking my usual blogging habits, I attempted research to verify this outrageous – but entirely believable – claim. A comprehensive (5-minute) search of the internet took me to this story in Bloomberg:

President Barack Obama’s budget drops an estimate that the “cap-and-trade” system he backs to combat climate change would generate at least $646 billion in federal revenue.

The president’s spending proposal for fiscal 2011, released today, assumes that a program to limit emissions and establish a market in the trading of pollution allowances would be “deficit-neutral,” producing no net gain or loss in federal revenue.

The president’s budget plan last year assumed at least $646 billion in revenue from 2012 to 2019 from the sale of allowances, with some of the proceeds used to help fund a tax cut for middle-class families. No such estimate was offered today.

So President Obama’s budget forecast last year assumed $646 billion in revenues over an eight-year period. Before he assumed that, he had to assume that Cap and Trade would pass.

He has, perhaps, learned his lesson there. Or perhaps not. Still. Wouldn’t this mean that all these graphs we Righties love to post showing us the size of the federal deficit…

…are actually optimistic?

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