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  • How Much "Cash for Caulk" Do We Need?

    Congress is back, but before Members head home again to campaign, they have to first do what they do best: spend other people’s money.

    Today, Congress will vote on the Rural Energy Savings Program Act, H.R. 4785—a bill that would authorize $5 billion over five years for the Department of Energy’s Home Star loan program and the Department of Agriculture’s Rural Star program. The Home Star program, also known as “cash for caulkers,” provides low-interest loans for consumers to make energy efficiency improvements to their homes, while the Rural Star program provides loans to rural utility providers who in turn give loans to farmers “for the purpose of implementing energy efficiency measures or farm efficiency measures.”

    If consumers and farmers want to make cost-saving energy efficiency improvements from their homes, they can do so without federal handouts. Why should all taxpayers, including those who don’t own homes, subsidize renovations for those who do? Further, such programs can have long-term effects on consumption patterns in the U.S. If consumers come to expect a handout from the government, they may hold off on buying a new product. As we saw with cash for clunkers, the effect was more of the timing of when consumers purchased new vehicles, not the volume.

    What’s worse, the House passed the Home Star Energy Retrofit Act, H.R. 5019 in May, and they sold as a win for the economy, the planet, and consumers because it would purportedly lower both greenhouse gas emissions and electric bills through less energy usage. The bill has a $6.6 billion price tag. What makes the new bill even more infuriating is that it contains provisions that were stripped from H.R. 5019. Since they couldn’t get those provisions through a first time, why not jam them through a second time.

    Even before passage of H.R. 5019, the stimulus bill included $5 billion to weatherize homes. But earlier this year ABC News reported that at the end of 2009, only 9,100 have been weatherized; $522 million of the $5 billion has been spent thus far, which equates to over $57,000 per home.

    Motives of cost reduction and increased profits go hand-in-hand with becoming more energy efficient. If a company, homeowner, or farmer can find a way to reduce its energy use, it can lower costs and thus the price to consumers. And it can do so without help from the taxpayer.

    Posted in Economics [slideshow_deploy]

    6 Responses to How Much "Cash for Caulk" Do We Need?

    1. John, CT says:

      Since consumption drives profits for the heating oil, propane, gas and electric industries, there is a major disincentive to conserve energy.

      And if the US didn't need to protect its Middle Eastern energy interests, it could save many billions and prevent the loss of American servicemen.

      The DOE claims 40% of all US energy consumption is by US buildings. If energy conservation programs like these can stop or slow the greatest transfer of wealth in the history of the planet, I'm all for it. We don't need to keep sending money to those in the Middle East who would destroy us. And it seems unliely this conservation labor and material money will wind up being spent in China or India. The whole thing sounds like Roosevelt's 'New Deal', which still benefits US today. Sorry to disagree, but I am all for it. I don't like being addicted to Middle Eastern energy.

    2. Bobbie says:

      I don't agree with any government dependency outside of their constitutional duties, interpreted honestly.

      People have to get off their "government can do it for us" kick. Government needs to focus on their own job so we CAN do it for ourselves.

    3. Pingback: Whitfield Sponsored Bill to Lower Electricity Costs Receives Stamp of Approval … – iSurfHopkins.com:solar power | Daylight Saving Time - Saving Time, Saving Energy

    4. Pingback: Whitfield Sponsored Bill to Lower Electricity Costs Receives Stamp of Approval … – iSurfHopkins.com:electricity | Daylight Saving Time - Saving Time, Saving Energy

    5. Billie says:

      It's potential is more corruption as it causes unnecessary cost, paperwork, mandates, regulations and (temporary make-work?) Part of owning a home is maintaining it, part of it's maintenance is caulking, if my house needs caulking my husband will be happy to do it or we can do it together with no help in labor or cost. It's part of the responsibility of ownership. People have to live up to their responsibilities and government has to let the rightful private sector handle it and stop putting the costs of irresponsibilities on the tax payers.

    6. Todd, Utah says:

      I guess Nic's point is that we shouldn't pay taxes on things that don't directly benefit us. I don't have kids so why am I paying taxes for schools?

      Because of the various tax breaks for energy companies, we don't pay a true market price for energy. With that; the cost of energy is low and the financial payback for energy improvements is artificially long and the average homeowner is not sure they'll be in their home 5 years from now.

      Why not take issue with the tax breaks for energy companies? When a car breaks down; you have to buy a new one. When a home is inefficient, you probably don’t know it and you definitely don’t have to do anything about. Poor analogy. Does the bill create the jobs, will it save the energy and does it have a positive ROI for the government that its supporters claim? Although I’m skeptical about the benefits; it’s disappointing that not one opponent has not made an intelligent argument against it.

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