It's quite fun, for given values of "fun:"
- The US Government subsidizes the production of corn-based ethanol, as a substitute/supplement for gasoline.
- To maintain a demand, the US Government pushes for standard gasoline mixtures containing 10% ethanol. This will supposedly decrease pollution and increase efficiency.
- Corn is then turned into ethanol wholesale.
- Corn-based food prices rise. That includes critters that eat corn, by the way.
- This results in higher food prices domestically. This decreases efficiency.
- This also results in more food insecurity globally.
- Corn-based ethanol, being subsidized, crowds out other ethanol fuels. If this is confusing: please, reference Gresham's Law, and generalize from its specific example.
- Ethanol, being less energy efficient than gasoline - which is why we weren't using it to begin with - ends up causing effective inflation, as it costs more to go the same distance in your car. This also increases pollution.
- In short, 10% ethanol gasoline results in more pollution and less efficiency.
- Therefore, the only solution... is to raise the amount of ethanol in gasoline to 15%.
You have to realize, of course, that darn few DC bureaucrats actually drive anywhere. And the ones that do rarely pump their own gas.
Moe Lane (crosspost)