I have seen macroeconomic forecast models which estimate that cap and trade will shave off anywhere from 1% to 3% of GDP once the economy gets going in the future. Those are very significant numbers, because it effectively negates any positive effects from “stimulus spending.”
What you will get, starting in 2010 will be 1% to 2% GDP growth combined with the emergence of inflationary pressures due to the the huge size of the monetary aggregates. By 2012 we could have inflation up around 6% and climbing with unemployment still well above 7% and maybe close to 8%.
The Democrats probably will barely hold majorities in both houses after the 2010 elections. By 2012 Obama will be defeated and his party will have lost their majorities. However, I doubt that the Republicans would get anything near a fillibuster proof Senate. That means unraveling Obama’s and the Jackasses’ programs, spending, and overall damage will be slow. And we may not get rid of it all.
