More Efficient Cars = Inefficient Market?

President Bush recently announced that he would like to raise the fuel economy standards. He wants to raise the standard by 1.9 miles per gallon for vans, trucks, and sports utility cars. He is hoping to implement this plan by 2008. On the surface this sounds like a win-win situation. The bill will not only save money but also help the environment. Real economists see problems. President Bush is not taking the additional cost to the manufacturer into consideration. This cost will make the manufacturers cut back production and raise prices in order to cover the new cost. This will create inefficiency in the market because old buyers may not buy with the new cost creating dead-weight loss. President Bush needs to take a second look at his bill and see if he is really saving consumers money or adding a higher bill.