The UK’s Energy Plan is Maddness

Britain's new energy plan is nuts.

For those who haven't heard, the British government plans to cap the price of energy for household for the next two years.

This will expose the British Government to essentially unlimited liability. The total cost of the program is estimated at over £140 billion. This is equivalent to almost 5% of Great Britain's GPD, and the whole amount will be borrowed.

They'd be far better off spending the money addressing the long term problem and transitioning to alternative energy sources.

The price cap will also make the energy crisis worse. High prices provide important signals to consumers to curb spending and seek alternatives. Prolonged high prices also provide important signals to capital markets that it's viable to invest in developing alternatives.

By putting in place this price cap, the British Government is wasting public money to make the energy crisis worse. A little like our government did, on a much smaller scale, but reducing the excise on petrol.