Forcing the Oil Price Lower By Lesie J. Sacks
The Bear on Aug 27 2008 at 8:30 am | Filed under: Energy Policy
As even American consumers are learning, oil is money; less well known is how this money feeds Saudi Arabia and its worldwide network of Madrasses, those fundamentalist schools propagating Islamic Radicalism. Oil money also underpins the Iranian regime and its active support of terrorism via Hamas and Hezbollah.
Paying five dollars per gallon versus four dollars per gallon channels an extra $100 billion of disposable income to these radical Islamist regimes, keeping them awash in even more petro-dollars for their many nefarious schemes.
Why don’t we pay ourselves that extra dollar, that extra 100 billion?
If we add a $1 tax for every gallon dispensed in the USA, then, counter-intuitively, the ultimate price of gas would in fact be forced to drop: First, the U.S. government would have an extra $150 billion with which to increase alternative energy funding, expand safe and environmentally-friendly oil and gas exploration, as well as nuclear and hydroelectric power stations; all crucial contributors to our vital energy independence. This windfall could further fund Social Security and Medicare and reduce income taxes and our national debt, thus endearing this revolutionary tax to Democrat and Republican consumers alike. Even with a $1 tax hike we would still be paying a third less per gallon than all of Europe. It’s the fairest of all taxes as one pays only for what one uses.
Second - and most importantly - this tax would discourage and depress domestic oil consumption substantially. The shock and size of the tax would likely produce a modest glut of oil worldwide, reducing the price of oil in world markets. This consequential fall in the price of oil would critically reduce by tens (and possibly hundreds) of billions of dollars the blood monies flowing to terrorist-supporting states; American coffers, on the other hand, would be filled instead. Ironically, then, some or all of the tax would effectively be paid by Iran and Saudi Arabia, by Venezuela and the OPEC cartel. The American consumer will thus be actively financing freedom instead of terror.
There has been little public discussion of this eminently rational project, truly an honest and elegant solution to arguably our nation’s most pressing concern. The myriad negative externalities associated with oil consumption, terror financing, higher military spending, environmental degradation, among others, should realistically be factored into the price of a gallon of gasoline. While difficult, it should not be impossible to sell this concept to the American public if the consumer understands that when the cost of terror is applied to the price of oil in the form of a transparent tax, billions of dollars will be removed from terror states and to be reinvested in our economy, our country and our energy independence. We will thereby reduce the ability of our enemies to blackmail us, to influence Washington and peddle their agendas worldwide. Call it a “redemption tax.”
Madrassas and terror organizations will run short of funds. Decreasing gasoline consumption with a concomitant increase in alternative energy production will further depress the price of oil, perhaps back to $3/gallon where we started, or even lower.
When gasoline is burnt it emits pollutants. Higher gas taxes as part of a broader carbon tax are the most direct and honest policy to address our environmental concerns. Moreover, the tax would reduce road congestion, gridlock and the inordinate waste of time most of us spend on the highways, quite possibly now costing us another 50 billion dollars or more in decreased productivity. Substantial reductions in road rage and frustration therapy would, I’m sure, be much appreciated by our psychological fraternity.
Consumption taxes are always better than income taxes; the latter discourage savings and investment. This direct tax, by common consensus, would be more favorable to economic growth, encouraging the search for gasoline substitutes and fuel-efficient cars, and more research and development spending on alternative fuels.
Alan Greenspan, the former Chairman of the Federal Reserve, has called for higher gas taxes, noting, in one of his more lucid moments, “It’s a national security issue.” The gas tax is an efficient economic policy that is also an effective foreign policy. It will give America more clout as falling gas prices will tilt power and influence back toward the world’s democracies and away from the oil producing autocracies. Higher gas taxes may not be attractive. However, the alternatives are certainly far worse.
We need to plan ahead. To phase in the gas tax would be the softer political approach but would dilute the “shock value” which ultimately will cause the price at the pump to drop by more than the tax increase itself. Instead of us subsidizing world terrorism and its associated anti-American hate-fest, this tax will indirectly ensure our energy independence, a brighter economic future, and ultimately the strengthening of our freedoms. Instead of economic collapse driven by ever increasing gas prices (as predicted by our salivating enemies, including Osama bin Laden), we will be initiating our rebirth as a great and independent nation and a light unto the world.
One Response to “Forcing the Oil Price Lower By Lesie J. Sacks”
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“Why don’t we pay ourselves that extra dollar, that extra 100 billion?”
Because it doesn’t exist, you created it out of thin air when you assumed it did:
“If we add a $1 tax for every gallon dispensed in the USA, then, counter-intuitively, the ultimate price of gas would in fact be forced to drop”
Uh, I’m not sure where you studied counter-intuitiveness, but:
“coun·ter·in·tu·i·tive Audio Help /ˌkaʊntərɪnˈtuɪtɪv, -ˈtyu-/ Pronunciation Key - Show Spelled Pronunciation[koun-ter-in-too-i-tiv, -tyoo-] Pronunciation Key - Show IPA Pronunciation
–adjective counter to what intuition would lead one to expect:
You then go on to make an argument as to why it would be intuitive to expect gas prices to drop. This argument has been made before, and while it’s not directly relative, when viewed strictly from the point of “higher prices” and “less driving”, sure, seems that way. Here’s the problem. Some businesses can’t drive less, and simply have to pass the costs on to consumers, thereby not allowing the price of gas to drop as much as you think. Others have the money to afford it, so the only people who pay this “tax” who will consume less are poor people, the very people who’s consumption is almost %100 for work (the rich spend more on leisure, unless that’s counter-intuitive for you) since rich people will just keep boating, flying, etc. Not nearly the one for one drop you envision, I’m sure.
Two, this in now way shorts those overseas interests of THEIR money, supposedly your main concern, going by your opening paragraph.
“First, the U.S. government would have an extra $150 billion”
You can’t have it both ways. They either reduce usage, which would not take in that much tax, or it would bring in that tax, and not reduce usage.
“with which to increase alternative energy funding,”
which needs no additional funding, since the private sector has massive investments in wind and solar already
“expand safe and environmentally-friendly oil and gas exploration”
This is the job of the wildcatter, not the government. For the government to get into it would be to regulate it to death, because they would have to regulate OUT their competition in order to survive. We have safe and environmentally friendly oil and gas exploration now, but they’re stopped by congress.
“as well as nuclear and hydroelectric power stations”
The only thing stopping them are the greens and all the lawsuits and the regulations put there by William Ruckleshouse and others.
“all crucial contributors to our vital energy independence.”
And none of which should be invested in by the US government unless they own the plants. Not one dime of taxpayer money goes in unless we get ownership complete ownership of it.
“This windfall could further fund Social Security and Medicare and reduce income taxes and our national debt, thus endearing this revolutionary tax to Democrat and Republican consumers alike.”
“revolutionary”? Hardly. Taxing the poor is as old as time. And now, we get to the real point of your desire, you just want a plain old tax increase, and you’re tired of everyone ducking the tax man, so you want to tax something nobody can do without. You want to spend it and spend more of it and when you’re done, you’ll want to raise the gas tax, to repair a road or something, and to buy you more votes.
“Even with a $1 tax hike we would still be paying a third less per gallon than all of Europe.”
Oh, well, as long as they’re paying slightly more than us, great, wonderful, hunky dory and all that, let’s roll out that tax. Give me a break. We USED to be paying about ONE THIRD of what they PAID, because it was mostly taxes. But now, most of ours is going up beause of the monopoly in oil.
“It’s the fairest of all taxes as one pays only for what one uses.”
Fair, in your mind, since those who pay for that nasty old thing called gasoline will pay more for it. Sheeesh, put your hatred of gasoline and all things carbon based away. Got a small fact for you. If we doubled the carbon output of today, about the only major effect you’d see if that the fruit trees will grow in climates they normally wouldn’t have, one season will turn to two, and crop yields would increase dramatically, LOWERING FOOD PRICES IMMEDIATELY, while your plan would increase the amount of food burned as fuel, one years worth to power your truck for a week, was it?
“There has been little public discussion of this eminently rational project, truly an honest and elegant solution to arguably our nation’s most pressing concern”
Because we know a bad idea when we hear it. Eminently rational? In whose opinion besides yours? Honest and elegant solution….hmmm…neither honest, nor elegant, since it doesn’t even address the main problem, which is a lack of supply, but simply taxes those who would buy it, driving down demand, which will drive down the ability to bring new supply online.
In short, your communist solution is, as always, to raise taxes and let the government studies begin! We know how to lower the price of oil. Pass a law that says NO land is offlimits to oil drilling, and yes, even if it’s in the bottom of the grand canyon. Remove any law the EPA ever put into place and then remove the EPA from the face of this earth, preferrably relegating Ruckleshouse and all his ilk to that dustbin of discarded, failed ideas.
No offense, but Alan Greenspan is an idiot, and I’d love to tell him so to his face someday. He, along with the Fed, created the dot.com bubble and the real estate bubble, working with congress to bail them both out will only reinforce it, making the depression last twenty years instead of just a few. In making this statement, he assumes that gas prices will come down with the addition of a gas tax. Well, if this were true, then a five dollar tax would give us free gas. But of course, you guys only do linear math when it’s in YOUR favor, right?
While our economy is stronger than it ever has been, it has been weakened by the Media’s Siren Song of Gloom, weakened by the attacks on our currency by foreigners trying to affect our elections (Soros, et al), and by those who wish us harm. Meanwhile, we haven’t one single congressman capable of stopping them, all because of a few unscrupulous democrats who are trying to defeat George Bush, still.
I bet I could drop the price of oil to thirty dollars a barrel in a week. Want to see the plan?
1) Remove all restrictions from the EPA until they have been checked for junk science. If it’s needed, it’s needed, but if it’s just there to be in the way of building more refineries, drilling rigs, and nuclear plants (according to Ruckleshouse himself), it’s gone.
2) Open the entire USA to drilling, as I said earlier, even the Grand Canyon. Offshore, onshore, deep Arctic, etc.
3) Require each state to find five suitable sites for nuclear power plant development, and set up an internal structure, answerable to a national coordination center, for the upgrade and maintenance of all power wires. Anyone can generate it, and sell it to the grid at that day’s price, same as big producers. Anyone can buy electricity, base price, at any time. The spread between the two goes for infrastructure related to the national power grid only.
4) End all subsidies to farmers for ethanol. End subsidies to all other countries (Foreign Aid)