Topic: Economics
Dealing with High Gas Prices - The Sequel Sure enough, the politicians are at it again. This week cries went out from presidential candidates to Congressional leaders that something must be done to alleviate the ill effects of high gas prices on the economy. Of course, instead of being honest and considering what Washington has done to create the problem, the politicians are focusing on oil companies and a gimmick.by Kenn Jacobine
(Libertarian)
Sunday, May 4, 2008
Sure enough, the politicians are at it again. This week cries went out from presidential candidates to Congressional leaders that something must be done to alleviate the ill effects of high gas prices on the economy. Of course, instead of being honest and considering what Washington has done to create the problem, the politicians are focusing on oil companies and a gimmick.
The gimmick was originally proposed by Republican presidential candidate John McCain and usurped as her own idea by Hillary Clinton. The proposal is to temporarily suspend the federal gas tax during the high travel months of June, July, and August. The concept behind it is to give consumers a break by lowering the price of gas per gallon by eighteen cents. For every ten gallons purchased, Americans would save $1.80. This savings then would allow them to purchase Big Gulps and snack treats, thus providing a boom to the convenience store industry. In all seriousness, the proposal is an election year gimmick – a shell game if you will. The minimal relief that consumers will experience will be more than offset by the inflation caused by the Federal Reserve printing additional dollars to make up for the gas tax shortfall estimated at twelve billion dollars for the three months. So while politicians will take credit for "helping" consumers in their time of need by providing "cheaper gas" this summer they won't mention the hidden tax they are imposing on us through the Fed's inflationary printing of money.
Then there is the more direct focus on oil companies with talk of reenacting our old friend the windfall profits tax (WPT). Jimmy Carter imposed this tax on oil companies starting in 1980 and it lasted until 1988. Carterite candidates Clinton and Obama want to reenact it today to get oil companies to pay their "fair share" and help those hurt by economic hard times. The WPT was and is a tax on business entities that experience both "abnormally high and unanticipated profits". Other than who decides what "abnormally high and unanticipated profits" are, there are two other problems with the tax scheme. First, forty-one percent of oil company stocks valued at over $267 billion are currently held in various forms of pension plans and retirement accounts. As dividends and the share price of oil stocks decrease because of the WPT will Washington implement another program to help retired Americans with the losses or is it believed that they also need to pay their "fair share" to support the less fortunate?
Secondly, as Ronald Reagan use to say, "When you tax something, you get less of it". According to the Congressional Research Service, the 1980 windfall profits tax reduced U.S. domestic oil production by three to six percent. This happened because the tax increased the marginal cost of production, thereby reducing the quantity of gasoline produced. Cutbacks in domestic production now will only worsen the price situation. This, of course, will give Washington another opportunity to legislate and help us again.
So where do we go from here? What is a constitutionally proper course of action for Washington to pursue in dealing with the current high price of fuel? First of all, the U.S. should completely pull out of Iraq. By pulling out of Iraq, we lessen the possibility of a wider Middle East war (e.g. Iran and Syria) and probably lower violence in Iraq because al Quada and Iran will not have the Americans to fight. These developments will calm speculators and stabilize the price of oil.
Next, Congress should move to abolish the Federal Reserve. According to Ron Paul, the Fed has roughly tripled the amount of dollars and credit in circulation since 1990. Because oil is priced in dollars worldwide, by looking at the current price of a barrel of crude one can plainly see the damage done by the Fed's inflationary policies. The high price of oil is directly related to the low value of the dollar. In other words, it takes more dollars to buy the same amount of gas than it did in 1990. Question is: why are the politicians ignoring this issue and proposing a phony gas tax holiday and a harmful to the middle class windfall profits tax?
The bottom line is that we have a better chance of seeing lower gas prices by eliminating speculation, uncertainty, and the political whims of a central bank then we do through fake government gimmicks and schemes. Contrary to popular belief, Americans are not entitled by birth to cheap gas. If we had a true free market and the price of gas was still high, then nature would be telling us something – "supply is low and endangering your environment, so maybe you should use the genius of your species, you know the one you have always used in the past to progress and survive to come up with a new technology to make life happen".
Kenn Jacobine teaches History and English for the American International School of Lusaka, Zambia. Send him email at lovesliberty@gmail.com.
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2008 Kenn Jacobine, all rights reserved.
Published: Sunday, May 4, 2008
Last modified: Sunday, May 4, 2008
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The US has some of the lowest gas prices in the world.
Production of oil worldwide since 2005 has been flat while demand has continued to rise.
There is no free market. Without the US Calvary the settlers in the west would never have survived and subsequent "free market" businessmen would never have been able to extract the oil from places like TX, CA and OK.
Americans from the beginning have invested blood, sweat and tears into building this country and are deserving of the fruits that this tree produces.
Businessmen are no more trustworthy than government. They are more efficient as their aim is profits and the more productive they are the richer they get. But the consequence of that productivity are exploited labor, depleted resources and compromised government. And when the profits run out the businessmen pack up and go home leaving their rotting structures and jobless former employees behind to pick up the pieces.
Tax the "FOUNDATIONS" at a 60% rate. Tax the churches. The only exemption to Foundtions and churches will be the building of hospitals and providing of health care at "capped rates". Apply a flat no exemptions tax rate to the upper 5% of the population that own 90% of all wealth creating instruments. Give a 100% tax exemtion to homeowners who install solar and wind on their property which provides enough electricity to charge a battery operated car. Extend that credit to landloards. Make it a law that no car can go faster than 55mph. Give 100% tax exemption to car builder who use the minimul amount of steal in production and whose engines run entirely by rechargable batteries. Develop a national electricity program owned by the citizens and utilizing only solar, wind, geothermal and ocean power. Offer tax breaks to businesses who encourage and develop extensive work at home policies. Stop all farm subsidies and transfer those subsidies to citizens who garden and grow produce on at least 1/8th of an acre bu nomore than 10 and live within 5 miles of city limits. Stop building roads and reinvest in electric railroads and reinvigorate river, lake, canal and ocean travel and commerce. Abolish the income tax. Cut millitary spending by half. Offer high tax breaks to small nimble manufactures who locate their plants within city limit manufacturing zones. Legalize prostitution. Abolish the drug laws, all of them. Tax recreational drug and liquor sales at a 60% rate. Abolish the Departments of Education, Homeland Security. Abolish all paramilitary departments within police departments. Require every citizen to own a rifle at age 18................................................
MY FELLOW "BITTER", STUPID, WORKING CLASS PEOPLE :-)
If you think like Barack Obama, that WORKING CLASS PEOPLE are just a bunch of "BITTER"!, STUPID, PEASANTS, Cash COWS!, and CANNON FODDER. :-(
You Might Be An Idiot! :-)
If you think Barack Obama with little or no experience would be better than Hillary Clinton with 35 years experience.
You Might Be An Idiot! :-)
If you think that Obama with no experience can fix an economy on the verge of collapse better than Hillary Clinton. Whose ;-) husband (Bill Clinton) led the greatest economic expansion, and prosperity in American history.
You Might Be An Idiot! :-)
If you think that Obama with no experience fighting for universal health care can get it for you better than Hillary Clinton. Who anticipated this current health care crisis back in 1993, and fought a pitched battle against overwhelming odds to get universal health care for all the American people.
You Might Be An Idiot! :-)
If you think that Obama with no experience can manage, and get us out of two wars better than Hillary Clinton. Whose ;-) husband (Bill Clinton) went to war only when he was convinced that he absolutely had to. Then completed the mission in record time against a nuclear power. AND DID NOT LOSE THE LIFE OF A SINGLE AMERICAN SOLDIER. NOT ONE!
You Might Be An Idiot! :-)
If you think that Obama with no experience saving the environment is better than Hillary Clinton. Whose ;-) husband (Bill Clinton) left office with the greatest amount of environmental cleanup, and protections in American history.
You Might Be An Idiot! :-)
If you think that Obama with little or no education experience is better than Hillary Clinton. Whose ;-) husband (Bill Clinton) made higher education affordable for every American. And created higher job demand and starting salary’s than they had ever been before or since.
You Might Be An Idiot! :-)
If you think that Obama with no experience will be better than Hillary Clinton who spent 8 years at the right hand of President Bill Clinton. Who is already on record as one of the greatest Presidents in American history.
You Might Be An Idiot! :-)
If you think that you can change the way Washington works with pretty speeches from Obama, rather than with the experience, and political expertise of two master politicians ON YOUR SIDE like Hillary and Bill Clinton..
You Might Be An Idiot! :-)
If you think all those Republicans voting for Obama in the Democratic primaries, and caucuses are doing so because they think he is a stronger Democratic candidate than Hillary Clinton. :-)
Best regards
jacksmith... Working Class :-)
p.s. You Might Be An Idiot! :-)
If you don't know that the huge amounts of money funding the Obama campaign to try and defeat Hillary Clinton is coming in from the insurance, and medical industry, that has been ripping you off, and killing you and your children. And denying you, and your loved ones the life saving medical care you needed. All just so they can make more huge immoral profits for them-selves off of your suffering...
You see, back in 1993 Hillary Clinton had the audacity, and nerve to try and get quality, affordable universal health care for everyone to prevent the suffering and needless deaths of hundreds of thousands of you each year. :-)
Approx. 100,000 of you die each year from medical accidents from a rush to profit by the insurance, and medical industry. Another 120,000 of you die each year from treatable illness that people in other developed countries don’t die from. And I could go on, and on...
OBAMA AIDE: "WORKING-CLASS VOTERS NOT KEY FOR DEMOCRATS" :o
It's time for everyone to face the truth. Barack Obama has no real chance of winning the national election in November at this time. His crushing defeat in Pennsylvania makes that fact crystal clear. His best, and only real chance of winning in November is on a ticket with Hillary Clinton as her VP.
Hillary Clinton seemed almost somber at her Pennsylvania victory speech. As if part of her was hoping Obama could have proved he had some chance of winning against the republican attack machine, and their unlimited money, and resources.
But it is absolutely essential that the democrats take back the Whitehouse in November. America, and the American people are in a very desperate condition now. And the whole World has been doing all that they can to help keep us propped up.
Hillary Clinton say's that the heat, and decisions in the Whitehouse are much tougher than the ones on the campaign trail. But I think Mr. Obama faces a test of whether he has what it takes to be a commander and chief by facing the difficult facts, and the truth before him. And by doing what is best for the American people by dropping out of the race, and offering his whole hearted assistance to Hillary Clinton to help her take back the Whitehouse for the American people, and the World.
Mr. Obama is a great speaker. And I am confident he can explain to the American people the need, and wisdom of such a personal sacrifice for them. It should be clear to everyone by now that Hillary Clinton is fighting her heart out for the American people. She has known for a long time that Mr. Obama can not win this November. You have to remember that the Clinton's have won the Whitehouse twice before. They know what it takes.
If Mr. Obama fails his test of commander and chief we can only hope that Hillary Clinton can continue her heroic fight for the American people. And that she prevails. She will need all the continual support and help we can give her. She may fight like a superhuman. But she is only human.
Sen. Hillary Clinton: "You know, more people have now voted for me than have voted for my opponent. In fact, I now have more votes than anybody has ever had in a primary contest for a nomination. And it's also clear that we've got nine more important contests to go."
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2008 Kenn Jacobine, all rights reserved.