By accessing this website, you acknowledge that Edmunds and its third party business partners may use cookies, pixels, and similar technologies to collect information about you and your interactions with the website as described in our
Privacy Statement, and you agree that your use of the website is subject to our
Visitor Agreement.
Comments
If we are already importing upwards of 60% of our crude oil. It doesnt take rocket science to see the "savings"(54 miles per year average) is literally a drop in the bucket on the HIGH SEAS of crude oil importation. This of course is the bad news. The worse news: that is using the assumption that we can maintain the remaining 40% of domestic production.
Change from:
inbetween TO in between
4,8000 TO 4,800 miles
Percentage? Structural or situational? Again it would be indeed interesting if it was the AVERAGE, which you indeed admit is NOT. So again to put a percentage to the average of 54 miles that is between .0036 to .0045 % percent (less than one half of one percent. This of course is a very far cry from 20%. Indeed it is 44x-56x's away.
I would admit that the miles I have been able to shave off the family's commute is indeed NOT average 12,000/12,000=100%. In those terms, that is 40% less. But in truth, I do not think anybody is grateful nor even do they know or more importantly, care.
Indeed not only is the licensed driver population increasing, but so is the passenger vheicle fleet, current registration is app 235.4 M vehicles.
The military in the middleast is not a mechanism to ensure oil supply (even in the height of Islamic hysteria in 1979, Iran still sold oil to the west), but a mechanism to support the US Dollar (federal reserve notes and its electronic equivalent). If Japan, China and India don't have to get their hands on the US Dollar in order to buy oil, they wouldn't need to buy much US Dollar at all, so the thinking goes. When they stop buying, the US Dollar would collapse and there goes the gravy train for all sorts of government programs. In other words, the military, as a branch of government, is tasked to do what the government is most keen about: perpetuate and aggrandize itself.
As far as China is concerned they didn't become more prosperous by reducing the size of their government. They simply adopted different market driven economic policies and seem to pretty effective at government driven currency manipulation.
What market driven-economic policy would there be except for restraining the government itself? The government accounted for close to 100% of GDP in China in 1976 as the government owned every thing and private enterprises were literally banned. Today, the government there account for 45% of GDP. That's quite an impressive improvement, although not quite as good as the US yet, currently standing at about 30-40%. If the US government budgets at all levels can half in the next 30 years down to 15-20% level, we'd probably enjoy fast economic growth just like the Chinese have been.
The problem with breaking down the firewall limiting gasoline tax to highway use is that gasoline tax then would become yet another source of general revenue; i.e. money for covering boondongle expenditures. We already witnessed what happened to payroll tax, and how quickly it grew. A new category of tax will not simply replace old tax. New tax (new in the sense that it becomes available for general spending) will just be more fuel for the food fight that goes on in the lobbies of the Congress.
how many of these people will maintain their hands-off position if a disruption in our oil supply causes our economy to collapse?
Those who feel especially vulnerable to high oil price can buy futures and options contracts to protect themselves. Remember the New Orleans flood analogy that you brought up? Just like in that instance, the private sector is quite capable of getting cars to get out of town if not building homes on high ground to begin with (the French Quarter, which was no flooded). It's the government promises of levee and bussing on top of building projects where they should never have that leave thousands of people stranded.
We have seen this applied at the local level for literally years but this one takes the cake and should be a warning to those who advocate increased taxation.
It has been common knowledge and practice for a very long time that the CA legislature has used monies earmarked for so called transportation purposes as the petty cash piggy bank for various (other than transportation) pork loin projects.
Anyway a local sales tax increase (CA state sales tax can be as high as 8.75%) was advocated for a specific transport project purpose with its use for any other purpose EXPRESSLY forbidden. It was voted in due to the fact they had voted the majority down from 66.67% to a simple majority. Well.... it seems like the local transportation agency that was responsible for administering the money got into "fiscal" difficulty! (like this is some surprise) So they of course targeted this (billions) dollar amount for use. Of course there was a big uproar. It was taken to court and the logic they used was if the agency went bankrupt, at the very worst there would be no qualifed agency to administer the project and so could not fulfill the charter if it went bankrupt. So therefore let us borrow the money to keep us alive so we can adminster the project!!!??? You will never guess what happened.
So I am glad you agree with me that most folks do not care.
So I have no problem with folks passing hot air. What I am saying is whatever you think is happening probably is not.
Like I said, does a 1% drop in a normal 3/4% yearly GROWTH RATE mean you are actually lowering the consumption of unleaded regular/premium from year to year?? If you do then you now understand why I refer to it as hot air.
..."So again to put a percentage to the average of 54 miles that is between .0036 to .0045 % percent (less than one half of one percent."...
So say we agressively shave 54 miles per year off our average yearly miles. How long do you think it would take to eliminate 60% of the importation (again assuming we can maintain the 40% domestic production? How about: .60/.0036= 167 YEARS
!! Woo Hoo!! Can't wait.
"Well the Constitution does recognize the government's role to provide common defense and promote general welfare of the US. It's not a stretch to say that energy self sufficiency would fall under both categories."
"common defense and promote general welfare" are in the pre-ambles of the Constitution, not in any article giving the government power. The phrase immediately after these two you quoted read something like this: " and to secure the blessing of liberty on ourselves and our posterity," obviously that does not give the government the right to estalish any state church to secure such blessings. In fact, the Constitution explicitly bans standing army . . . a pretty severe blow to any statists' dream of having a free hand at "common defense" ;-)
The founding fathers understood it quite well that the best way to achieve common denfense and general welfare is to put limitations on the government.
Let's stop the sniping now and get back to the subject please.
I don't think anyone here is stating otherwise. An increase in gasoline taxes will not be used for transportation related programs. It will be used to offset a decrease in payroll taxes and will pay for the same boondoggles that these payroll taxes are currently paying for, no more, no less. Its just a matter of whether you prefer consumption taxes to payroll taxes? And its also a matter of considering the consequences of a tax. If it discourages a behaviour is it better to discourage gas consumption or making money. Saying that you'd rather have no taxes isn't a realistic option so choose, gas tax or payroll tax. If you can't entertain the idea of revenue neutrality then there is no point in answering. It's funny, people look at the increase in a gas tax as equating to higher taxes. Why don't they look at the decrease in payroll taxes and equate that to lower taxes. If you state that the government is incapable of cutting taxes then you're wrong, they've done it before. If you can cut taxes you are certainly capable of keeping them at the current level.
It seems the best argument people can come up with against a gas tax is that it will result in higher overall taxes, bigger government and more waste. Okay, I get it and I realize you won't change your point of view in this regard. Indulge me in a hypothetical situation. Assume you could be convinced that the government was capable of implementing a revenue neutral tax shift, would you then support a gas tax? If not, why?
The founding fathers did collect taxes and George Washington himself used the military against US citizens to do this.
What are your thoughts on patents? I realize that in your mind the government has no legitimate role that can't be provided better by the private sector and the free market. How would patent registration and enforcement come about in your no government society? Without patents would individuals or corporations still spend large amounts on R&D. I'm guessing no. How would this impact the drug manufacturers that are searching for new cures? If the private sector administered this patent system they would be required to enact laws that they could now enforce. Sounds like a government to me.
In a previous post you cited that China's government is smaller than it used to be as a percentage of GDP. I'm guessing that's a result of their economy growing, not government getting smaller. When their government accounted for 100% of GDP did they actually shrink the size of government, which allowed the economy to grow? I'd prefer to measure the size of government in per capita dollars spent. Since China's economy is growing at 10+ percent a year your methodology would allow their government to grow at 9% a year and still seem like it is shrinking.
I think the idea is ok. If you remember back to 9/11. We found out as a country that many Federal agencies did not share information. If they are unwilling to share information do you think they would share money? When the gas tax agency is flooded with revenue from the buck a gallon increase do you really think they will transfer that to the IRS to make up for the shortfall? I don't see it working that way.
It has the added stigma of taxing the poor more than the rich. Your maid is still stuck in a 1985 mini-van getting 15 MPG at best. She still has to drive from the ghetto to your McMansion. Are you going to want to give her a big raise to pay for the added cost of gasoline? As much as consumer tax instead of income tax would benefit me, I think it is a bad idea.
Or perhaps I am just sore, because I am not making 100 M per year from these efforts!?
Let me also point to the efforts against LNG facilities down in SO CA. A very famous actor has taken up the cause, for it is too close to his home in the very pricey and toney area called MALIBU, CA.
The argument that the poor drive the least efficient cars is a red herring. Anyone can go out and pick up a 10 year old Toyota Corolla or Honda Civic for a couple thousand. If you can't afford that then you probably can't afford your insurance or maintenance so the price of gas becomes irrelevant. The people driving their full sized SUVs and Trucks seem to be the ones with the most sympathy for the poor when it comes to higher fuel taxes. Interesting.
Indeed with taxes on 140 billion gals of fuel the situation/s is/are ripe for almost wanton total abuse. I mean really, do you think the system would miss it if YOU stole 1M dollars?? Or how does an Alaskan contingent get a multi million dollar if not multi billion dollar bridge to no where?. Or what is in a national park latrine facility that costs 450,000 dollars??
This is a true story. At one point in my young life, I was the receipient of a brand new multimillion dollar facility. (fed gov) So by direction; as the end user, I was tasked with operational inspection. Well I really wanted to make sure we got what we wanted/needed, so I wiggled my way onto the pre bid meetings and at key junctures in the process. The truth is not many folks pay attention to the latrine facilities, but the building was being built in a Florida swamp, so for some reason, the specifications caught my eye. Essentially what was proposed was a (in 1977 dollars) a 250,000 dollar, so called bio degradeable waste system. This dollar value of course got my attention anyway. The toilet paper used had to have a SPECIFIC NSN or national stock number, no Sams Club 36 pack!
No not at all. You're read loud and very clear! You just ascribe a purity that is just not there (if it ever was). But then again, I might ask; are you one of those who are making the 100 M that I spoke of?
Off topic, I do not think you really understand that Congress has legislated (a long time ago) the working folks pay the majority of taxation (determined by AGI). It actually took a repub like Bush to make inroads, for the rich to start paying more. Clinton (a few adminstrations ago) of course said to tax the rich!! Everybody agreed!!! Good concept eh? Then people like YOU and me were declared rich.
Not exactly true. The first President Bush raised the federal fuel tax by a 5 cents a gallon for the purpose of debt reduction.
I thought that my reason for advocating higher fuel taxes was pretty obvious. It has zero to do with highway construction or maintenance and everything to do with discouraging the use of fuel. After all, this is an oil dependence thread. We discourage speeding, running red lights, littering, etc. by imposing fines. Same approach here but in this case its benefits go beyond the deterrent value. It also encourages the development of alternatives. If your position is that, as a country, we shouldn't be pursuing alternatives to oil or even reducing consumption then we are definitely going to disagree. If you believe that we can leave it up to the individual to do what's right then we also disagree. However, if you believe that it is a goal that the government should promote then what is a more effective and expeditious method than a sizeable fuel tax?
I'm definitely against big government but if I have to pay taxes, and I've accepted that I do, I would like for the this act of paying to generate some positive consequences. In the case of fuel taxes it can. In the case of income taxes it doesn't, unless you consider wealth re-distribution a worthwhile goal. I'm convinced that if/when this country becomes energy self sufficient the impact on our economy will be very positive. If I'm correct then from a totally self serving, prosperity perspective we should be pursuing this goal very aggresively.
The rich have always paid more as a percentage of AGI. Here's a table showing what the percentage was in 2000 and 2004. A good way to compare Bush to Clinton in that regard. Actually you'll find not much difference.
http://www.taxfoundation.org/publications/show/1850.html
False. It was! The "not exactly" was when they did the logic end run as I described in past posts. Again that is the true danger and wanton abuse which you fail to acknowledge. I truly do not fault your intentions.
For lack of a better analogy governments should be like a referee. They have morfed into being major players.
During the Clinton Administration there was a biggie 2.5 R and D program where as I understand it, each was given the mandate to come up with high mileage engine prototypes. Blank SHEET. 1.5 BILLION dollars was allocated to this program. So each oem got in effect half a billion!!! All three (independently) came up with high mileage diesels. (70-100 mpg)
So do you see any high mileage AMERICAN new engine high mileage diesels coming to market? All the epa has managed to do is to downgrade the estimated city/highway mpg on new cars!!?? Your tax dollars in action. Or should I add OUR tax dollars.?... But surely I misspeak as there are book shelves full of documentation and 2 prototype engines each for 6 prototypes sitting somewhere SAFE!?
"Income Taxes Paid as a Percentage of AGI"
The US government is primarily financed by personal and corporate income taxes. The share that they take from us hasn't changed all that much since 1945.
I have never contended that our government spends our money wisely. In fact, I'm sure they don't. I believe in a minimalistic government. One that only provides those services that cannot be provided by the individual or by more local governments. However, energy independence is of national importance and, IMO, qualifies as one of the rare exceptions that the federal government should get involved for our collective best interests. Would I throw R&D money at companies to come up with a prototype? No, but if I could create an environment where market forces pushed for a desired objective then that would be a relatively efficient method. Am I an advocate of governments manipulating the market? Not really but in a situation that involves national and economic security an exception can be made. Afterall, they already manipulate the market for causes that have far less, if any, urgency. I mean do we really need home mortgage deductions?
This is an interesting question but it might be far afield from our oil dependence discussion. But I think the revenue generated is considerable as in the more on topic oil dependence.
I mean look at it this way, who would not want this action: give me 1 dollar and I will give you .30 cents in return.
When their government accounted for 100% of GDP did they actually shrink the size of government, which allowed the economy to grow?
That's exactly what happened. Mao's economic policy was government central planning down to the last screw or stalk of rice (or wheat or corn). The government told farmers (organized into massive communes) exactly what to plant, and factories exactly what to produce. Private enterprise was banned. The result was repeated famine and nationwide poverty. The currency was quite worthless because commodities, even bread and meats, could not be purchased without government issued coupons to each household. Black marketeers were punishable by prison terms and even death. After his death in 1976, the new ruler of China (Deng) instituted economic reform, the crux of which was getting the government out of micro-management. The farm land was divided into lease-holds, and farmers were allowed to grow what each farmer household deemed appropriate; followed by legalization of private commercial and industrial enterprises. Black markets disappeared within a few years as basic necessities became abundant and laws banning black markets disappeared; eventually the bureacrats for administering the coupon system were pensioned off as the coupons became irrelevent. Back in 1976, farmers accounted for about 80% of Chinese population, so the reduction in government control on farms was a drastic reduction in government power; obviously that reduction in government power had to take place before farmers were willing to or allowed to plant what they wanted, and prosperity did not come until at least a planting season later. In reality, it took a few years for farmers to actually believe that the government was letting go the power of control, and dared to venture out to work their land and crops like their own without fear of seizure by the government like any equal-result government is prone to do to successful subjects.
Since China's economy is growing at 10+ percent a year your methodology would allow their government to grow at 9% a year and still seem like it is shrinking.
The size of government has to be measured by per centage of total control it has over the economy. If the US government can be limited to grow at a consistenly slower rate than the economy, we'd all be happy campers . . . because at that rate, eventually the government would be miniscule compared to the economy. On the flip side of the coin, by that same measure, a government like Pol Pot's murderous regime would still be a terrible regime even if it gradually lost the total amount of power it wielded as it destroyed the economy in general at an even faster pace.
Well what kind of return on the dollar would you say we are getting for national defense?
Simple formula here: our dependence on oil will continue until mitigated by either devastating market fluctuations, caused by whatever conditions one wants to cite, or by representative action of public sentiment.
In the short haul to infuence the long haul, I like a little bit of representative action.
That's what most people would think, but quite a lot has been happening while we are not watching :-) After personal income tax (about 40%), the next biggest share by far is payroll tax (about 35%); corporate income tax is much smaller at 11%.
I believe in a minimalistic government. One that only provides those services that cannot be provided by the individual or by more local governments.
That limitation alone is not quite enough. Additional qualifiers have to apply:
(1) the service is absolutely necessary; not just "nice to have" but absolutely necessary.
(2) the service is clearly definable and feasible.
(3) the cost of rendering such service is substantially less than cost of if such service is not rendered at all.
Energy Independence fails all three of these tests. There simply isn't a good defnition of "energy independence" at all. "That we do not import any oil" is not a workable definition. Why isn't "food independence" a more worthy goal? or "computer-parts independence" or "clothing independence"? The whole idea runs counter to economic efficiency: letting people buy from the lowest cost source. The whole national security argument is rather farcical: at $80/bbl, coal can be turned into oil, and we have practically unlimited amount of it; Texas and Penn wells can be re-opened and sustained at war time at much lower price point.
Instituting a tax so that energy price is so high as if a complete shutdown of world energy trade has already taken place is even more farcical. It's like, fire prevention by burning down the house yourself so there's nothing left for any accidental fire to burn :-)
The private market place has a very good set of mechanism anticipating contingencies: those who feel especially vunerable to energy price can buy futures and options contracts; those who underwrite these contracts have a very strong incentive to come up with a way to deliver energy at reasonable price. Government intervetion only serves to disincentivize the purchase of those insurance policies, and take money out of the underwriters via taxation so that they have less money to put towards research backup plans.
Indeed and the whole system depends on .... OIL !!
You've made it abundantly clear that you oppose a shift from income taxes to consumption taxes. I just don't see how that represents support of less government.
BTW, it seems to me that China very much uses taxes to influence what people buy. With the rapid growth in China's energy consumption I think it is very likely that you will see them impose significant fuel taxes. Will that slow their economic growth? Probably, but it will be only temporary and in the long run it will allow for sustained growth.
Well what kind of return on the dollar would you say we are getting for national defense?"
Again a good question, but a bit afield from the oil dependency thread.
Also it depends how (your view) national defense is viewed.
(1) the service is absolutely necessary; not just "nice to have" but absolutely necessary.
(2) the service is clearly definable and feasible.
(3) the cost of rendering such service is substantially less than cost of if such service is not rendered at all.
Energy Independence fails all three of these tests
I guess I agree with your qualifiers only I believe energy independence passes all three.
I read today that Al Qaeda is calling for its supporters to attack US oil interests. Let's say they are to be taken seriously. Should we spend any money protecting these oil interests? If so how much?
Your continued reference to $80 oil from coal is only valid if its standing by ready to go given a severe disruption. I don't think it is. What would be the price tag for an extended period where our oil supply was disrupted. I guess it all depends on how long the period was and the extent of the disruption. Imagine a worst case scenario. That is the value of energy independence. You can't rely purely on the free market when you are talking about something which is vital for survival. Besides, any market that gets around 35% of its supply from a cartel isn't all that free.
Not really. I believe our vulnerability, when it comes to oil is very much an issue of national security. You somewhat posed the question of why would someone give $1 to get 30 cents back? Sometimes what you get back for your investment is not easily quantifiable. I simply used our defense budget as an illustration of that point. What is the return on a 2 billion dollar stealth bomber? Its tough to say. People have actually tried to measure the financial return resulting from energy independence. For instance the reduced military spending, the significantly reduced trade deficit, reduced impact on the environment, etc.. Not even taking into consideration the security aspect it ends up being a good long term investment.
Rocky
You've made it abundantly clear that you oppose a shift from income taxes to consumption taxes.
I oppose the fact the proposed "shift" is just a cover for opening up a new revenue stream in order to get an overall increase in taxes. IMHO, it may well happen that some form of consumption taxes will take place; that's the second part of the Roth IRA scheme . . . those who put after-tax money into the accounts will see their money taxed yet again when they retire. That's one of the most common tricks the government screws you; the more "shift" the more screwing you end up getting.
BTW, it seems to me that China very much uses taxes to influence what people buy.
Tax collection in China is still very rudimentary. The primary form of government control there is still outright command and regulations; government still employ about 40% of the non-farm work force. Up till now, they subsidize fuel price as part of their socialist past legacy.
Actually not tough at all. For example, WHERE the sub parts are made (where ever) the local effect is an 8-1 multiplier. So it is very easy to see why local governments, economies, etc. vie to get a piece or all of the action in their baley wick. On a strategic level or war fighting level, machineries such as a stealth bomber are force multipliers. So therefore (whatever) has a real world component calculation about the logistics it replaces. It might be a tad bit arcane for this discussion however.
.."You somewhat posed the question of why would someone give $1 to get 30 cents back?"..
Let me make it clear that it was YOU who raised the question of whether or not we needed/wanted a mortgage deduction!! I was just putting the numbers to it. :)As you can see it is indeed profitable.
..."I believe our vulnerability, when it comes to oil is very much an issue of national security"..."
There is a new majority, that obviously does not share your views.
(I hear on the news) I have it on good authority, some high placed new leader (speaker of the house?) say/s no more blank check/s for President Bush.
Is the latest Al Qaeda proclamation really news-worthy? Bin Laden has been calling for $300/bbl oil since at least 1993. I guess that makes him a hard-core environmentalist, eh? :-)
Bin Laden is a bit rusty on economics. Saudi and Iranian governments sell oil to the west not as charity but due to their need to pay their own government programs. Any wonder why both Saudis and Iranians cheat on their OPEC quotas? Even if Bin Laden were in charge in either country, they'd still sell oil to the west. The real difference is whether they will take US Dollar for it. The fight is over the US Dollar, the tool with which the US government can run its own domestic programs and help its own favored parties in any domestic and international conflict. Oil just happens to be the medium through which Japanese, Europeans, Chinese and Indians are currently forced into buying the US Dollar. If technology exists today that makes every country oil-independent, that would be the end of the petro-dollar system. That's why the sole purpose of US government spending on alternative energy research has to be preventing the rise of any viable alternative energy technology (by misdirecting brains and funds). When Germany was in a real hurry to get alternative energy source in WWII, they turned to coal and was producing massive quantities of it within a couple years or less. Only allied bombing destroying these conversion plants stopped them in their tracks.
Your continued reference to $80 oil from coal is only valid if its standing by ready to go given a severe disruption.
Oil price went to >$72/bbl in the fall of 2005, rising from $9/bbl in 5 years. No economic catastrophy took place as consequence. That's $63/bbl rise in 5 years. How much difference would an addtional $8/bbl really make? Not much is my guess. So long as the government does not get into the business of price control, the market place is quite capable of prioritizing using the price mechanism.
Really? I'd always thought that energy independence was more a part of the Democrat's platform than the GOP's.
(I hear on the news) I have it on good authority, some high placed new leader (speaker of the house?) say/s no more blank check/s for President Bush.
Yeah, I'm aware of that. That's what people in DC are good at, stating opposition without offering alternatives or solutions. That's not a criticism of any particular party, it's a criticism of partisan politics.
(1) the service is absolutely necessary; not just "nice to have" but absolutely necessary.
How is "energy independence" absolutely necessary when $72/bbl resulted in no major economic catastrophy and $80/bbl would bring in practically unlimited oil supply from coal conversion. I'm not even talking about re-opening old domestic wells that got shut down when oil fell below $30/bbl.
(2) the service is clearly definable and feasible.
Please define what "oil independence" is, and how can it possibly be achieved without forcing consumers of oil to give up their freedom in purchasing from the sources that they desire either due to cost or quality reasons.
(3) the cost of rendering such service is substantially less than cost of if such service is not rendered at all.
Cutting off domestic consumers from worldwide supply of energy is essentially forcing the consumers to suffer a man-made disruption. Seems to me the cure is worse than the disease, or at least just as bad.
Imagine a worst case scenario. That is the value of energy independence.
In other words, the value of energy independence is imaginary. We already witnessed $72+/bbl, and nothing catastrophic happened as consequence; how much worse can $80/bbl be? The long lines and strifes that we saw in the 70's were result of government rationing. Long lines and strifes always take place when there is government rationing. Ask Russians who lived under communist party, or North Koreans today. North Korean's paramount policy of "Self-Sufficiency" ("Jeju") doesn't seem to have solved the problem of long lines, or for that matter, a collapsing economy.
Besides, any market that gets around 35% of its supply from a cartel isn't all that free.
Yet the "cartel" members cheat on each other all the time. Since your post started by quoting Al Qaeda, Bin Laden's view is actually that Saudis, Kuwaitis, Qataris, Mexicans, etc. (accounting for roughly 80% of OPEC output) are really moles planted by Americans.
The whole logic of "since it's not entirely free why don't we make it all the more repressive" is quite flawed. By that logic, since disclosing classified state secret is against the law, why don't we outlaw freedom of speech altogether?!