My Economic Theory on Oil
Here's my economic theory on oil. I do not guarantee that all parts of it are correct, but it seems to make logical sense to me.
The government spends a significant portion of money on subsidies for the oil industry ($11.9 billion in 1995, excluding the cost of protecting Persian Gulf supplies). This has created oil prices that are much lower than in the rest of the globe. I believe that the US government should eliminate all subsidies directed at the oil industry entirely (something similar to this was advocated by Dick Cheney in the 1980s). Furthermore, I believe that all federal gas taxes should be eliminated, if not a constitutional amendment banning all gas taxes: federal, state, and local. This would essentially make gasoline in the US track world oil prices nearly exactly. Due to the cut in subsidies, gasoline prices would increase dramatically, and they would become much more volatile to the consumer. If these actions were carried out, it would also be essential for the federal government to return all money saved by the elimination of oil subsidies to taxpayers. Through this system, people would theoretically still be paying the same total amount of money on average (instead of paying money to the federal government to pay the oil industry through subsidies, they would just pay the oil industry directly), although gas prices would be much higher.
My advocation of this system is largely due to its psychological effects. People would think they were paying more for gas in general because the gas prices would be higher. As a result, they would become much more conservative in their gasoline usage, and overall consumption would probably go down. The additional price volatility would also encourage this. Cars would become much more efficient; we would not have these Hummer H2 things, whose existance I simply can't understand. The shock of skyrocketing oil prices would speed development of alternative fuel resources. I am a ardent believer in the Republican policy of free-market economic incentives, and this would help disengage the role of the federal government in advancing innovation while forcing it upon industry. Hopefully, in this process oil companies would either die or transform into "energy companies" that would develop new forms of efficient technology and energy. The alienation of oil companies by the federal government would also reduce possible corruption by government "being in bed" with industry. And maybe someone would discover practical fusion technology along the way... So there you have it: my latest thoughts on the topic of economics and the like.
You theory is boondoggle!
It's like saying we should start killing random people so everyone will start treating their lives like the precious and unique things (better word, anyone?) that they actually are. Nevertheless, maybe that idea has some merit. Let me get back to you on Monday. Also, if you want to stay alive, increase your chances by staying home over the weekend.
But seriously, isn't your theory like terrorism? Bring problems to the people so they will deal with them.
They're just going to violently riot.
Well, in theory, this idea of laissez-faire economics with oil sounds excellent, but in reality it probably wouldn't work. Obviously, people would never let their government raise gas prices: how to lower them has already become a campaign issue. Secondly, the prices you see at the pump include the tax, right? If so, and the price at the pump does increase, then they'd be paying more for gas, regardless of taxes.
Although this theory is the perfect marriage between Republican free-market solutions and Democrat separation of leadership and industry, it wouldn't work for simply that reason: by compromising, you get something that no one would agree with. It might be nice, but it's not gonna work.
Theoretically, the average consumer is paying no more or less for their gas. All taxes and subsidies would be cut from the government budget, and these savings would be passed on to people in the form of a permanent tax-cut; i.e. instead of money going to the federal government and then to oil companies as subsidies, people would just pay oil companies. But the brilliant part is that people would think they were paying more, or at least it would feel like it because the prices at the pump would be higher. Thus, there would be more incentive to develop clean and efficient technology. In fact, people would probably be paying less because there would be no gas taxes. As for your point on feasibility, you're very right. People just don't realize what's good for them. It's a compelling idea though that plays off Dick Cheney's ideas from the 1980s.
Well, we're not all paying the same for gas specifically, because we all pay taxes toward the subsidies whether or not we use gas. To say that because our taxes would lessen because of this is too much of a stretch.
And if this idea were to be implemented, then we should go all the way: make oil companies pay for Middle East stability and oil field protection, not the government. Libertarian ideas are already so radical that pushing them even further hardly makes a difference.
On the topic of oil, I recently found out that our wonderful president made a deal with someone like the Saudi Arabian prince to increase oil shipments exactly 2 weeks before elections to lower gas prices. Aren't politics sickening?
Kiva what are you talking about!? George W. Bush is a great man who has led our country out of the liberal mess that was the 1990s. His ideas on economics, abortion, gay marriage, and especially foreign policy have been a godsend to every person in this great nation.
Adam, sometimes sarcasm is just sick.