The dirty little secret about oil

It has taken $100 per barrel oil but now the government can no longer hold back the new technologies that will someday replace oil.  Yes for at least 50 years the government has had a vested interest in keeping oil prices low.  It all comes down to the almighty buck, but not the bucks that Exxon or Shell are raking in, no it comes down to taxes.

So long as oil was priced low there is no interest in trying to figure out a less expensive, or cleaner, way to power our nation and the world for that matter.  Why would car companies work on developing vehicles that operate on different sources of power when a gallon of gas was $1.00?  That development costs money and consumers in the early nineties wouldn’t have paid for it.  So in the nineties liberals, mostly democrats but a few republicans along the way, began to monkey around with air quality standards.  The thinking was to make it so expensive for car makers to meet these standards that they would begin pouring money into cleaner technologies.  This didn’t happen on the scale that environmental movement wanted.  The standards did have an impact, we got vehicles that got fewer miles per gallon with less power, but less polluting.  The benefit of that was that people unwittingly fell for this hook line and sinker.  Gas was still relatively cheap so it wasn’t as big a deal to consumers that they were buying more gas.

Big deal right, well I believe it is.  You now have cleaner cars and that’s makes people feel better.  Great, but if we have to look at the fact that those cars get less mileage than their counterparts from a decade prior.  This results in the need to pump more oil, so our vehicles actually use more fuel but they burn it cleaner however we have to buy more gas.  Now at the same time liberals make it impossible to drill for oil in many regions of our country that have oil thus forcing us to continue to deal with third world thugs like Hugo Chavez, and that Nazi loving pinhead in Iran.

Now on to the almighty buck.  The liberals in this country love to rail against “Big Oil” and how mean they are for gouging us for fuel.  What you may not know is that oil profits are less than $0.10 per gallon.  Yet these oil companies invest all the money to find oil, extract it from the ground, refine it, formulate it with other things that the liberals tell them they have use to make it burn cleaner, ship it to gas stations where you get to go and pump it into your cars.  They do all that to make a lousy $0.10 per gallon and still have to listen to uneducated idiots complain about the price of gas and how they are to blame for it.  Yet between $0.45 and $0.70 per gallon, depending on where you live, is federal and state gas taxes.  Government does nothing to find sources of oil, does nothing to get it out of the ground, does nothing to get it to market.  They assume no risk in the venture but there they are with their hand out for their cut.  So yes with demand for oil up due to government regulation government also gets to profit on the back end as well.  When the price of gas goes out of sight then who’s there bad mouthing the profits of oil companies and complaining about how much money they’re making?  Those same liberals and they tell us they want to take more oil profits but do they ever tell us how much the government profits from the oil business, no.

So with the price of oil up a lot of investment has gone into clean technologies, electric vehicles, bio-diesel, hydrogen fuel cells, etc.  This is fine, I have no problem with these technologies in fact the biggest impediment now to getting these technologies to market is that government hasn’t yet figured out how to tax these things.  But never fear, they will, and whatever source of fuel we use in the future doesn’t matter.  Liberals will create the same circumstances with the next fuel, be it hydrogen or ethanol, makes no difference because to liberals it is all about raising taxes and gaining power.

Technorati Tags: Oil,Iran,Hugo Chavez,Democrats,Republicans,Gas Prices,Taxes

Track The Other White Meat, Federal PORK!

Townhall reports via their February ‘08 magazine that we can now track all government contracts, grants, insurance, federal assistance and loans through the Office of Management and Budget’s website at www.USAspending.gov

We can search from the government agency down or from the recipients up, by city, county and state all the way to the specific transaction. They can no longer hide funding of The Bridges To Nowhere or other Pork like the Museum for Woodstock.

This website was provided by Senator Tom Coburn (R-Okla.) who mandated it with the “bipartisan” Federal Funding Accountability and Transparency Act of 2006 which opened the website in December 2007. Coburn said in a news conference the day it opened that Bloggers were the “key group in getting this done” and told us to “get out there and start using this….I think it’s going to be wildfire.”

I think Tom was trying to tell us in no uncertain terms there’s a ton of Pork to reveal to the American people…what do you think he meant?

Lets get busy guys and gals, through this source we can whittle down big government very quickly when they realize we’re watching them like a hawk…but, we have to actually use this rightful tool and I know for some of you, you’re already at the website.

For those of you who would like a guide to know where to start digging and why, I highly recommend Fred Dalton Thompson’s Government at the Brink: The Root Causes of Government Waste and Mismanagement. ( Townhall Press August 2007 ) 

More FairTax slight of hand

Because of the length of Ian’s comment on the FairTax I felt it deserved a post to fully refute it’s misconceptions.

• Point 1) The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces.

The goal is not to allow the government to confiscate more money.  We need reduce the amount of money that government gets not make it easier to get it.

• Point 2) The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan.

This doesn’t make it right.  A rate of 23% is still much too high and it’s taxation of everything is wrong.

• Point 3) Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

This is not accurate, you make assumptions about the costs of goods going down that will not happen in year  1 and may only begin to happen in year 5.

• Point 4) Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

The assumption that consumption will grow in year 1 is ludicrous. You are looking at this from the perspective of theory and mathematics but you apply no logic to it.  When you start taxing everything at 23% people are going to stop spending.

• Point 5) On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base.

This is not going to happen, states that have sales tax will never change there systems.

The bottom line is that this plan puts out theory and attempts to support it with mathematics that aren’t real and it makes assumptions that are not going to happen.  The cost of goods isn’t going to drop overnight, people aren’t going to wake up one morning with 1.7% more disposable income.  However if this plan goes through people will wake up one morning and have less money to spend because they are paying 23% on top of the original cost of goods.

There will be less spending, which will be followed by job cuts, to be followed by businesses closing, followed by increased inflation.  This will have a horrible effect on the economy for the first 3-5 years.  Yes we may actually get to the numbers you suggest by year 10 but we will have gone through a depression to get there where we will be facing 15-20% unemployment.

This plan doesn’t repeal the 16th amendment so in all likelihood this will be a 23% in addition to all the state sales, and income taxes that we pay today.

This plan does nothing to reduce government spending.  95% of the problem with taxation is that the government keeps spending money like drunken sailors. 

I am not opposed to a complete change to a consumption based tax system but only under certain conditions:

1. Repeal the 16th amendment
2. Mandatory defense spending of 50% of the federal budget.
3. Reduce entitlement spending to 15% or less of the federal budget.
4. Tax rate of 15%
5. Exempts food and medicine as most state sales taxes do today.
6. Includes no prebate where the government continues to confiscate large amounts of income and then decides to dole out small amounts of it back to the people.

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The year of the RINO

It appears that 2008 will go down as the year of the RINO.  For those mind numbed libs that means “Republican In Name Only”.  With high profile candidates in the field like Rudy, Romney, and McCain I didn’t think there was room for anymore RINO’s but it appears I was mistaken.  Mike Huckabee has been surging in recent weeks as he goes the Romney route with extreme makeover Republican Edition.

Huckabee claims conservative credentials but it is common knowledge that basically he appears conservative on abortion but that’s about it.  He, like Rudy, Romney, and McCain before him, seem to have this great love for raising taxes and expanding government.  Earlier this year Jennifer Rubin at National Review Online had an informative article that in light of Huckabee’s recent surge is worth another read.

“By the end of his second term he had raised sales taxes 37 percent, fuel taxes 16 percent, and cigarettes taxes 103 percent, leading to a jump in total tax revenues from $3.9 billion to $6.8 billion. The Cato Institute gave him a failing grade of ‘F’ on its fiscal report card for 2006 and an only marginally better but still embarrassing ‘D’ for his entire term.”

Last month John Fund at Opinion Journal opined about Huckabee and noted .

“I have known and liked him for years; on the stump he often tells the story of how we first met outside his boarded-up office in the state Capitol, which had been sealed by Arkansas Democrats who refused to accept he had won an upset election for lieutenant governor in 1993. But I also know he is not the “consistent conservative” he now claims to be.”

Not exactly a ringing endorsement but the opinion of Huckabee’s “consistent conservative” creds continues to get worse Fund went on to report:

Betsy Hagan, Arkansas director of the conservative Eagle Forum and a key backer of his early runs for office, was once “his No. 1 fan.” She was bitterly disappointed with his record. “He was pro-life and pro-gun, but otherwise a liberal,” she says. “Just like Bill Clinton he will charm you, but don’t be surprised if he takes a completely different turn in office.”

This is not what the Republican Party needs, this is not what the country needs.  We have had nearly seven years of no conservative leadership.  While President Bush has done mostly great things with regard to terrorism and dealing with the threats ignored in the Clinton years he has been a disaster in terms of spending and reducing the size of government.

They biggest problem with Romney, McCain, Rudy, and now Huckabee is that they are simply light versions of Hillary.  Rudy on social issues, Romney on Healthcare, McCain on immigration, and Huckabee on taxes.  Hillary recently noted that this country can’t afford all the ideas she has, she’s right but we also can’t afford to allow conservatism to be redefined to try to run towards the middle, we don’t win elections in the middle, we win elections when we are true to the conservative principles articulated by Ronald Reagan.

Hugo threatens $200 oil

Hugo Chavez, left wing dictator of Venezuela, warns the United States of oil reaching $200 per barrel if the US attacks either Iran or Venezuela.  However let’s look at a few facts on the subject of oil in Iran and Venezuela.

Both Iran and Venezuela are economically isolated countries, Iran’s economy is in shambles, it’s infrastructure for pumping oil is not well maintained and it is controlled by the Iranian government.  If Iran would modernize (or allow outside companies to do it for them) then more oil could be pumped.  Venezuela has had socialism thrust upon them and Chavez is taking every nickel he can squeeze from oil and fund social programs.  The problem with this is that he to is not maintaining his ability to pump oil.  He has taken over all the oil interests for this country and doesn’t allow private companies to invest in the needed upgrades to bring more oil out of the ground.

So with both of these large oil producing countries so screwed up how can we avoid $200 oil anyway?  Shouldn’t we work to remove these thugs that run these countries so that the oil that drives the world economy can be pumped from the ground?  Yes I know a war would drive the price up in the short term but fixing the infrastructure would allow both countries to produce two or three times their output today and this would bring the price of oil back down to the $35 or $40 range.

Granted this only solves half the problem.  We also have to remove the socialists from power in the US.  The environmental movement, and current far left wackos in congress are probably a greater threat to the United States than Hugo or Mahmoud could ever hope to be.  All the oil in the world means very little if it can’t be refined and our refining capacity hasn’t changed much in the last 20 years.  We import roughly 3.5 million barrels of refined product every day.

So I say fine, let’s remove both dictators and get on with the war.  The sooner we do it the sooner we restore balance to the world, the sooner that we will see added growth in the world economy, and oh the byproduct that no one seems to care about the sooner that millions more people in Iran and Venezuela will be free from tyrannical dictators.

Congress proving why its approval rating is lower than Bush

Fed Chairman Ben Bernanke testified before congress today that he doesn’t think additional rate cuts are necessary right now.  Liberal Senators Charles Schumer, senior liberal from New York, and Sam Brownback, the liberal RINO from Kansas pressured Ben Bernanke to cut rates further, faster, etc.  So what’s the big deal you ask?

“When those gas prices get up to $3 a gallon, it seems to hit some sort of psychological point in consumer’s mind that ‘I have less to spend,’ and that’s a reality for them.” - Sen. Sam Brownback (R) Kansas

“I’m very concerned that there may be a bigger storm on the horizon,” - Sen. Charles Schumer (D) New York

So if Senators Schumer and Brownback are so concerned about people having less to spend then why push for a rate cut that will have little effect on consumers  immediately, why not do something that will affect everyone.  Cut the gas tax, I know we can’t do that because after all Government never has to do with less, only hard working people do.  Don’t believe me, here’s the proof….

Coincidently today the Senate voted 79 to 14 to override President Bush’s Veto of a $23 Billion water resources bill that he believed was too expensive.  The fact that President Bush found a spending bill too expensive is news by itself, but congress, in spite of what former Fed Chairman Greenspan has preached for decades, voted to Override the President and spend $23 Billion tax dollars that came from the pockets of hard working people.

Somehow the AP thinks that it is a negative for a branch of government to exercise a rare instance of fiscal restraint:

President Bush suffered the first veto override of his seven-year-old presidency Thursday as the Senate enacted a $23 billion water resources bill despite his protest that it was too expensive.

Now I will take the occasion to commend Sen. Brownback because he voted to sustain the veto.  However after the preaching about the bigger storm on the horizon for the American people Sen. Schumer didn’t think it was big enough to keep him from voting to override the President and spend, spend, spend.

And now we know why congress’ approval is nearly half of what the President’s is.

Technorati Tags: President Bush, Congress, Sam Brownback, Charles Schumer, veto, Bernanke

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