Every time that gas prices jump, a certain percentage of our fellow voters contact their congressmen, and demand that action be taken to correct the situation. Often, there is talk of boycotting the oil companies in order to “force them to lower their prices.”
Even though gasoline prices are now, on average, about 20 cents a gallon less than they were just two months ago, and roughly 50 cents less than they were three years ago, one of the Republican politicians in Iowa last week promised to bring back gasoline that was priced at $2.00 per gallon.
For a lot of reasons, that simply doesn’t make any sense, and the link immediately above provides more details on exactly why it doesn’t. For starters, though, the United States actually has very little control over the price of oil, and even the expansion of off shore drilling will have little, if any, effect on the price of oil
If you need a reason to say “no” to more offshore drilling, read the article posted immediately below:
drill,baby,drill
The Deepwater Horizon oil spill in 2010 was the largest accidental marine oil spill in the history of the petroleum industry. Because the accident happened in the Gulf of Mexico, the cleanup efforts were somewhat easier. However, if it had taken place in a colder climate (such as near the Arctic National Wildlife Range) clean up efforts would have been much more difficult.
As a country, we consume 25% of the world’s oil, but have only 2% of the world’s reserves. No matter HOW much we drill, we’re going to be short of oil unless we starting using a LOT less than we are now.
The one component of gasoline prices that we DO have control over is the 18.4 cent a gallon Federal Tax, which is due to expire on September 30. The tax has remained unchanged since 1993, and it is used to support the Highway Trust Fund, which pays for road and bridge repairs, as well as mass transit systems. The Highway Trust Fund has been under a lot of pressure for a number of years, and currently has a backlog of $72 billion, and that’s just for bridge maintenance and repairs.
Even if you add in state taxes to our gasoline bills, the total tax per gallon works out to around 43 cents, considerably cheaper than the $4 a gallon tax that is levied in Great Britain.
To repeat myself a little, if you need a reason to not only extend but to INCREASE the federal gasoline tax, watch the video below, which was taken in Minnesota in 2007:
London Bridge is falling down
Speaking of taxes, though, there’s something else that you need to consider.
The last time that America DIDN’T have an increase in the National Debt from year to year was in the year 2000, when Bill Clinton was in office. During the eight years of the Bush administration, the Federal Debt increased by roughly $4.3 trillion dollars, and a sizable chunk of that debt was due to the tax cuts of 2001 and 2003. Officially, they were titled the Economic Growth and Tax Relief Reconciliation Act of 2001, and the Jobs and Growth Tax Relief Reconciliation Act of 2003. Although they seemed like a good idea at the time, they’ve left an awful nasty legacy. Total Federal Revenues in 2010 were $2.162 trillion, considerably less than Federal expenditures of $3.456 trillion. It’s naive, and irresponsible, to believe that you can close that kind of a gap just by trimming expenditures.
There are 10 countries in the world where you can still buy gasoline for less than $2.00 a gallon, and all of them are members of OPEC. The two cheapest countries are Iran ($.37 per gallon) and Saudi Arabia ($.61 a gallon).
Obviously, gas for less than $2 a gallon is pretty attractive, until you consider the other costs involved in living in those countries. The Islamic Republic of Iran is governed by a President who rigged the Presidential election two years ago. Although religions other than Islam are officially tolerated, members of the Baha’i religion (the largest minority religion) have been persecuted for more than 100 years.
The Kingdom of Saudi Arabia has the world’s largest oil reserves, and the revenue from all that black goo equals 75% of government revenues. Perhaps not surprisingly, both Amnesty International and Human Rights Watch have repeatedly expressed concerns about the state of human rights in Saudi Arabia. Even today, it is illegal for a woman to drive a car by herself in Saudi Arabia.
King Abdullah is actually the most powerful man in the world. If you don’t believe me, watch the video below:
the old fart in the turban
In 1973, the price of a barrel of oil skyrocketed from $3 a barrel to over $5 a barrel in a short period of time, and the world panicked. As of this morning, by the way, a barrel of oil was going for $82.56, and the sky hasn’t fallen yet.
When George H.W. Bush was elected President, the price of a gallon of regular was $1.12 a gallon. The national debt was $220 billion, three times its size when Ronald Reagan was first sworn in. In 1990, the Republicans in Congress believed that the best way to cut the deficit was by decreasing spending, and the Democrats believed that the best way to cut the deficit was by raising taxes. Ultimately, President Bush worked out a compromise, but it made him a one term President.
According to Thomas Friedman (of the New York Times), George H.W. Bush is our most underrated President.
He never promised America that we would have gas priced at 29.9 per gallon, but he made some tough decisions that were based on what was good for the country, not what was good for the Party. He was still jumping out of airplanes when he was 85 years old. That proves, to put it politely, that he has a lot more “chutzpah” than pretty much everybody who is trying to unseat the current President.
“Poppy” is still alive and well, and he is now 87 years old. If there were more guys like him still around, I might actually vote for a Republican again, but don’t hold your breath. He’s the last of a vanishing breed, and the current “cast of characters” are a poor imitation of the man who defeated Saddam Hussein the first time.
In closing, I’d like to offer the following accolade to the 41st President of the United States:
we miss you, George
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