Posted on 07/23/2008 9:45:43 AM PDT by Oshkalaboomboom
A new gasoline tax that ensured high prices would accelerate the move toward fuel-efficient vehicles and provide enough revenue to allow a cut in corporate taxes.
On the surface, the market's behavior on certain days of June and July has been so illogical that my brain simply has refused to accept it. Double-digit intraday swings in prices of stocks without any material catalyst have become routine.
But last week's trading has finally explained what should have been clear for a while: Though current economic troubles may have started with lax credit and underwriting standards and the ensuing subprime-mortgage fiasco, they will likely continue or end based on the behavior of another, seemingly unrelated macroeconomic input: oil prices.
Forget the naked short selling hype or the problems of Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs). These are simply headline grabbers and symptoms of the U.S. economy's problems.
The seemingly unstoppable rise of oil prices over the past several years has brought chaos and pain to so many sectors of the economy that even presumably conservative U.S. politicians have called for a gas tax "holiday" to give consumers short-term relief at the pump.
However, the solution to our economic woes lies actually in the opposite direction: making sure prices for gasoline stay high long enough. Let me explain.
(Excerpt) Read more at articles.moneycentral.msn.com ...
Energy is the main commodity that the economy feeds on. His argument is like saying putting a high tax on wheat will help cure poverty.
Correction-
Energy is the main commodity that the economy feeds on. His argument is like saying putting a high tax on wheat will help cure hunger.
Not enough duct tape in the world to prevent my head from exploding
Well John Kerry (Who served in Viet Nam), wanted minimum tax on gasoline to keep the price above $3 way back when. Also,
Jug ears, wanted to raise taxes also.Vote Democratic if you want $10/gallon Gasoline.
barbra ann
“Let me explain.”
No. You had your opportunity in the first 5 paragraphs and you blew it.
Pro sports, college sports, high school sports, disney world, lose half their gate, people get laid off etc Ain’t this fun?
What a load of crap. This guy will likely become Obamanation’s economic adviser.
But let's keep it straight: the high price of gasoline and our domestic dependence on foreign supplies of it are almost entirely due to government. Taxes, environmental restrictions, land-use regulations, and a metastasis of lawsuits enabled by the wrecking of traditional standards of civil liability have all conspired to reduce domestic sources of energy, not just oil.
Conservation may be wise in some respects, but it is not a solution to our need for economic growth. We need more energy, not less, and there are at present huge untapped supplies of it here in our own backyard. Intentionally raising the price of gasoline would damage our economy, destroy personal savings, further expand the scope and cost of government, and hasten the loss of domestic jobs. Other than that, it's a great idea.
Social engineering through taxation again. They never learn.
It’s an election year and the economy MUST be destroyed so we need “Hope and Change™”
With a hand grenade.
LOL. No need to get violent, though - he can just use the “spoon”.
People focused on a single, limited agenda will ignore the broader picture and consequences of their obsession. One of the things I have noticed about the current energy mess is that many leftists seem to be somewhat surprised by the reaction that is occurring. It never occurred to them that rising energy prices mean rising prices on nearly everything. They seemed to assume that only fuel would go up and never made the connection between energy cost and the cost of everything that requires energy to produce or transport.
It’s like this with taxes. Leftists seem to always be surprised that when taxes are raised on businesses the prices of goods and services rise right along with them. This may be why so many of them hate the thought of profits. If businesses didn’t work for profit then they would pay the taxes without passing them along to their customers and everyone would be happy. I am sure many leftists think this is the way any “honest” business would work and so see those that pass on the tax hikes as evil profiteers.
Leftists live in a very strange world.
Al gore proposed a $1 per gallon hike in the gasoline tax back in the 1990s for the same reason. Obama has said that $4 gasoline just came about too quickly, but has never said it was bad for the economy.
You nailed it. Just a bunch (or a lot) of crap. This writer must live in a make-believe world. He has to be a liberal democrat and in addition, ignorant, uninformed and stupid all rolled up in one big horseball.
Those that were here to experience the OPEC oil embargo in the 1970's saw regular gasoline at the pump jump from as low as $ .30 cents a gallon to as high as $1.85 - $2.00.
Eventually the price dropped until it was roughly twice as much as pre-embargo price.
The effect of that was to initiate a vicious round of inflation as other costs and prices adjusted upward to restore parity.
This continued over a period of five years or so as contracts expired and were renewed, and as increased costs were passed on to consumers.
Eventually other costs and prices settled at a level somewhere near the same ratio to gasoline costs as they were before the embargo and the inflation subsided.
Increased petroleum prices throw price relationships out of parity and can result in short term windfall profits, but eventually other costs rise to eliminate any gross price differentials.
It is already happening now with this latest round of increases.
Business and service providers are forced to raise their prices and workers are forced to seek wage increases to make up the differential.
If we are stuck with a 100% increase to $5.00 gasoline we will see wages and other costs and prices eventually jump accordingly.
When that point is reached truckers may be paying twice as much for fuel but Arabs and other oil producers will be also be paying much more for drilling gear, oil field labor, fighter jets and mosque construction.
Lower energy prices and lower taxes allow more resources for us to develop other energy sources and better products. Money we send to the Government is wasted on inefficient companies and ideas that are falling and cannot compete. Tax money go to losers, because winners don’t need it.
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