Tuesday, June 24, 2008

What can government do about gas prices?

I'm one of those people who's brain doesn't shut off easily. Not that it's always running on all cylinders, but there's usually something ticking over in the processor.

Yesterday was spent on the road, driving long distance. As happens with many people today my thoughts drifted towards the issue of fuel.
NPR news had noted discussions of hearings in Congress regarding gas prices... and that started the process.

Exactly what can those bumbling idiots do that might help? No, really... What COULD they do?

Government produces nothing. Not one thing. They are users, not producers.
I'm not saying government does not have it's purposes and it's share of dedicated and productive people. My point is..... Government is extraordinarily limited in what they can actually do, when we come right down to it.

They have the power to tax, to regulate, and to subsidize. Thats it. Everything else comes under those umbrellas, as far as we as citizens are concerned.
Even the military, a legitimate purpose of the government, is actually a separate part of our society that 'Government' subsidizes by taxing us (as it should be, by way of providing for the common defense). For the most part our military is run by the military, and stands alone. That is the only reason it's as good as it is. Where it interacts with government is where it goes wrong, typically.

Two of the three function of government, taxing and regulating, are negative activities. They happen at the muzzle of a gun. Don't pay your taxes long enough, and men with guns show up at your door to force you. Ignore regulations and laws long enough, and men with guns come to your door and apply force. That is the basic way it works, when we boil it down.

Of course, this only applies to most people. There are some who's position and power lift them above such mundane things as obeying the law and paying taxes.
These are generally politicians and their cronies.

Governments third function is subsidizing. Using money taken from we citizens at the muzzle of a gun, government then spends it in ways they choose, with little regard for the wishes or needs of the people they took the plunder from.

As a function, subsidizing at least has the possibility of being positive, depending on which side of the equation you are on.

Now, add it up and apply it to gas prices. What, exactly, can government do to lower prices?

As it stands now, the government makes more in sheer unfettered income from the oil industry in taxes than the entire industry makes in profits.

Let me say that again... maybe clearer. The US government makes more money on oil than the oil industry does, and does not one thing to earn it. They just take it.
When you buy gasoline, more of your money goes to Nancy Pelosi than it does to Shell Oil.

Now, I hear no whispers of reducing taxes on our fuel. There are growls of raising taxes on the oil company, which will raise costs and therefor raise prices at the pump. No, government refuses to reduce taxes and thats the only thing they can do to help along those lines. They won't give up their blood money.

How about regulation? Well, there is talk of 'allowing' the oil companies to drill more. Will that help? No... and in fact it's laughable. The only reason we as a nation don't have more of our own supply is 'regulation' already. Oil companies are 'regulated' from searching out new product to sell. This is a main reason prices are where they are right now. It's like a dark scene from Atlas Shrugged where the government attempts to force a producer to produce while at the same time abusing them for producing.

While supply is an issue, refining is far more a bottleneck than oil supply, and new production capacity has not been brought on line for decades due to regulation. Plants are using old and inefficient technologies, with not enough capacity even operating at 100%. We could have all the oil in the world for cheap prices, and refining it would be our chief restriction. There is no talk of fixing that regulatory mess.

No... government cannot tax nor regulate us into cheaper gasoline.

How about subsidize? Some nations do that.... subsidize fuel for their citizens to keep it artificially cheaper. These are easy countries to spot.... mostly second rate and 'developing' (read that as third world) nations whose citizens are kept so poor they could not otherwise afford the fuel.

Take it in historical context... what has government ever subsidized that they didn't totally screw up once they had their hand in? Class? Anyone? Name one thing?

Thought so.

No... there is nothing this government can do to lower the price of gasoline, except get their hands out of our pocket and get out of our way.

Don't hold your breath.

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