georgia10 had a
front page story about "price gouging" yesterday, and how the Democrats are organising to turn it into a political issue.
While I understand the political logic behind such moves, and the easy gains it can provide, I think that it is a very short-sighted thing to do, and I'd like to argue that Dems must, today, argue for a gas tax, and own it.
Here's why. Please read on before telling me that it will get Dems slaughtered in the elections.
A few things must be remembered as context:
- oil market tensions are going to stay with us for the foreseeable future. As I have chronicled, and as sites like the Oil Drum show in excruciating detail, there are major problems on the supply side, and it is increasingly likely that balancing the market will require for demand growth to slow down, and reverse.
At a time when demand is shooting up in emerging economies like China, that will mean demand destruction in the West, starting in the USA, the biggest consumer of all;
- there are two ways to reduce demand: administrative fiat (rationing) and market mechanisms (price increases).
Thus gasoline prices ARE going to increase, significantly, in the near future. The question is: who will get that money?
- Foreign governments, that may or may not use the funds for nefarious purposes like supporting terrorism, but in any case the money will be gone from the USA, or
- the US government, which can use the money to help those that suffer from higher gas prices in the USA and to invest in finding alternative solutions?
Prices WILL increase. That can happen in an organised way, chosen by America, and used for the benefit of America, via taxes, or it will happen as the markets dictate.
Gas taxes make several things possible:
- they increase gas prices, thus encouraging Americans to use less gas. By reducing demand, that will lower oil prices and thus both the volume and the cost of oil imports;
- they raise funds that can be used to help those Americans that will suffer from higher prices;
- they raise funds that can be used to invest in the R&D in technologies that will help find substitudes to oil;
- they can be used to make the process of increasing oil prices more predictable, which will allow to smoothen the transition.
Of course, Republicans will scream bloody murder, yell "tax, tax, tax", but isn't it time to actually address the issue and face them on it rather than cower in fear? Or do you think that Americans are so delusional that they will never accept that something actually needs to be done about the now very obvious energy/oil crisis?
It's time to OWN the issue, to show that we recognise the problem, and actually have a realistic solution. Otherwise, the "solution" will be fewer restrictions on drilling, more pollution by coal, more subsidies for big oil, nuclear and other utilities, and more wars in the Middle East.
As you know, Energize America (a new draft will come out next week) has proposed a regularly increasing gas tax as part of its package, as a way both to get gas consumption down and to finance the rest of the package. If, as we intend to, we push this with Democrat politicians, it can only be done with the gas tax acknowledged and promoted. We will sell it only if we are not ashamed of the message it conveys.
Taxes are not evil, they pay for vital services to the population, and for vital functions of the government. Energy is the biggest issue of out times (what do you think Iraq and Iran are about?), and the US government has to act in ways that actually work, and has to have the means to do so. Piling on debt for future generations to pay is NOT RESPONSIBLE.
As you will see from the models we'll present within Energize America, Americans will actually benefit from the gas tax rapidly, thanks to lower energy consumption.
It's time to stand for something.
Am I wrong?