#OT# More BS on oil supplies

wrote:


When the economy is going well, pay down the debt. When it's not, don't. One useful way to look at this is in terms of GDP: you want the debt to go down as a percentage of GDP when GDP is growing. Absolute numbers don't matter as much as fractions of economic activity. When the GDP is flat or dropping, depending on the reason for it, the smart thing often is to increase the debt.

Your feelings are interesting, but feelings don't solve problems. Setting good policy can help solve problems.

The serious gas tax plans include a credit, usually based on income. That covers lower-income people financially while still leaving in place their incentive to use less gas.

That doesn't create a market. That just distorts a market. People will still want bigger cars and the car makers will do everything they can to encourage them to buy them, just like they did with the original CAFE standards. The car makers paid a penalty if they made too many low-mileage cars but it was still more profitable for them to make the cars and pass the penalty on to the customer.
And then the small cars they make are junk, because they're just trying to squeeze a distorted market and they're building the cars to meet the standard. That's why their small cars are mostly junk now. When they sell a good one, it's usually because they build it overseas and imported it.
This is not maliciousness, greed, or collusion on their part. They're just following the market incentives as we've set them up, trying to keep their heads above water. CAFE standards are better than nothing but they create some perverse incentives that work against us in the long run. If you want a straightforward, clean incentive that pushes in the right direction, a gasoline tax is the best one anyone has come up with.

Don't outlaw it. Just make it expensive to make choices that hurt the whole country. There's an external cost when thousands of people buy Hummers, and the external cost is higher gas prices for everyone.
They did that in Germany for years, with a tax on engine displacement on top of their high fuel taxes. I don't think we need an engine tax. A substantial gasoline tax ought to do it.

As we can see already from the truck/car sales ratio (that 45% was for July, BTW; the 49% was for November. I forgot to mention that), a great many people don't. They just blame it all on market manipulation and think it's the government's job to ferret out the evildoers and to get prices down again. What they don't recognize is that they're the ones regulating the market.

It will be a shot of heroin -- it can put a lid on the pain, but it doesn't help anything in the long run. But timing is important. If you raise taxes quickly now, you'll stall any recovery. It has to be phased in, perhaps adjusted to the state of the GDP.

Well, if we could count on everyone to use good sense like that, there would be no need for any regulation and we'd be making smart choices without the coercion of gasoline taxes. But we can't, because people don't, and we therefore do. d8-)

We did, Wes. And I hope yours was the same.
-- Ed Huntress
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Having seen how excess social security funds have been 'invested' do you really trust government to do the right thing?

Previous response applies.

So you belive tax policy should be a tool of social engineering?

If you have 4 or 5 kids, something that tax policy seems to encourage, they are not going to fit in a sub compact.
People that are not schooled in physics seem to get that more mass vs less mass means you have a better chance of surviving a head on. So you want to force those that are not as well off into cars they will die in when the rich roll over them?

My 2001 Saturn is an excellent car. 161,000 miles and counting.
Not a great winter car since Governor Grandholm is balancing the budget by not plowing roads. Of course that means many of us living where I do are looking at suv's again since we need to get to work to keep that job.

That only affects the lower level classes. If I made 300K a year, I'd drive anything I liked. It is not clean in any way.

The hummer drivers are unable to give these things away. At least there were not able to a few months ago.
Based on your logic all private jets should be outlawed too. More efficient to fly commercial.

Good Dems.

Are you supporting the "Laufer Curve"? Seems like one side likes low taxes and another thinks high taxes will maximize revenue.

Well, a lot of people use good sense. Usually the lower on the scale of earnings the better sense they display. The ones thinking they are living large will shrug off gas taxes as they live outside their means.
I'm not a fan of social engineering. Social engineering is government working backwards.
Wes
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wrote:

Disregarding the fact that social security "surplusses" are actually a net loss after corporate tax deductions for payroll taxes, how would you have wanted them to be "invested"?
Think about where you'd put the money. In Treasury bonds? So that we owe the money to ourselves, and gain interest -- but with the other hand we're...paying the interest? <g>
These things get simplified in the popular explanations so that people can relate to them as if they're like a family budget. But they're not.

If you get specific, we can follow the money around the track for an example or two. Then the question boils down to this: Do you want that money to stay here, where it swaps hands among Americans (efficiently or not; it doesn't matter much), or do you want it going to Saudi Arabia?
It's our choice. My bet is that we'll continue to send it to Saudi Arabia, because the benefits of taxing gasoline are a little too hard for the average voter to follow. All they know is they don't like taxes -- or much else, for that matter.

All tax policy is a tool of social engineering, and always has been. It's just a question of whether you want to do the engineering, or to let Exxon and Iran do the engineering by default.

Well, then, put them in a horse-drawn wagon. <g> Too bad. They should have smaller kids...

Yup. Get rid of the riff-raff. <g> Get rid of 75% of the 3-ton SUVs, and we'll all be a lot safer. Tax the hell out of them and you'll get the numbers down.

That doesn't make it an excellent car. I have an axe that I use regularly. It's almost 90 years old and it still has the original head. <g> It's a long-lived axe but I wouldn't call it excellent.
If you want to try an excellent car of about the size of your Saturn, take a test drive in a 3-Series BMW. As I told a couple of GM engineers one year at IMTS (admittedly, it was a long time ago), if that doesn't make you want to come home and kick in the doors of your Chevy shitbox (or Saturn), you're not a car guy.
The engineers were not amused, BTW, but they didn't have a rejoinder, because neither of them had ever been inside of a BMW. That didn't stop them from bad-mouthing the "yuppies" who bought them.

It's a funny thing, but we got along fine without SUVs for around 70 years, so I'm not impressed with their attitude. The best snow car I ever had was a '64 VW bug with studded tires, which carried me to the ski slopes for years, when everyone else was stopped dead. It got 36 mpg on the highway.

What are you, a communist? d8-) The object is to make the economy work for all of us, or for as many as possible. I'm not impressed with low-income people who tell me they're deprived because they can't fuel their SUVs.

Nowhere in anything I've said have you heard me suggest "outlawing" anything. You're making that up in your head.

I don't think political affiliations have anything to do with how much people bitch about what the government is doing wrong. The ones who think they know how to do better tend to be the ones who never graduated from high school. They have all the answers.

The Laffer Curve is a much-abused device that Laffer himself calls a "pedagogical device" for use in the econ classes he teaches. Of course it's valid -- the idea has been around since the 13th century. It's just that nobody knows where the intersection point of those two curves lies. The most expert analysis says it's at a total tax rate of 65%. I suspect that's in the right neighborhood.

Nonsense. Their lack of sense is how they got on the bottom of the scale in the first place.

If they have enough money, they *can* shrug off gas taxes.

Everything that government does is social engineering, especially taxation. And big companies that have real market power do the rest of the social engineering for us.
-- Ed Huntress
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On Mon, 29 Dec 2008 16:35:07 -0500, "Ed Huntress"
<snip>

<snip>
It all depends if you regard yourself as an American citizen or a "Citizen of the world."
Far too many of out governmental officials (e.g. "trade representatives") and CEOs are now "Citizens of the world" even though their salaries and pensions are paid by the US taxpayers and nominally American corporations.
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I know where you are going. The sum of money in social security is so large that the government would end up having an interest in about every publicly traded firm and also other countries treasury bills and stock. That could prove unacceptable to many people.

I know that.

So you are saying if keeping gas at 4 dollars proves good policy, government will willingly give up the additional revenue when the price of oil rises? Since I'm predicting the future, 'feelings' or 'gut check' matter.

Well when we are getting it cheap, I'd rather drain theirs. Our exploitable physical resources are a huge part of the wealth of this country.

About half the people don't mind taxes at all since they really don't pay them. That is a dangerous point to be at.

Got to maintain that 50% of Americans that don't pay taxes.

I'm a fan of less engineering. The power to tax is the power destroy.

Let them eat cake?

The rich or upper middle class will still have their SUV's. The well off get to be flattened. Btw, the less well off will be running tin cans that have been lightened up to achieve higher cafe numbers so more of the SUV's can be sold. That is a distortion.

Excellent is subjective. It was reasonably inexpensive. Seldom let me down and gets me to work and somehow hasn't rusted out on my Northern Michigan roads.

I'm sure it is a fun car. Of course the entry price and price of repair parts might be a bit more than I want to pay for transportation.

I would hope these engineers designing cars had experience in all the competitors product. One the joys of flying somewhere on business was getting to try out a new car (rental) at my employers expense.

Well if I was driving my 68 Plymouth with limited slip, I could blaze my own trial but that cars days are over. Studded tires are illegal here btw. I'd buy and mount them in a heart beat if legal.
Yes, the Beetle was a good snow car. And if the heating system still worked, warmed up pretty quick.

I'm showing that Libertarian side again.
Actually minivans are pretty good idea for large families.

I notice a lot on the road now. I don't know the typical price of a Hummer but I have a feeling if that didn't scare off the buyer, the gas tax won't either.

Taxing to death is close to outlawing and it takes a legislation to create a tax.

[snip]
Well, those that went to elite schools have been running this country for years. Look where we are now.

I'm wiping my coffee off the screen atm. God only asked for 10%. Btw, the Treasury will always accept donations if you feel you are not paying enough.

What? I think we better look at those that thought their house was a piggy bank. The people I know that are standing on their hind legs and providing for themself just want to pay the thing out.
Credit Default Swap isn't something us blue and grey collar types were responsible for. Y

So we are back to the war on the middle class.

Government engineers by force. Companies have to sell you a product. Big difference.
Happy New Year btw,
Wes
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wrote:

There are only so many things a government can invest in, as a passive investor. So they spend it on the "investments" that improve infrastructure, or education, basic science, etc. There are no "trust funds," as you're doubtless aware.

If we had a good policy, the tax would slide a bit with market prices -- but only a bit, because, if you just taxed the difference between market price and some target figure, the suppliers would have no incentive to keep their prices down. You actually would have a counterproductive incentive if you did it that way.
Most of the policy ideas for a gas tax set a floor price, and then have a declining tax rate as market prices rise. But the declining rate is only partial; higher market prices must result in higher prices at the pump. You can't just flatten the pump price.

The more we tax it, the more it drains theirs. They need an income and lower prices means they have to pump more oil. At least, many of them do, including Venezuela.
But the object is to reduce our dependency. With cheap prices, you just perpetuate it, no matter where the oil comes from.

Sure. But you won't have much left for very long if you don't shift the price to encourage less use of oil, and more use of alternatives.

That doesn't stop tax increases from being the third rail of politics. Advocating a tax increase has killed many political careers.

Nonsense! Practically everyone pays taxes -- sales taxes, payroll taxes, gas taxes...and property taxes, either directly or, if they rent, indirectly.

I don't know where you got that aphorism, but it's a silly one. Of course it can provide the power do destroy. But without it, there would be nothing worth destroying.
What's the problem with getting involved in your politics and making things happen the way you think they should? That's the way this government was designed to work. If you don't, it doesn't work. And if you don't get involved, you have no room to complain.

Let them drive something that makes sense. They're already getting tax deductions for their rug rats, fer chrissake. d8-)
If you're going to have multiple kids and you want to drive a big car, you'd better make a big income. If you don't make a big income, then either don't have all those kids, or don't expect to be able to drive a car that you might have if you were loaded.
I have a hard time following you here, Wes. On one hand, you sound like a libertarian, on the other, like an egalitarian. Big cars and big SUVs are for people with lots of money. If you don't have lots of money, then don't expect to live like you *do* have lots of money. I don't, but I have no problem with people who have lots of money buying what they want. If it hurts me -- and sucking up gas at 12 mpg hurts me because they're driving up demand for oil -- then those people should pay for that external cost they're imposing on the rest of us. Tax 'em. If they buy a big house, it's no skin off my nose. So tax rates on real estate values should actually decline somewhat as prices go up. They may be soaking up slightly more services than I am (it requires more fire engines to put out their house fires <g>), but not a straight multiple of their house value.

I assume you mean that the *less* well-off get to be flattened. <g> You bought that argument from GM and Ford really well. They LOVE that argument. They don't want you to think about the fact that they could build safer small cars, or that we could simply reduce the number of multi-ton barges on our roads and increase our statistical chances of remaining intact by a large margin.

CAFE is a distortion that produces several unhappy incentives. Taxing fuel is a lot better.

Sure. You pay more for excellent cars. I wouldn't buy one, but I'm a card-carrying cheapskate.

I agree. But they did not. I happened to sit with these guys in a lunch cafeteria at IMTS, and I was appalled at what I heard. They didn't know much of anything about their competition, and they didn't care. They were good and pissed off by the time I left and they were glad to see me go. d8-)
In my travels and coverage of the car manufacturing industry I've heard that refrain more than once.

The trick was to get one or two of those J.C. Whitney fans that you stuck under the back seat, which drew air through the heater jackets on the exhaust pipes and blew it into the car's windshield heaters and floor vents. They were $15 each and they made all the difference. They sold a lot of them in Michigan.

Sure. I had one for 15 years. I sometimes wish I had it back.

Well, then, don't tax it to death. Just tax it into a deep coma. <g>

Hmm. How about, the most powerful country in the world, with one of the strongest economies?

God didn't offer us aircraft carriers, MRIs, air traffic controllers, or the Internet. He didn't do medical research or transportation research; nor did he run a police force or fire department.

Sure. And you can write it off on your taxes. d8-)

The people who are standing on everyone else's legs own three or four houses free and clear. d8-)

Of course not. Most of them wouldn't know how if they wanted to.
I don't see much evidence of good sense from people at the bottom of the economic scale, Wes. Mostly what I see is people playing by other people's rules, which is why they're at the bottom of the economic scale.

We are back at the fact that if you want play like you have money, then you'd better have money. If you clerk at a grocery store or work in a tool crib, don't expect anyone to feel sympathy if you can't afford enough gas for your Ford Expedition.

You can always decide not to use gasoline or buy food in a supermarket. You can hide in a bunker if you want to. Otherwise, you can hardly turn around and spit without being under the thumb of big corporations everywhere.

You too, Wes. I've started early. d8-)
-- Ed Huntress
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[snip]
Daniel Webster and John Marshall.
Google is your friend: <http://www.bartleby.com/73/1798.html
Joe Gwinn
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wrote:

Except that's not what Webster was arguing. He was arguing FOR federal taxation power over the *states*, in McCullouch v. Maryland. He wasn't talking about the value of taxation in general. Nor was Marshall, who essentially quoted Webster.
The irony here is that the example you're citing is the origin of the jurisprudence concerning the Necessary and Proper clause of the Constitution, which says that the federal government can override any state law that interferes with federal power.
As I said, of course it can provide the power to destroy, if that's how it's used. Without it, used properly, there's nothing left to destroy. By taking a quote out of context Wes has flipped its meaning on its back.
-- Ed Huntress
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Ed, you asked where the "silly aphorism" came from. Now you know.
Joe Gwinn
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wrote:

Right. Thanks for the silly aphorism reference, Joe. <g>
The funny thing is that I remember McCulloch very well, but not that quote. The case was about federal supremacy -- which was affirmed by Marshall's decision. I think the aphorism has taken on a life of its own, stripped of context, and that people who quote it would be nonplussed to learn what Webster was talking about: the authority of the federal government to set tax and banking policy, over the heads of the states.
-- Ed Huntress
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I don't know that Webster would agree with you here. I think that while there was a specific case then at hand, the statement was general. It's clearly true. Let's say that by some mistake a SUV-hater is anointed King, and immediately imposes a very large annual tax on SUVs. How long will SUVs survive?
Joe Gwinn
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wrote:

As Justice Holmes said, "hard cases make bad law." McCulloch was a hard case -- one of the series of cases that attempted to sort out the relations of the states to the federal government, with absolutely no Constitutional guidance to go by.
Generalizing the specific arguments used in hard cases leads to absurd conclusions. Of course the power, as Webster said, "an unlimited power to tax involves, necessarily, a power to destroy," is a great power that has to be used judiciously. But Webster argued several cases affirming the federal power over the states. What he was talking about was the danger of destroying federal power by unlimited power of the states to tax. That's the irony here, which is lost on the small-government conservatives, particularly those who rail against the federal government.

Hopefully, not for long. d8-)
There are two ways SUVs can die out. One is by driving us all into penury by driving ever deeper the hook that the Arab states have in our throats. The other is by shifting the supply/demand curve by making them very expensive, hopefully by means of a gas tax that will help us get off our dependency.
Which do you prefer? Do you like sending $700 billion/year to Middle Eastern countries that want to destroy us? Is that your idea of the benefit of letting the market determine the outcome?
-- Ed Huntress
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Ed Huntress wrote:

You guys are so full of yourselves!
So SUV's are the problem now?
Not the way that cities are laid out with centralized shopping miles from home?
Or poisoning the gas supply?
My Blazer USED to get 26 MPG on the highway. But that was before king corn was legislated into the fuel supply. It barely gets 24 now.
But I still love it - because I can get in and out without contortions.
(shaking head sadly)
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Yeah, they're a problem.

Nope. That's a case of having your home in the wrong place. d8-)

What the hell are you talking about, "poisoning"?

Oh, so they've poisoned the gas supply with ethanol. Hell, I drink it on purpose. d8-)

You've got yours, Richard -- all 5,000 pounds of it.
-- Ed Huntress
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Ed Huntress wrote:

3600 pounds, Ed.
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All very interesting, but let's get back to the original question: Is the statement that the power to tax is the power to destroy true or not?
Daniel Webster was one of the greatest debaters of his day. Somehow, I think he would make short work of this.

Red herring. I wasn't proposing a tax on SUVs, I was supporting the contention that the power to tax is indeed the power to destroy, by giving an example.
Joe Gwinn
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<snip>

If you followed what Wes and I were saying, you probably noted that we long ago agreed on that. Here's what I said about it:
"I don't know where you got that aphorism, but it's a silly one. Of course it can provide the power do destroy. But without it, there would be nothing worth destroying."
It's a silly and self-evident bromide.

Read the McCulluch case, and see what he was arguing for.

That has nothing to do with what Webster was talking about. Read the case.
-- Ed Huntress
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wrote:

Indeed. the statement is most valid.
Ed just doesnt like to think about the implications and tends to try to avoid them.
Gunner
"Upon Roosevelt's death in 1945, H. L. Mencken predicted in his diary that Roosevelt would be remembered as a great president, "maybe even alongside Washington and Lincoln," opining that Roosevelt "had every quality that morons esteem in their heroes.""
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On Thu, 01 Jan 2009 13:24:37 -0500, Joseph Gwinn

----------------- While the earlier cites appear to be correct, this also comes from a anti child labor law where products produced by child labor moving in interstate commerce were to be taxed at a punative rate in order to drive the companies out of business, in particular matches. -------------- <snip> The Keating-Owen Act of 1916 prohibited interstate commerce of any merchandise that had been made by children under the age of fourteen, or merchandise that had been made in factories where children between the ages of 14 and 16 worked for more than eight hours a day, worked overnight, or worked more than six days a week. <snip> ----------- http://en.wikipedia.org/wiki/Hammer_v._Dagenhart
Many children were being seriously injured and maimed making phosporous matches. http://www3.interscience.wiley.com/journal/119725938/abstract?CRETRY=1&SRETRY=0 http://en.wikipedia.org/wiki/Phossy_jaw
http://www.answers.com/topic/child-labor-tax-case Chief Justice William Howard Taft held that the tax threatened state sovereignty because it was for regulatory, not revenue, purposes.
-------------- <snip> Although the Keating-Owen Act was passed by Congress and signed into law by President Woodrow Wilson, the Supreme Court ruled that it was unconstitutional in Hammer v. Dagenhart 247 U.S. 251 (1918) because it overstepped the purpose of the government's powers to regulate interstate commerce. In its opinion the Court delineated between the Congress's power to regulate production and commerce. A second child labor bill was passed in December of 1918 as part of the Revenue Act of 1919 (also called the Child Labor Tax Law). It also took an indirect route to regulate child labor, this time by using the government's power to levy taxes. <snip> ----------------
Congress made a second reun at the problem through taxes:
http://www.ourdocuments.gov/doc.php?flash=true&docY
For current [1918] NYT article see http://query.nytimes.com/mem/archive-free/pdf?_r=1&res 00E7DF1338EE32A25750C0A9639C946896D6CF
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wrote:

The original quote comes from the McCulloch v. Maryland Supreme Court case, 1819. It started with Daniel Webster arguing the case for the federal government's supremacy over the states. Justice Marshall picked it up in the Court's decision.
The whole argument was NOT about taxes, but about the supremacy of the federal government. Taxes came up as one of several "powers to destroy" the institutions of the federal government, as listed by Marshall, that the states might employ to undercut federal authority. But this was the bottom line from Marshall. The "taxation" he's talking about is the taxation Maryland wanted to impose upon the notes of the 2nd Bank of the United States:
===================================="Taxation, it is said, does not necessarily and unavoidably destroy. To carry it to the excess of destruction, would be an abuse, to presume which, would banish that confidence which is essential to all government. But is this a case of confidence? Would the people of any one state trust those of another with a power to control the most insignificant operations of their state government? We know they would not...
"If the states may tax one instrument, employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent-rights; they may tax the papers of the custom-house; they may tax judicial process; they may tax all the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the states...
"The question is, in truth, a question of supremacy; and if the right of the states to tax the means employed by the general government be conceded, the declaration that the constitution, and the laws made in pursuance thereof, shall be the supreme law of the land, is empty and unmeaning declamation."
==================================== To take that phrase out of context is to destroy the meaning and the argument. Neither Webster nor Marshall argued for limits to taxation by the federal government. The case was about the question of whether Maryland could effectively destroy the 2nd Bank, which, Marshall concluded, had the priviledge of the supremacy of the federal government over any individual state.
Marshall said at least a couple of times in the Court's decision that the government's limit to tax was based on judicious use of the taxing authority by the legislatures. An abusive taxation by a state might be unconstitutional; in Maryland's case, that's what the Court determined.
-- Ed Huntress
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