Dumb Idea of the Week: Repealing the Gas Tax Because Too Many People Drive Priuses

Kudlow and Kramer split up long ago, but have separate shows. Kramer is more a stock picker and Kudlow is more a Policy and Economist person but does cover Political issues. The Oil dependance is based on many variables per the show ( We get the oil out of the ground, we reach critical mass on EV adoption, conservation, our economy has moderate growth, etc etc etc) and frankly we just don't know.

 

The oil boom is real, it just is not anywhere close to being able to produce as much oil as the US consumes per year, without large shortages in the near future. The only way for the US to import no oil is for Americans to use less per capita. The number one driver of that appears to be high gasoline and diesel prices. Many of us like a lesser goal of only importing north American oil, and not needing to take OPECs price spikes. This will not lower long term oil prices, but remove the spikes as long term contracts will limit some of the oil blackmail that OPEC has pulled in the past. It also will keep money in the north American economy with our friends instead of what many continue funding our enemies. That means good news for both the economy and energy security. The analyst view in the opinion piece you posted switched to North American oil when he said exports. All of this depends on expensive, not cheap oil. If the price of oil drops, Canadians will cut back production, café will be reduced, and imports from opec will start growing again.

That makes this Virginia plan to make gasoline cheaper by moving road taxes to a general sales tax and a hybrid tax counter productive. The story of north American oil self sufficiency is based on expensive fuel. It is not helped by taxing a different source to subsidize oil use.

 

Nope. You didn't read it correctly. It says North America will be oil exporter. Canada and Mexico being two of the largest oil exporters, it is a meaningless comment vis a vis US which will see total oil imports go up. Along with pollution and need for military to secure Middl East oil fields which will continue to control the world oil market.

As for the article, it is written by a PR firm paid to fluff oil company stocks.

As for Kudlow, a Reaganomics ideologue, proven wrong on everything he says. His dual claim to fame being fired for cocaine use and for being Bear Stearns chief economist as Bear Stearns imploded.

 

LOL...

 

You are right it is north America, not the US, but don't be so pessimistic. The only reason the us has military in the mid east is the carter doctrine. The military hasn't secured one drop of oil since WWII.
The analyst opinion piece quoted the iea, which has the US declining imports, which is opposite of what you are predicting.

That says oil imports will drop from 10 m bbl/d to 4 m bbl/d while production will increase by 3 m bbl/d. Doing the math that means iea projects oil use will decline in the US from 18.1 bbl/d to 15.1 bbl/d by 2020. If the new café standards help, that decrease should continue. A lot of the decrease is predicated on the price of oil staying high or going higher. If that happens there will be plenty of investment for unconventional oil.

Wow. Are you a tea partier, and think Reagan was a republican in name only, and want to continue the war on drugs. I don't really know kudlow but that really is a strange analysis. Krugman also sees decreasing oil imports. Does that make him a reagonite?

 

Austingreen good job.

 

Carter Doctrine = oil. What exactly did you think was meant by US intervening military in Middle East to "defend its national interest". Carter, Reagan, Bush, Clinton, Bush and Obama all know that the US "national interest" is oil...without which US economy is destroyed and currently held hostage by imported oil due to US energy inefficency.

Which brings us round to this discussion on the Prius forum, buying a Prius being one of the ways an individual can increased US energy efficiency and specifically using less of that devil oil.

Which brings us around to the topic of taxing high mileage cars because they pay lower gasoline taxes due to less use. We want goverment policy to encourage increasingg US energy efficiency and US not needing to import any oil. Paying less for gas and paying less gas tax is one of the perks for energy efficient cars.

US gasoline use is at near record highs. The idea that Prius is causing a dip on gas sales tax revenue is wrong since gas usage is at near all time highs.

US will always import oil and in increasing amounts as has been the history unless US makes Manhattan Project priority to cut oil use by 50% by making US more energy efficient.

You only find fringe characters like Kudlow or paid PR firms claiming that US will not be importing more oil which even the oil company PR firm admitted in its promo piece.

 

US gasoline use is at near record highs?

Well sure - it is near record but has been declining for years. Sure some of that is as the economy declined but we are 8% below 2007 levels despite some economic growth (we have recovered to our original GDP). CAFE requirements will likely continue the trend even if it isn't fast enough for anyone here.

Continued on that trend, along with increasing NA production, we get to no NA imports in about 5 years if memory serves. NA parity is important since we are so economically and culturally tied to NA that war is not an option. And the only option would be a quick victory for the US in either front.

Lets face it - Canada and Mexico would become part of the US in a signature if we really needed it to happen. The same is not true of the Middle East. So NA matters.

 

Huh? You think we'd have reasonable oil prices and wouldn't be beholden to the whims of nut jobs, dictators, and extremists in the Middle East if our military was totally hands off in the Middle East?

What if we'd let Saddam keep Kuwait and his power? What if the Saudi government fell and were taken over by Al Qaeda?

Yep on both points. And unfortunately, when clicking thru the links under the left column of the table at Oil: Crude and Petroleum Products - Energy Explained, Your Guide To Understanding Energy - Energy Information Administration, U.S. Product Supplied of Crude Oil and Petroleum Products (Thousand Barrels per Day) shows that the US sure isn't real good at sharply cutting back in oil consumption.

 

Here's the graph of US gasoline usage which has been increasing for decades. The slight downturns in a steady increase are due to recessions or oil embargoes. US oil use is increasing in absolute numbers and US will always be an oil importer with resultant costs, $400B oil import deficit, $500B military deficit and $500B environmental deficit.

Only solution is US becoming 50% more energy efficient and not needing imported oil. The same level of energy efficiency we see in Europe where, on this topic, national sales tax on gasoline is $3 per gallon. A good national policy that will pay for oil's costs ($14T national debt due to $1T year oil war for last 30 years) and encourage people to buy low/no gas use cars.

 

No. The data and the graphic are for GASOLINE not for gasoline and ethanol combined. The fact that slight increases in CAFE standards, too little, too late, have had no effect on US gasoline usage is a good reason to look at increased gas tax to reduce gasoline usage and pay for the costs of gasoline usage, trade deficit costs, military costs, pollution costs.

 

The only benefit people have claimed for the carter doctrine is an earlier collapse to the soviet union. We did not help the afghans by supporting the freedom fighters and terrorists under the carter doctrine in Afghanistan. We became beholden to the ISI in pakastan, and got blow back of al quida. The carter doctrine is what makes us kowtow to those in the middle east, it doesn't lower oil prices or make those countries more stable. Did supporting Iraq against Iran in that war get us anything but an empowered saddam and an Iranian government with legitimate grievances against the US?

Both of these things were blow backs from the doctrine, but lets go step by step. Hmm. Would the US be worse off if Iraq now controlled Kuwait, and we did not lose men and treasure in 2 gulf wars? I doubt it. The Kuwaitis would be worse off, but there are lots of people suffering worse. How about if Saudi got taken over by al quida and somehow became a sexist society where woman have have to have a male escort everywhere. Where money from Saudi oil goes to terrorist organizations. Wait, most of that is our current ally Saudi Arabia. Do you think al quida would use oil black mail has Saudi did in 1973. Maybe, then again Saudi Arabia might do it, when it collapses in a future arab spring. The carter doctrine gets us no more oil. They will sell it to us. It just costs blood and treasure.

Now without the carter doctrine, its unlikely that we would even have al quida mad at the US. But that would be actually thinking about things.

Whether we spend a fortune on a military to help one bad government against another bad government or not, they will sell us their oil. That's how they fund the government. The carter doctrine (CD) says we will spend a lot more and get consequences. Now that we have wound down one CD war, and will be pulled out of the other CD war by the end of 2014, its time to stop the insanity. We still need to stand up to a nuclear Iran, but not because of oil. We can still support the French and mali people not because of oil. What we should never do again is start a war because of oil.

I guess your second point to me is you don't think the higher oil prices and new more efficient cars partially brought on by café standards will drop oil consumption in the US the 3 million bbl/day that iea projects. Its not my projection, but I think their reasoning is sound. Adding an oil tax would help us decrease consumption more, and that would be a good thing.

 

No. It is the US need for imported oil and the fact that the world oil market is controlled by Middle East producers.

Reagan, Bush, Clinton, Bush and Obama also "kowtowing" to Middle East oil producers for oil.

Nope. It was Reagan/US support for Saddam's war on Iran that lead to Saddam aggression against Kuwait with the approval of Bush's ambassador. Afghanistan and 911 were blowback from Reagan/Bush support for Bin Laden vs. Soviets and the secular Afghan regime that sent girls to school vs. US backed regime that bans girls from school.

All for the need for oil. All because Americans are too ignorant and immature to take responsibility and raise the gas tax to pay for the 30 years of oil wars and trade deficits and pollution.

All one can do is buy a Prius (or other hybrid/EV) and use less oil individually. The argument that high mileage cars have caused a reduction in gas tax revenue is a lie as the rising gasoline usage in US demonstrates. It is also anti-American as the most patriotic thing an American can do is cut his gasoline and oil usage.

 

That is again irrational. It is a colonial instinct, the basest. How did these sheeks happen to get on top of our oil.

Carter made a really awful policy that we don't need to be stuck with anymore. We can look and reject this horrible idea. Reagan, looked at it and seemed to say, I can make it worse. By the time HW bush got it, the policy had gotten us into lots of trouble. He seemed to double down.

Clinton tried to just fly bombers over it. I don't think he really every bought into the policy, but he didn't have the force of will to reject it. And this is the sad state we get to. Carter never helped with one drop of oil. His policy just keeps costing blood and treasure. I don't think he or Reagan would ever made the mistake if they looked back at where the disgusting policies have gotten us.


Just say no. War for oil never worked.

The Carter Doctrine at 30 | World Affairs Journal

 

I'm sorry but down 8% over 5 years is fairly good progress. CAFE standards weren't changed for 20 years and the graph shows that along with population growth and increased sprawl. The RE market has slowed sprawl and the economy has slowed population growth. This has let the CAFE actually make a dent in gasoline use.

There is zero political support for an increased gas tax. The pres felt that health care was more important than energy security, pollution, climate change and energy independence. His capital has been spent despite his reelection. Since the Repubs aren't exactly clamoring for an increase gas tax, you can argue all you want but it isn't going to happen.

Best bet would be strong global economic growth and oil at $150 again.

 

Absolutely its good progress. Its not just that café was not raised in a long time, it actually shifted people to SUVs. The new café effects are just starting to be felt. We can expect that café along with biofuels will create a serious dent to oil usage. iea expects that it will drop 16% between now and 2020, use that as you will. The amount of long term decrease has a lot to do with the cost of gas and diesel when cars are bought. Cost of oil has more to do with Asian demand in the future which is difficult to predict.

 

US being at war in Middle East for last 20 years is irrational? I would agree. Much better to spend $1T one year in US to increase US energy efficiency by 50% vs. spending $1T EVERY YEAR FOR THE LAST 30 years on military build up and war in the Middle East.

Bush I and Bush II were the most aggressive practioners of the Carter Doctrine (that US would go to war in Middle East to insure oil supply).