Wednesday, May 07, 2008

Obama's Upper Hand

Speaking of elections, stupid people are still under the belief that the next president can do something about gas prices.

With the price of petrol spiking even higher (my local station raised the cost of regular by 3 cents overnight) many people are starting to feel the pinch - but what can a president do about the price of oil?

Well, short of a time machine and a decision not to invade Iraq, not a lot, really. OPEC has the oil-industry by the throat and I can't see petrol prices ever dropping down to their pre-Iraq lows (the heady days when it took just $20 to fill a Firebird's petrol tank.)

The fact that they're powerless to do anything about it hasn't stopped presidential candidates McCain and Clinton jumping on the 'gas price' bandwagon and making what must be the most stupid election pledge of all time - to drop the federal tax on gasoline sales.

Here in America, there are two tiers of taxation. Federal, which hits everybody, and State, which only effect people from a particular state. That's why people from New Jersey pay $3.50 for a gallon of regular petrol while it's $3.93 in neighbouring Pennsylvania.

Federal tax - the stuff McCain and Clinton want to drop for three months during the summer, cashes in at around 18 cents a gallon. They have no control over State taxation, so the most they could reduce fuel prices would be 20c - meaning every time I fill up my Firebird's tank I save about $2.50. Over the course of the summer, that will save me a grand total of fifty bucks (which is not going to make or break the bank.)

The fact is that I, like millions of other residents of the United States, don't really care about the odd 20 cents here and there. We want the price of petrol to drop down to what it was before we invaded Iraq - kicking around at about $1.50 a gallon.

Nothing's going to bring those prices back again - certainly not a three month moratorium on petrol taxation. I'd rather a candidate tackle the real problems behind the energy crisis, instead of trying to fool us into thinking they're doing something positive by throwing us a few nickels and dimes.

Only Barack Obama has stood in opposition against the idea of dropping taxation on gas - and that gives him a lot of credibility in my book. He sees the scheme for what it is - and he also sees that the average American voter isn't as easily bought off as McCain or Clinton think they are.


ck said...

Thats because that liberal wiener wants to RAISE taxes by ALOT not lower them at all.

Any time our wasteful government wants to let me keep my money, I'm for it.

And the war has little to do with the price of gas. Its all about China and India.

Anonymous said...

I've been thinking about posting this myself. It just drives me nuts that Clinton and McCain think the average American is stupid enough to think it's a good idea. Given the simple Econ 101 supply and demand model it wouldn't save ANY money. The gas companies would just raise the prices and they would make that much More money.

You're 100% on about OPEC - THEY are the reason for the high prices. This whole issue makes me SO frustrated.

Roland Hulme said...

Before the war, Iraq produced at least 2.5 million barrels of oil (I think Tom commented earlier that it might have been 6 million.)

Since the invasion, hardly a fraction of that output has been maintained, meaning there's less oil in circulation.

Less oil - plus more demand from India and China, as you pointed out - increases the cost.

OPEC is the real reason for the increased cost of fuel, but the Iraq war has had an impact.

As for Obama raising taxes - how come Republicans always go on about the Democrats raising taxes, but it's Republican presidents who actually DO it. Reagan's tax cuts hit the rich, but working folk had an INCREASE in their payroll taxes. Bush senior promised 'no new taxes' and then promptly hiked the tax rate when he was elected! And Bush... Well, let's not pretend that we won't be paying for our 'economic stimulus package' for years to come.

Republicans have repeated the 'democrats raise taxes' line so often, some misguided people are even willing to believe it!

ck said...

Bush Jr. Has cut taxes.

The stimulus... democrat idea... he just stole some of the credit so they couldn't use it as election sound bites.

I love the 2400 I'll be getting... think it is a STUPID idea, but I'll love the money.

The democratic ticket is to raise my taxes by $2000 per year, and that has already expanded to $3000 and thats not counting 'free' health insurance.

Quantum_Flux said...
This comment has been removed by the author.
Quantum_Flux said...

Petrueleum doesn't quite obey the law of supply and demand since everybody is dependent on it and there is only really 1 source for it right now. To put a tax on gas means that people are paying taxes on a necessity, like grain, electricity, or water.

Perhaps Obama could drive the price of gas up so high by keeping a tax on it, that people will gladly look into buying alternative fuels where their gas money is being reinvested (hopefully not in corn ethanol though, but in some genuine energy R&D)....what, too optimistic or something?