07-07-2010, 06:02 PM
I agree with most of what you've proposed, but I still don't understand the role of the tariff. You've said the US should use more of its own resources. Why?
Your reason appears to be that the US shouldn't fight wars to keep foreign prices low. But that's the kind of absurd logic you get from half-baked (in both senses) anti-war protesters who don't understand economics. Oil sells at the market price. Unless you want to invade Iraq, Saudi Arabia, Iran, Venezuela, Canada, Norway, Russia, China, Mexico, Brazil, and strongarm US producers into selling at sub-market prices, you can't control oil prices with the military. US interest in oil is not about price, but strategy - in a wartime situation, militaries run on fossil fuels, and control of the supply is critical. But in peacetime? The price you pay is the world price.
So, what then does an import tariff do? If it is to generate any revenue at all, it must change the price of imported oil upwards. US production would then undercut that price, and shift the US towards depleting local reserves. Imports would decline, and therefore so would exports. Someone in the domestic oil industry would get rich, and someone in the export trade would go out of business. (So much for no harm.)
Would this decrease consumption of oil? No, since prices would not change. Would this help make the US energy independent? Not really - the US already has plenty of friendly sources of oil, and the power of OPEC is barely a shadow of what it once was. You can buy today at market prices, and you can almost certainly buy tomorrow at market prices.
So, I ask again: what is the point of this?
-Jester
Your reason appears to be that the US shouldn't fight wars to keep foreign prices low. But that's the kind of absurd logic you get from half-baked (in both senses) anti-war protesters who don't understand economics. Oil sells at the market price. Unless you want to invade Iraq, Saudi Arabia, Iran, Venezuela, Canada, Norway, Russia, China, Mexico, Brazil, and strongarm US producers into selling at sub-market prices, you can't control oil prices with the military. US interest in oil is not about price, but strategy - in a wartime situation, militaries run on fossil fuels, and control of the supply is critical. But in peacetime? The price you pay is the world price.
So, what then does an import tariff do? If it is to generate any revenue at all, it must change the price of imported oil upwards. US production would then undercut that price, and shift the US towards depleting local reserves. Imports would decline, and therefore so would exports. Someone in the domestic oil industry would get rich, and someone in the export trade would go out of business. (So much for no harm.)
Would this decrease consumption of oil? No, since prices would not change. Would this help make the US energy independent? Not really - the US already has plenty of friendly sources of oil, and the power of OPEC is barely a shadow of what it once was. You can buy today at market prices, and you can almost certainly buy tomorrow at market prices.
So, I ask again: what is the point of this?
-Jester