emission rights

[Jester]

One reason, yes. I think you need to re-examine the bigger picture. Our dependence on foreign oil was identified as a threat to national security soon after the end of WWII. US involvement in the middle east parallels the rise in power of OPEC nations (includes, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, Qatar, Libya, the UAE, Algeria, Nigeria, Gabon and recently Angola). The US has worked arduously to curry favor with about half of them, and has also become equally ardent enemies with the other half. Their dominance of world oil production has waned to a mere 30%, but I believe maintaining price stability is THE strategic reason we must be present there at all. Much of our foreign policy, and military interventionism is directly related to maintaining access to strategic minerals (including oil).

Of the list above, I get "ardent enemies" from Venzuela and Iran. Iraq, Kuwait, Saudi Arabia, Qatar, Libya, the UAE are all US allies. As best I know, Nigeria, Gabon, Angola and Algeria are all neutral. Not on the list are Mexico, Canada, Russia, Brazil, and of course the US itself, none of whom are in OPEC. Maybe, just maybe, OPEC has enough power left to twist prices enough to dent the US economy, at a massive cost to their own profits. But, as they try and twist the prices upwards, other countries will step in and undercut them, just as basic market economics predicts. The days of monopoly production are over, and it has little to do with US military intervention, and everything to do with expanding production across the world.

It would be revenue neutral at the pump, but rather than tax just the consumer, it pushes the taxation back to the importer.

Do you have something against importers? Their math is actually quite easy - if they can't compete with domestic producers, they will stop bringing oil into the country. Then, the government stops making any money at all from the tariff, and the resulting rents all accrue to domestic producers. Three cheers for protectionism!

If it is important for national security, then the US government should outright buy the oil reserves and then, as the owners, can do with it as they please.

If strategy was the only important factor, then yes, you could do worse than to buy up the entire US oil reserves, and preserve that capacity for times of need.

Government action, by definition, is a type of force. When the party acted upon has done nothing to deserve interference, then yes, the action is unjust. However, the commerce, along with proper and necessary clauses seem to apply here, if ever they would. It certainly is within Congresses power to levy a fair tariff on oil for the purposes of paying for the federal costs for transportation systems.

My argument is certainly not that the Congress lacks the power to do this. Much like you said about the Post Office, my argument is that they should not exercise that power - it would be self-defeating protectionism. What did oil importers do to "deserve interference," exactly? What did US exporters do?

I would think that for larger countries, like the US, the terms of trade would be better with a tariff.

Beggar thy neighbour does have the salutary effect of beggaring one's neighbours, thereby making oneself appear wealthier by comparison. It's an entirely illusory "gain," of course, as every sensible economist from Adam Smith onwards has pointed out.* People are not generally made better off by preventing them from making trades they would like to make. Surely a Libertarian does not need this most elementary principle of free exchange explained?

It would reduce the power of oil exporting nations, and if managed correctly would create incentive for the US to be more innovative now with the vast deposits of fossil fuels it does have (like coal, and oil shale).

Quite the contrary. One does not encourage innovation by discouraging competition. By removing the need for US producers to be internationally competitive, giving them a protected "backyard," they would have less reason than ever to be innovative, rather than merely extractive.

Again, you need to look at the greater scheme. We don't need to jack up the price of energy (fossil fuels in this case). The result would be a shock to the economy, as energy affects the entire supply chain, and the real wealth of the consumer (more money per gas fill means less disposable income). What I propose is to leave oil as it is, but drastically reduce the price for the energy production we do want to move toward. Over time, consumers will favor cars like the GM Volt, since the operation costs will be much, much less, and the supply of "fuel" will be freely available.

You seem to have this very strange blind spot for subsidies and protectionism. Taxation, you rail and rant about as if it were your own personal cross to bear to Calvary. And debt? Don't even get you started.

But, as soon as we're talking about the government providing incentives and tax breaks for XYZ, the notion that this all must be paid for with either taxes or debt does not seem to disturb you particularly. It's all the same stuff - take money from someone, give it to someone else - right?

There is a market-clearing price for these commodities. Holding a price for something as fundamental as energy below that level is tough. Government subsidizing the consumption of energy would be incredibly expensive, wasteful, and almost certainly self-defeating. Unlike a targeted carbon tax, which would discourage generating carbon and and encourage almost everything else, this plan would encourage non-carbon energy consumption, and discourage almost everything else (through taxation or debt). Seems inefficient to me.

-Jester

*With the possible exception of Raul Prebisch, who, IMO, was dead wrong, although for interesting reasons.