SetAmericafree - More Quickly
SetAmericaFree.org is a website dedicated to weaning us from our dependence on (foreign) oil. They do a terrific job of outlining the problems that this dependence causes for all of us. They have a lengthy solution to the problem. That solution involves a host of subsidies to every manner of alternative energy source. They proudly announce that there plan will result in the decrease of our utilization of oil be 8 million barrels a day by 2025 a span of 19 years.
The problem is that they still don’t address the underlying problem which is too much demand. A significant tax on energy combined with a rebate would curb that demand and steer people toward the alternative fuel of their (not the government’s) choice and set America free a lot more quickly than the plan proposed by those for whom it is their stated purpose. When market forces came into effect between 1978 (the last year before the second oil embargo) and 1982 our oil consumption dropped from 18.9 million barrels a day to 15.3 million barrels/day. That is 3.6 million barrels in only four years! That occurred without any of the expense and inefficiencies of government subsidies. (See Why Not Use the Money to Support Alternative Energy).
We all want to get to the same place; I just want to get there a whole lot faster, and we can.
The problem is that they still don’t address the underlying problem which is too much demand. A significant tax on energy combined with a rebate would curb that demand and steer people toward the alternative fuel of their (not the government’s) choice and set America free a lot more quickly than the plan proposed by those for whom it is their stated purpose. When market forces came into effect between 1978 (the last year before the second oil embargo) and 1982 our oil consumption dropped from 18.9 million barrels a day to 15.3 million barrels/day. That is 3.6 million barrels in only four years! That occurred without any of the expense and inefficiencies of government subsidies. (See Why Not Use the Money to Support Alternative Energy).
We all want to get to the same place; I just want to get there a whole lot faster, and we can.
posted by Geoff Berg | 6:48 PM
1 Comments:
Hi there--
You have some interesting ideas, but you might do well to consider how the market would respond to such a system. As I understand your plan, the government would take money away from individual consumers, and then give them the money back at the end of the year. This "tax" would then create incentive to conserve, as individuals would have the illusion of being hurt by high gas prices, but it would only be an illusion because they would get it back at the end of the year.
One problem with this idea is that there would likely emerge a financial market whereby institutions would lend individuals "gas money" up front (presumably at some reasonable interest rate), and then the individuals would pay this off when they received their government rebate at the end of the year.
This would essentially replicate what mortgages do for home purchasing. Institutions lend money to individuals who can then make purchases with values (houses) that vastly exceed what their normal financial situation would allow. And we know from the housing market that this arrangement has not resulted in a diminshed demand for houses.
So I suspect that your plan would create financial institutions that would do the same thing with gas, thus eliminating (or reducing) the cuts in demand that your plan was intended to create.
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