Econ 101 - Government subsidies, or Don't Be Silly

I keep reading about "progressives", a misnomer if I've ever heard one, who decry the government handouts to corporations... the most common target is what they lovingly refer to as "Big Oil"... Big Oil, they say, should not receive government subsidies because they're corporations... they're big enough to not need the money... and they're right; the companies do not need the money... but this shows a terrible naiveté about how money works.

let's say a barrel of crude oil costs $104, as it did in July of 2014... Big Oil is allowed a tax credit off this price due to an exception in the tax code... they're allowed to "write-off" about 15% of the cost of extraction from their federal taxes... now, this doesn't equate one-to-one to dollars they save, but some sources say this, along with other tax breaks, equates to over $4 billion dollars each year.

if we stop those tax breaks, the government gains $4 billion dollars... but where does that come from?... will Big Oil swallow that bitter pill?

don't be silly.

these costs will be borne by the consumers of Big Oil... the truckers who bring goods to market will pay the most... will they bear the lion's share alone?

don't be silly.

will the grocery stores and retail outlets pay that price for the increased costs of delivering the good they sell?

don't be silly.

the consumers, the American people, will shoulder the cost... reduction or removal of any government subsidy is an indirect tax on the populous... to believe otherwise is to believe in fairy tales.

speaking of fairy tales, there is something the government can do to offset the damage done to their citizens... they could reduce the taxes imposed by the government on the sale of gasoline and other petroleum products.

don't be silly.

the federal and state governments make 40 cents per gallon sold in the United States... Exxon, for example, made 7 cents per gallon (in 2011)... these progressives want Big Oil to pay these taxes out of their pockets, yet will they open their own purses to help those actually paying the costs?

Don't. Be. Silly.

• Crude Oil: 67%.
• Refining Costs and Profits: 12%
• Distribution, Marketing, and Retail Costs and Profits: 9%
• Taxes: 12%.
• Federal excise taxes were 18.4 cents per gallon
• State excise taxes average 23.52 cents per gallon

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Source:
This Eye-Opening Map Shows The Reason Gas Is More Expensive And Who’s Profiting The Most - The Federalist Papers; by Steve Straub on July 14, 2014

Happy 100th Birthday, Big Oil Tax Breaks - ThinkProgress; by Rebecca Leber on March 1, 2013

What do I pay for in a gallon of regular gasoline? - US Energy Information Administration FAQ

How much oil is consumed in the United States? - US Energy Information Administration FAQ

Who Really Gets Rich Off High Gas Prices? - Wall Street Journal; By Drew Johnson on August 2, 2012

Who makes more from sales at the pump – industry or government? - ExxonMobile; by Ken Cohen August 8, 2012

Gasoline Tax Profits - Factcheck.org; on April 11, 2008

Who Really Gets Rich Off High Gas Prices? - Salon.com; by Richard Rider on August 9, 2012

State and Federal Treasuries "Profit" More from Gasoline Sales than U.S. Oil Industry - TaxFoundation.org; By Jonathan Williams, Scott A. Hodge on October 26, 2005

who is the terrorist? - blog repost

According to the Wall Street Journal, Glenn Beck’s media company The Blaze approached Current Media about a sale last year, but was told in the words of one source that “the legacy of who the network goes to is important to us and we are sensitive to networks not aligned with our point of view."

Beck's representative did not immediately confirm the report, though Beck's own website has posted on the news and he has promised to address "the full story" on his radio program today.

In explaining the reasons for selling to al-Jazeera, Current co-founder and CEO Joel Hyatt told the Journal that the Qatari-based broadcaster "was founded with the same goals we had for Current," including "to give voice to those whose voices are not typically heard" and "to speak truth to power."

Those familiar with al-Jazeera English know that it is a straight-forward, hard-hitting, and thorough news-gathering channel. But critics on the right will no doubt find irony in the fact that Current, which was co-founded by climate change advocate Al Gore, agreed to be bought out by a broadcaster owned the Qatari government, and therefore funded by oil.

Those critics will also find irony in the fact that Gore and Current wanted to close the deal before Dec. 31, in order to avoide the higher tax rates that were to take effect on Jan. 1 -- a detail flagged by Brian Stelter, who broke the news about al-Jazeera's bid. (The deal was not signed until Jan. 2.)

Beck will likely have a field day with this, not least because al-Jazeera once ran an op-ed comparing him to a terrorist.

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source
Glenn Beck tried to buy Current TV - POLITICO.com by DYLAN BYERS @ Politico | 1/3/13 9:27 AM EST

soylent green energy - it's made of people!

The UN has called for an immediate suspension of government-mandated US ethanol production, adding to pressure on Barack Obama to address the food-versus-fuel debate in the run-up to presidential elections.

Most US ethanol is made from corn. The dispute over ethanol promotion pits states such as Iowa that benefit from higher corn prices – and in some cases are swing states in the election – against livestock-raising states such as Texas that are helped by lower corn prices.

The UN intervention will be seized upon by state governors, lawmakers and the meat and livestock industry, who have expressed alarm at surging prices for corn. Members of the Group of 20 leading economies – including France, India and China – have already expressed concern about the US ethanol policy.

The US is poised to divert around 40 per cent of its corn into ethanol because of the Congress-enacted mandate despite “huge damage” to the crop because of the worst drought in at least half a century, José Graziano da Silva, director-general of the UN’s Food and Agriculture Organisation, warned.

“An immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channelled towards food and feed uses,” he wrote in an opinion piece in the Financial Times.

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source:
As Starvation Looms, UN Begs Obama to Suspend Biofuel Mandates
via Hawaii Free Press from:
Environmentalists Implementing their Population Control Plans - August 9, 2012

Historic Firsts

i haven't researched these, but thought i'd re-blog this, if only as food-for-thought... i'll update as i learn more.

Doug Ross provides a handy rundown of just how historic our beloved President has been...

 

A few examples:

 

• First President to Violate the War Powers Act
• First President to Orchestrate the Sale of Murder Weapons to Mexican Drug Cartels
• First President to be Held in Contempt of Court for Illegally Obstructing Oil Drilling in the Gulf of Mexico
• First President to Require All Americans to Purchase a Product From a Third Party
• First President to Golf 90 or More Times in His First Three Years in Office

Read on for nearly 30 more historic firsts...

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source:
The Mental Recession: A Complete List of Historic Firsts For Our Preside...

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EDIT
the original list by Doug Ross:

• First President to Preside Over a Cut to the Credit Rating of the United States Government
• First President to Violate the War Powers Act
• First President to Orchestrate the Sale of Murder Weapons to Mexican Drug Cartels
• First President to issue an unlawful "recess-appointment" while the U.S. Senate remained in session (against the advice of his own Justice Department).
• First President to be Held in Contempt of Court for Illegally Obstructing Oil Drilling in the Gulf of Mexico
• First President to Defy a Federal Judge's Court Order to Cease Implementing the 'Health Care Reform' Law
• First President to halt deportations of illegal aliens and grant them work permits, a form of stealth amnesty roughly equivalent to "The DREAM Act", which could not pass Congress
• First President to Require All Americans to Purchase a Product From a Third Party
• First President to Spend a Trillion Dollars on 'Shovel-Ready' Jobs -- and Later Admit There Was No Such Thing as Shovel-Ready Jobs
• First President to sue states for requiring valid IDs to vote, even though the same administration requires valid IDs to travel by air
• First President to Abrogate Bankruptcy Law to Turn Over Control of Companies to His Union Supporters
• First President to sign into law a bill that permits the government to "hold anyone suspected of being associated with terrorism indefinitely, without any form of due process. No indictment. No judge or jury. No evidence. No trial. Just an indefinite jail sentence."
• First President to Bypass Congress and Implement the DREAM Act Through Executive Fiat
• First President to Threaten Insurance Companies After They Publicly Spoke out on How Obamacare Helped Cause their Rate Increases
• First President to Threaten an Auto Company (Ford) After It Publicly Mocked Bailouts of GM and Chrysler
• First President to "Order a Secret Amnesty Program that Stopped the Deportations of Illegal Immigrants Across the U.S., Including Those With Criminal Convictions"
• First President to Demand a Company Hand Over $20 Billion to One of His Political Appointees
• First President to Terminate America's Ability to Put a Man into Space.
• First President to Encourage Racial Discrimination and Intimidation at Polling Places
• First President to Have a Law Signed By an 'Auto-pen' Without Being "Present"
• First President to Arbitrarily Declare an Existing Law Unconstitutional and Refuse to Enforce It
• First President to Tell a Major Manufacturing Company In Which State They Are Allowed to Locate a Factory
• First President to refuse to comply with a House Oversight Committee subpoena.
• First President to File Lawsuits Against the States He Swore an Oath to Protect (AZ, WI, OH, IN, etc.)
• First President to Withdraw an Existing Coal Permit That Had Been Properly Issued Years Ago
• First President to Fire an Inspector General of Americorps for Catching One of His Friends in a Corruption Case
• First President to Propose an Executive Order Demanding Companies Disclose Their Political Contributions to Bid on Government Contracts
• First President to allow Mexican police to conduct law enforcement activities on American soil
• First President to Golf 90 or More Times in His First Three Years in Office

green killers

A July 2008 study of the wind farm at Altamont Pass, Calif., estimated that its turbines kill an average of 80 golden eagles per year. The study, funded by the Alameda County Community Development Agency, also estimated that about 10,000 birds—nearly all protected by the migratory bird act—are being whacked every year at Altamont.

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source:
Robert Bryce: Windmills Are Killing Our Birds - WSJ.com

a lovely ballet ensues, so full of form and color

in a letter to Ken Salazar, Senator David Vitter (R-LA) warned of a severe revenue falloff attached to declining energy lease sales... $10,000,000,000 per year falloff... but the President promised to increase oil production in the U.S.

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[W]e should increase safe and responsible oil production here at home. Last year, America’s oil production reached its highest level since 2003. But I believe that we should expand oil production in America – even as we increase safety and environmental standards.

-President Barack Obama - May 14, 2011

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is this what happened?... let's ask someone close to the problem... say, a Congressman from a Gulf state... like Sen. David Vitter.

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September 28, 2011

The Honorable Ken Salazar
Secretary, Department of Interior
1849 C St., NW
Washington, DC 20240

Director Michael Bromwich
Director, Bureau of Ocean Energy Management Regulation and Enforcement
1849 C St., NW
Washington, DC 20240

Dear Secretary Salazar and Director Bromwich:

We would like to bring to your attention the steep decrease in revenue from bonus bids that result from zero Outer Continental Shelf lease sales in FY2011. In FY2008, revenue from bonus bids on offshore leases was approximately $10 billion. For FY2011, the amount is $0.

Our country faces a severe fiscal crisis as well as significant economic challenges related to private industry job creation. Revenue cannot be generated from lease sales that do not occur, and jobs cannot be created on leases that private industry cannot acquire.

Revenue from the offshore lease sale program has dropped from $10 billion to nothing in just three years. As a result, the revenue that Gulf States can anticipate from their share of bonus bids under GOMESA is $0 for FY2011. This is clear evidence that the financial scope of these decisions reach beyond the Federal Treasury.

The 100 percent falloff in bonus bid revenue from 2008 to 2011 will also have long-term economic impacts that include lost jobs, lost royalties, and lost rental fees—all of which have a negative impact on our employment and fiscal challenges. If companies continue to face challenges in obtaining permits, future lease sales revenue will be negatively impacted by that uncertainty. No company wants to own a lease if there is not a reasonable expectation that its exploration plan or permits will be approved.

In order to better understand the direction the agency is headed with federal offshore leasing we ask that you provide the status of all anticipated lease sales for FY2012, as well as current planning areas under review for inclusion in the next 5-year plan.

Sincerely,
David Vitter
United States Senate

Richard Shelby
United States Senate

Kay Bailey Hutchison
United States Senate

John Cornyn
United States Senate

Cc: President Barack Obama

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that's $10 billion just from leases... that doesn't include the jobs working these sites... the construction of the rigs... the infrastructure, the maintenance jobs, the design professionals, the supply vessels, etc.
to quote the movie, The Fifth Element:

Now, think about all those people that created them. Technicians, engineers, hundreds of people, who will be able to feed their children tonight, so those children can grow up big and strong and have little teeny children of their own, and so on and so forth. Thus, adding to the great chain of life.

but Obama wants another stimulous bill?... how about we let companies create the jobs they are already able to?

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source:
Senator David Vitter

the true face of immigration

Main Article:
Some Immigrants Turn to Tea Party

Why do immigrants leave their country? Because they don't have opportunity and they don't have freedom, because politicians control everything. We come to America and we are going to have the same crap? Then we might as well go back there.

Maxine Waters (D-CA) Wants To Socialize Oil Companies

Vera Martin moved to the U.S. from what is now the Czech Republic when she was 5 years old. Now, she is hitting the campaign trail for her husband, who is running for state Senate, and Mancheno-Smoak.
"I come from a socialist country," said Martin, who worked for a consulting firm that helped her country's transition to capitalism after the fall of the Communist Soviet Union. "I know what socialism means. I know what socialized health care is like and I know what you pay to support that system."

Obamacare won't cover illegal immigrants? Yes it will, says Congressional Research Service

"To me, anyone that left their country to come to this country is a tea partyer," said Marta Saltus, one of Smoak's supporters whose family is Argentinean.

A Legal Immigrant's Take on Illegal Immigration
Legal immigrant opposed to amnesty

what's so difficult to understand?

Thomas Sowell, a Rose and Milton Friedman senior fellow on public policy at Stanford University’s Hoover Institution and author of “Economic Facts and Fallacies,”

on taxing the rich:

The rich themselves are seldom hurt by that and often when you bring down the tax rate — the start of 1920s, also under Kennedy and Reagan, and then later, George W. Bush — as we bring down the tax rate, they take their money out of the tax shelters, they bring their money home, back home from abroad and you create more jobs.

on government health care:

What they call bringing down the cost of health care is refusing to pay the price of health care. You know, you can always bring down the cost of anything by not paying it, but of course, there are repercussions for that and you see this in countries where the government has taken over health care, you see deterioration.

on taxing oil/energy companies:

When you put huge taxes on electric utility companies... [consumers will pay] higher prices that they pay for everything from food to electricity to gasoline and so forth.

meet the new boss

BEFORE:

We cannot drill our way out of our addiction to oil : Audacity of Hope
Drilling is a stop-gap measure, not a long-term solution : Democratic National Convention, Barack Obama
(emphasis added)

HOWEVER:

Drill, Brazil, Drill!

• "We want to help you with the technology and support to develop these oil reserves safely. And when you're ready to start selling, we want to be one of your best customers."

(emphasis added)

NOW:

Obama's Goal: Cut Oil Imports By One-Third : NPR
Obama Lays Out Plan to Cut Reliance on Fuel Imports : NYT

• "Meeting this new goal of cutting our oil dependence depends largely on two things: finding and producing more oil at home, and reducing our dependence on oil with cleaner alternative fuels and greater efficiency."

(emphasis added)

ALSO favorite "blast from the past":

We Can't Drill Our Way Out of Our Energy Problems : Van Jones

• "The people who told us they could bomb and torture our way to a peaceful world, they had their turn. It's our turn now. People who say we could drill and burn our way to a good environmental and energy outcome have had their turn. It's our turn now. The people who say they could borrow and spend their way to a healthy economy, they had their turn."

(emphasis added)

so, what are we doing now?... bombing, drilling, and borrowing.
this is the "Change" you can believe in?