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Wednesday, September 07, 2005

Back to Politics ... Iraq and Gas Prices

Congressman Ron Paul has filed another interesting and important report. He's hoping (as I am) that when Congress shows back up to work this month they immediately suspend the federal gas tax ($.184 /gallon).

But he mentioned something else I want to highlight here.
  • U.S. taxpayers paid almost $3 billion last year to buy gasoline for Iraqi residents and citizens.
It is my understanding that this happens because Iraqis didn't have to pay market prices for gasoline before the war. (Logically they would likely be resentful of an invading army that overthrew their government and then failed to continue this subsidy.) Here's Ron Paul's comment on this problem (from the article linked above; emphasis mine):
  • Consider this: Iraqis can buy gas for as little as five cents per gallon, courtesy of American taxpayers! We’re talking about imported refined gas, because Iraqi refineries are not operating. Iraqi officials, using American tax dollars, buy this fuel from the Saudis or other OPEC nations at market rates. This subsidy to Iraq cost us nearly $3 billion in 2004 alone. What kind of foreign policy justifies using your tax dollars to subsidize gas prices in an oil-rich nation, while prices skyrocket in the U.S.?

Note also that so long as American tax dollars buying gas for folks in Iraq, American tax dollars are directly benefiting the insurgents that are blowing up our troops. I am not at all pleased to know that dollars the federal government has taken from me are being given to people who are blowing up Marines.


Anonymous This Love said...

I agree. This is an outrage.

11:16 AM, September 07, 2005  
Anonymous Anonymous said...

As an international man of leisure, I find this unsettling.

11:32 AM, September 07, 2005  
Blogger garrett said...

Some of the things I read suggest opportunities for "leisure" on the international scene will be significantly diminished (especially for tall Americans) over the coming decades.

1:07 PM, September 07, 2005  
Anonymous Anonymous said...

There are 9 Cold Stone Creameries within 20 miles from me. That computes to a lot of driving. Oh how I hate the irony.

1:20 PM, September 07, 2005  
Anonymous this love said...

I love waffle cones, I think I love you

1:21 PM, September 07, 2005  
Blogger Chris said...

Sound logic here. For once, I agree in principal with Rep. Paul. I have not heard of these Iraqi gas subsidies, I'd like to read more.

I do think that the increase in the worlwide demand for oil (China and India) is overlooked in this piece, and is an important factor in the rise of prices from $20 to $65.

Speaking of bad taxes, did you know that airline tickets are taxed at a higher overall rate than cigarettes?

9:36 PM, September 07, 2005  
Blogger garrett said...

Thanks for the 411. I didn't know the specifics, but I know I am outraged every time I compare the price of the ticket to the total amount I'm being charged.

I have grown to despise all taxes. I look forward to someday thoroughly digesting Murray Rothbard's Man, Economy & State, in which (I'm told) he totally eviscerates all arguments in support of any government tax.

Check it out!

P.S. I'll look for some more info on the Iraqi gas subsidy.

10:19 PM, September 07, 2005  
Blogger Chris said...

I too have spent time wondering for what do we actually need taxes and government. I hate taxes as much as the next guy, but I suppose that we do need to support the following programs that the free market is not particularly well-equipped to handle:

National defense
Disaster recovery
Food/Drug regulation

1:41 PM, September 08, 2005  
Blogger garrett said...

Of those, the only one our Founding Fathers thought the federal government needed to be involved in was national defense.

Here's my thoughts on the other topics...

Police is an appropriate government function. Just as we probably need some criminal laws. But police should NOT be federal. Police should be local. And should be enforcing LOCAL criminal laws, not federal.

On education, I can point you to some pretty good Gary North columns arguing that not only is public education not working (generally) and a bad idea, it is also contrary to the Bible. I don't know whether he's right, but the columns are some interesting reading. My recent thinking on education trends to wondering what outcome a cost-benefit analysis would produce. No question there are a lot of people who have done a lot of good for the world because of public education who might not have (probably wouldn't have) otherwise been educated. Bigotry regarding the ability of groups of people who generally lacked the resources to have schools and so forth being a terrible thing that produced centuries of injustice. But the cost of public education is pretty high. And it gets ever more expensive and arguably is producing worse and worse results. I'm pretty sure we won't be putting our children into public schools down here. I'm working on a column of my own about why some of the skills required to succeed in public schools are in many cases the opposite of the skills required to enhance society and generate wealth (e.g., schools teach - don't they? - that being wrong is a bad thing or that making mistakes is a bad thing; but scores of successful businesspersons and entrepreneurs have built lasting and successful enterprises through a trial and error - emphasis on the ERROR - experience).

This one is pretty easy for libertarians to disagree with. So I do. The idea here is a sound one as well, I think (like all libertarian ideas! Ha ha.). Namely that the free market will solve these problems. Businesses need customers to make money. Businesses like to make money. Businesses will make enormous efforts and so forth to earn customers and keep customers. Businesses are generally dis-incentivized to create products that are unreasonably dangerous for customers and so forth. If businesses do create products that are unreasonably dangerous to customers, customers will stop using the product. Granted injuries and mayhem could result without goverment oversight, but: (1) injuries and mayhem still result all the time even with the blizzard of regulations and the labyrinth of government chutes and ladders businesses are required to negotiate to bring a product to market today; (2) government oversight drives the cost of bringing a product to market up enormously and probably the increased cost is significantly higher than the benefits of the regulation; and (3) courts are standing by to evaluate lawsuits brought against businesses that make products that injure people. There's also the corruption factor - bureaucrats can of course be corrupted. There's a lot of money at stake. So politicizing which products come to market and from whom is enormously dangerous to consumers and I would argue probably more dangerous to consumers than an absence of regulation would be. Of course courts and judges can be corrupted too. But I like facing that cost/risk better than prior-to-market government regulators.

On disaster recovery, I'm prepared to disagree with you. I don't think the government should be involved in disaster recovery. Obviously Hurricane Katrina has prompted some thinking about this. My current thinking on this topic trends to believing that if governments (primarily federal) didn't seize for itself a basically monopolistic control over disaster relief, there would be a very healthy, reliable and responsive group of private sector companies (probably hired by or working for insurance companies) performing this service. My idea is that insurance companies have a direct financial incentive to reduce the amounts of claims resulting from a diaster, and the people affected by a disaster have a direct personal and financial incentive to protect themselves and their belongings. Note also that the people directly affected by the disaster and the insurance companies are the parties who are probably in the best position of anybody to know what actually needs to be done as well. So private persons and insurance companies are probably the right people to be tasked with the responsibility for disaster recovery.

Obviously one counter-argument to everything I've said above is that there are scores of people who don't have insurance, so insurance companies don't have a financial incentive to do diddly for them. That is of course a difficult assertion for me to overcome. And I haven't actually figured out a way around it yet. Other than what I understand to be the sort of standard libertarian response - if the government wasn't in there screwing everything up and making things ever so much more expensive, more people would be able to afford insurance. I'm intending to make an argument that I don't fully understand yet but that I think is similar to the argument against welfare.

All of that is also difficult for me to reconcile with the ideas that Jesus wants us to be compassionate and help people who are suffering. Although again I think there is something of a boilerplate libertarian response to that - namely that giving people free stuff is actually the opposite of compassionate; it's actually evil because it makes the recipients beholden to (and reliant upon) the giver of the free stuff. Maybe this goes back to that old expression - give a man a fish, and he eats for a day; teach a man to fish and he eats for a lifetime.

That's a lot of typing. My apologies for putting all that in this comments section.

I hope you can find something in there worth continuing to discuss.

Also, Chris, when are we going to get some updates on your wedding and so forth at your blog? Let's see some pictures, man. Come on!!

2:09 PM, September 08, 2005  
Anonymous Long Dong Schlong said...

Can we please have a moment of silence for the memory of Bob Denver? Geeez

4:14 PM, September 08, 2005  

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