Thursday, March 8, 2012

More Energy Ridiculousness from the Government Knows Best Elitist Crowd

Recently we noted the government's $7,500 subsidy for those consumers choosing to purchase the Chevy Volt. The result appears to be that consumers don't like the deal.

Thus, since consumers aren't all that interested in the current taxpayer funded government subsidy, maybe government should increase the taxpayer offer to $15,000 or even $30,000 per purchase.

In other words, why stop at $7,500? Which politician picked that number anyway? And how? Maybe we should just let GM give the Volts away! Remember, OPM is always free to the politician giver.

To be sure, it's only taxpayer money the politicians are spending. And if GM could move more Volts off their lots, they wouldn't have to lay off so many UAW workers. Or would they?

As a matter of fact, yes they would. GM is making more cars than they are selling. What the subsidy is designed to do is alter the mix of cars they are selling. Not the total.

You see, the subsidy is intended to get consumers to buy the electric powered car in lieu of a conventional vehicle. And the "sell" to the public is that this will somehow reduce our dependence on oil imports.

If that's the idea behind the subsidy, there's a much better way to do that. And a much cheaper way. As well as a much easier way. And one which has a much greater probability of success as well.

With respect to GM's electric car subsidy, no more or no fewer cars in total will be sold by the industry as a whole, whether the Volt proves to be a consumer success or not. Only the balance of sales, or mix, would be impacted.

In the end, consumers will choose whether to buy or not buy, but they're not going to buy any more cars in total, even if they do buy the Volt. But that Volt dog apparently won't hunt even with taxpayer funding at $7,500 per purchase. On that the consumer seems to have spoken.

Once again, government knows best "winner picking" and free market interference has failed. As it usually does. But that's not the end of our story today about energy and subsidies.

So let's employ some common sense and see how to avoid such things as future electric car and wind-power subsidies. And that same common sense will tell us how to get oil companies to pay more taxes with a smile on their faces, while leaving taxpayers and many job seekers smiling as well. Maybe even a few politicians.

As we all know by now, President Obama wants the fat cat bad guy led oil companies to pay more income taxes. Well, there's a really simple and easy way to achieve that objective, Mr. President. We'll not only get them to pay lots more in taxes, but we'll at the same time work toward satisfying your stated objective of "saving the middle class."

Sound too good to be true? Well, it's not even all that hard. Listen up, please, and let common sense lead the discussion.

All we have to do is allow the domestic oil and energy companies to produce, transport and sell more oil and other energy at global prices. That way they'll earn tens of billions more and happily pay billions more in taxes on those earnings.

They will also employ tens of thousands of additional people putting in the required infrastructure, transporting and operating the equipment and facilities needed to produce, ship and sell the added petroleum.

We won't even count the reduced anxiety of American citizens resulting from the lessened reliance on rogue nations that supply us that oil today. How's that for a budget and jobs enhancer, Mr. President?

However, instead of exercising common sense and making an all-out effort to achieve energy independence, too many of our politicians, including the President, opt to play the blame game by castigating the oil companies. At the same time, they're playing the taxpayer financed subsidy game for too many unprofitable and government sponsored electric car, wind and solar providers. What a crock!

Now let's consider the proposed renewal of a multi-billion dollar wind-power subsidy by our government knows best leadership. Remember, it's just OPM to them.

Republicans Blow With the Wind provides some details:

"Congress finally ended decades of tax credits for ethanol in December, a small triumph for taxpayers. Now comes another test as the wind-power industry lobbies for a $7 billion renewal of its production tax credit.

The renewable energy tax credit—mostly for wind and solar power—started in 1992 as a "temporary" benefit for an infant industry. Twenty years later, the industry wants another four years on the dole . . . so consumers will be required to buy wind and solar power no matter how high the cost.

The truth is that those giant wind turbines from Maine to California won't turn without burning through billions upon billions of taxpayer dollars. In 2010 the industry received some $5 billon in subsidies for nearly every stage of wind production. . . .

The most dishonest claim is that wind and solar deserve to be wards of the state because the oil and gas industry has also received federal support. That's the $4 billion a year in tax breaks for oil and gas (which all manufacturers receive), but the oil and gas industry still pays tens of billions in federal taxes every year.

Wind and solar companies are net tax beneficiaries. Taxpayers would save billions of dollars if wind and solar produced no energy at all. A July 2011 Energy Department study found that oil, natural gas and coal received an average of 64 cents of subsidy per megawatt hour in 2010. Wind power received nearly 100 times more, or $56.29 per megawatt hour.

Most Congressional Democrats will back anything with the green label. But Republican support for big wind is a pure corporate welfare play that violates free-market principles. . . .

{Six influential Republican Senators advocate extending the wind subsidy by arguing:} "It is clear that the wind industry currently requires tax incentives" and that continuing that federal aid can help the industry "move towards a market-based system," said the letter. What's the "market-based" timetable—100 years? In the House 18 Republicans have joined the 70-Member wind pork caucus. . . .

Here's a better idea. Kill all energy subsidies—renewable and nonrenewable, starting with the wind tax credit . . . . This would do more to create jobs than attempting to pick energy winners and losers. Mandating that American families and businesses use expensive electricity doesn't create jobs. It destroys them."

Summing Up

To repeat, oil companies make profits and pay billions in taxes. If they were allowed to produce and sell more oil, they would generate more jobs, profits and pay billions of dollars in additional taxes.

On the other hand, Congress and the President want to give taxpayer money away to the politically handpicked and unprofitable potential "someday winners" of the distant future. Ethanol, Solyndra, Chevy Volt, solar and wind-power are a few top-of-mind examples.

It seems that politicians would rather punish the taxpayers by preventing domestic energy companies from growing their sales base, creating jobs, increasing profits and paying more taxes. By so doing, they increase our nation's reliance on petroleum based imports and thereby jeopardize our national security.

It's nothing more than non-common sense based ridiculousness at work.

We're witnessing total insanity from a government that says it's "here to help create jobs and save the middle class."

To repeat, what a crock!

Thanks. Bob.

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