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Don't blame those 'greedy' oil companies
by Kelley Wright 5/24/2008 12:01 AM ET
As you fill your gas tank for your next summer trip, ask yourself how gas prices have reached current nosebleed levels. For many, the easy answer is to curse the "greedy" oil companies. Consider for a moment an alternative reason.
Oil is a commodity and therefore is subject to the laws of supply and demand. In the simplest of terms, when demand begins to put pressure on supply, prices go up; simple Econ 101. In a supply-and-demand situation, there are really only two options; lower demand or increase supply. I don't anticipate that the demand for oil will decrease, as Americans love their cars and love to drive. This leaves us with increasing the supply.
I know there are other fuel and energy alternatives, but none are mature enough or as readily accessible as oil and its byproducts at the present time. They may be in the future, but that doesn't help us out at the gas pump today. While research and development of fuel and energy alternatives will and must go forward, the supply of oil in the interim can be increased and America has vast resources that can be tapped into today.
Blocked in D.C.
Investors Business Daily estimates there are 1 trillion barrels of oil trapped in shale in the U.S. and Canada. Retrieving just a 10th of it would quadruple our current oil reserves. There is a pool of oil in the Gulf of Mexico that is estimated to be as large as any in the Middle East. There is an equally large pool believed to be in Alaska.
The Chinese are attempting to tap into the Gulf oil supply by drilling diagonally from Cuba. I wonder what environmental safeguards they are using?
The fact is that there are environmentally safe methods of extracting oil from shale and drilling in both the Gulf and Alaska. Congress, however, continues to block these efforts. Just last week, the Senate voted to block any extraction from shale in Colorado. In essence, they voted to make your trips to the gas station more expensive, to make air travel more expensive, and to make heating your home more expensive.
That's something to think about in an election year.
Another topic: Social Security
Another issue that concerns many Americans these days is the sustainability of major entitlement programs like Social Security and Medicare. With all of Congress' talk about "saving and preserving" these programs, consider these facts about Social Security:
When Social Security (FICA) was introduced it was promised:
• Participation in the program would be completely voluntary.
• Participants would only have to pay 1% of the first $1,400 of their annual incomes into the program.
• The money the participants elected to put into the program would be deductible from their income for tax purposes each year.
• The money the participants put into the independent trust fund rather than into the general operating fund, would be used only to fund Social Security, and no other government program.
• Payments to the retirees would never be taxed as income.
The millions who have paid into FICA for years and are now receiving a Social Security check every month -- and who then find they are getting taxed on 85% of the money they gave to the federal government to save for them -- may be interested in the following:
• Social Security money has been removed from the trust fund and put it into the general fund so that Congress could spend it.
• The income tax deduction for Social Security withholding has been eliminated.
• Social Security annuities are now taxed.
Now contrast this with the fact that, after violating the original contract, the Congress passed a 100% retirement benefit for members who have served at least one term.
As President Ford said, "A government big enough to give you everything you want, is strong enough to take everything you have."
So instead of spending countless hours agonizing over which candidate to pull the lever for in November, you might be better served by asking your representatives and senators this question: Mr. or Mrs. Senator/Congressman: you are making a claim on what I have produced, which is to say you are asking me to serve you. How have you served me?
Don't blame those 'greedy' oil companies
by Kelley Wright 5/24/2008 12:01 AM ET
As you fill your gas tank for your next summer trip, ask yourself how gas prices have reached current nosebleed levels. For many, the easy answer is to curse the "greedy" oil companies. Consider for a moment an alternative reason.
Oil is a commodity and therefore is subject to the laws of supply and demand. In the simplest of terms, when demand begins to put pressure on supply, prices go up; simple Econ 101. In a supply-and-demand situation, there are really only two options; lower demand or increase supply. I don't anticipate that the demand for oil will decrease, as Americans love their cars and love to drive. This leaves us with increasing the supply.
I know there are other fuel and energy alternatives, but none are mature enough or as readily accessible as oil and its byproducts at the present time. They may be in the future, but that doesn't help us out at the gas pump today. While research and development of fuel and energy alternatives will and must go forward, the supply of oil in the interim can be increased and America has vast resources that can be tapped into today.
Blocked in D.C.
Investors Business Daily estimates there are 1 trillion barrels of oil trapped in shale in the U.S. and Canada. Retrieving just a 10th of it would quadruple our current oil reserves. There is a pool of oil in the Gulf of Mexico that is estimated to be as large as any in the Middle East. There is an equally large pool believed to be in Alaska.
The Chinese are attempting to tap into the Gulf oil supply by drilling diagonally from Cuba. I wonder what environmental safeguards they are using?
The fact is that there are environmentally safe methods of extracting oil from shale and drilling in both the Gulf and Alaska. Congress, however, continues to block these efforts. Just last week, the Senate voted to block any extraction from shale in Colorado. In essence, they voted to make your trips to the gas station more expensive, to make air travel more expensive, and to make heating your home more expensive.
That's something to think about in an election year.
Another topic: Social Security
Another issue that concerns many Americans these days is the sustainability of major entitlement programs like Social Security and Medicare. With all of Congress' talk about "saving and preserving" these programs, consider these facts about Social Security:
When Social Security (FICA) was introduced it was promised:
• Participation in the program would be completely voluntary.
• Participants would only have to pay 1% of the first $1,400 of their annual incomes into the program.
• The money the participants elected to put into the program would be deductible from their income for tax purposes each year.
• The money the participants put into the independent trust fund rather than into the general operating fund, would be used only to fund Social Security, and no other government program.
• Payments to the retirees would never be taxed as income.
The millions who have paid into FICA for years and are now receiving a Social Security check every month -- and who then find they are getting taxed on 85% of the money they gave to the federal government to save for them -- may be interested in the following:
• Social Security money has been removed from the trust fund and put it into the general fund so that Congress could spend it.
• The income tax deduction for Social Security withholding has been eliminated.
• Social Security annuities are now taxed.
Now contrast this with the fact that, after violating the original contract, the Congress passed a 100% retirement benefit for members who have served at least one term.
As President Ford said, "A government big enough to give you everything you want, is strong enough to take everything you have."
So instead of spending countless hours agonizing over which candidate to pull the lever for in November, you might be better served by asking your representatives and senators this question: Mr. or Mrs. Senator/Congressman: you are making a claim on what I have produced, which is to say you are asking me to serve you. How have you served me?
Don't blame those 'greedy' oil companies
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