Surely the effects would be positive with regard to USA’s geo-political positioning, but with regards to economics, I’m not very informed in this regard.
Given that oil prices are so interlaced with the movements of the economy would USA energy independence via new technologies, which i assume would dramatically drive down the price of oil, have a positive or negative result on the american economy?
Right now? Would make it worse since the alternative energy costs would be mre expensive.
If oil is cheap the cost of alternatives would be higher… but even then their is a side benefit to having our energy produced domestically rather than importing it… jobs, profits, etc. Off-hand I think this would offset the higher cost of the energy.
I still think a floor tax on oil/gas would be the best way to get this going. Set a minimum price, and let the market develop alternatives.
All depends on how “Energy independence” is achieved.
Speaking strictly from a energy and recession standpoint we could start producing a crap ton of electric vehicles. We could then build another cap ton of coal burning power plants. Couple the above with exploration and exploitation of domestic oil resources for “Product” use, mainly plastic, fertilizer etc etc., all the things that people forget about, and we are “Energy independent”.
IMHO the above would be much better for us as far as “Recession” goes and would transfer some 700B dollars back into the US economy and probably end up costing less than importing oil.
Of course the catching point here is the environmental aspects of doing this.
OTOH if we artificially subsidize prices until other “Alternatives” are seemingly cheaper we actually induce a recession by, in essence, returning us to 4$+ a gallon of gas…which of course was part of what got the current ball rolling in the first place.
Of course some will claim that “This would be worth it” for the environmental benefits. But this is a discussion about recession and energy independence, not environment, so that route would make the recession worse.
~Matt
OTOH if we artificially subsidize prices until other “Alternatives” are seemingly cheaper we actually induce a recession by, in essence, returning us to 4$+ a gallon of gas…which of course was part of what got the current ball rolling in the first place.
If the difference is made up via a floor tax, then the added retail expense for gas is merely extra tax revenue… which theoretically could be returned in some way (rebates or lower of other taxes) while the economy is in serious trouble. Meanwhile such a tax will stimulate massive research and development into alternate fuels, which is something that would certainly be beneficial in our present economy.
I think a floor at ~$70/bl would be enough, and this would put gas ~$3.
If the difference is made up via a floor tax, then the added retail expense for gas is merely extra tax revenue.
Problem is even under PERFECT scenario there is some cost added to the “Taxing” Process. For every Dollar that goes in to Washington something less comes out, in some case A LOT less. That money is consumed uneseccarily and ineffeciently and produces next to nothing.
That’s under perfect conditions. Under realistic conditions the amount that actually comes out, which is less that went in, is poorly spent and often times never makes it back to the “Tax payer”, but only to the few “Targeted” recipients.
To compound matters even more you remove that capital from the market which lowers the possibilities of a “New” more “Viable” alternative to be created even if the bulk is reinvested into “Pet alternatives”
In short you end up costing the consumer more than they need pay no matter how you look at it. That will cause a recession.
~Matt