Tuesday, February 10, 2015

Republicans have a gas problem (Script)

Me: (Celebratory) Gas prices are finally coming down! I can finally afford to pay my bills!
Dad: (Celebratory) Gas prices are finally coming down, now we can raise gas taxes!
Me: (Shocked) What?!

When I first moved out on my own gas prices were somewhere between $1.06 per gallon and $1.25. I budget down to the last penny, and those prices stayed pretty stable until we entered the War on Terror. Suddenly we suffered gas price shocks. By mid 2004, gas was over $2.00 a gallon, by late 2005, $3.00, and by mid 2008, $4.00. We can debate over what caused the gas shocks, but needless to say that going from filling up my tank from $10.00 a fill up to $55.00, when I was, at the time filling up at least twice a week, made quite a negative impact on my budget. Think about this. That is a price hike from $40 a month to $220.00.
By some miracle, Bush managed to get it fixed, and prices fell to $1.83 a gallon, but by mid 2009, it was already up over $3.00 again, and pushing $4.00 a gallon. In the time since gasoline began to spike, I, and millions like me, who had been living paycheck to paycheck on a tight budget, had no choice but to use credit cards to fill up when my budget fell short. Sadly, I could not make adjustments fast enough to keep up with the price shocks. Credit cards begat advanced payday loans, begat even more credit cards, pawn loans, and eventually a bankruptcy.
I did the best I could to restructure my budget after that, studied economics, and adapter an Austrian Economic view, since the spend happy ways of Keynesianism had proven personally disastrous, but my wife ended up losing her job and was out of work for an extended period of time, leading to credit cards, and advanced payday loans, the works. Eventually, her father passed away, but since he lived in Iowa, I literally had to choose between paying rent, and $4.00 a gallon for a cross country trip. Needless to say, I lost the apartment.
I had to move to Tooele, but I work in Salt Lake. Our gas expenditures have doubled, while our wages have stagnated. Needless to say, that the recent drop in gas prices has been a much needed relief. However, my own party is threatening to muck it up. Some Utah Republicans are pushing for a ten cent per gallon tax increase. Meanwhile, the federal Republicans want to tack on an additional 12 cent per gallon tax increase. At present, the state tax is (x), while the federal gas tax is (y). This would bring the total cost of gas taxes you pay to (z) per gallon. The present price of gas per gallon is (a). Adding the additional taxes to that price it would bring it right back up to (b). Unbelievable.
The excuse is “we need it to pay for roads.” They lament… lament… the fact that gas taxes have not been increased since 1997. That should be being heralded as an accomplishment! After all, the Republicans are supposed to be the ones concerned with kitchen table issues! How many Republicans swore up and down that they would never vote for a policy that would increase your costs of living? And if you live in Utah, thanks to our unique caucus system, how many of those candidates looked you literally in the face and swore this to you, not generally, but personally? For me, as someone who has been involved in Utah’s political scene since 2006, quite a few. And now I am just getting excuses from some (thankfully not all) of those same people!
“We have to do it!” They proclaim. Well I have to eat, and I have been waiting for the oil prices to normalize for quite some time. Why? Because oil prices have been one of the largest contributors to the massive inflation we have been experiencing, even though no one has been willing to talk about it. In fact, to avoid talking about inflation, the Obama administration has excised Energy and food costs from their economic reports, so that they can claim, falsely, that we only have a 2% inflation rate. Add those two back in, and inflation has actually been closer to 10%, until recently. I have cited this previously, please refer to my previous works, I’m not doing it again.
How did this happen? Well, there are a lot of things that factor into it, but the oil shocks have been a major contributor. You see, when all this began, oil was a measly $10.00 a barrel. The increase in oil prices caused an increase in the cost of refinement, and consequently gas. The increased gas prices caused the price of transportation, and consequently shipping, to explode. Hence the reason you used to pay .60 cents for a chocolate bar, but are now paying $1.20 for a smaller bar of chocolate. It’s not just chocolate that has gone up. Eggs, milk, bread, everything, all because of the exploding cost of oil. Naturally, this caused the cost of energy production to climb, impacting electricity and natural gas, and of course housing. Why do you think that there were so many people who suddenly found themselves unable to pay their house payment in 2007? Take a look at this chart. The housing market began to have problems just as gas prices started to surge again, peaking at the summer of 2008, just as the 2008 election was under way, and Lehman Bros ended up collapsing. Much blame has been passed around, over the years, but almost no one else has made this connection, because far too many economists, Republican and Democrat, are rich and too far removed from the problems of Main Street to notice. 
Oil climbed to as much as $150 and has now fallen to $46 a barrel. It can, and will fall back to $10.00 a barrel if Wall Street and our government can resists the urge to act stupidly. The potential is there for all prices to follow a downward trend. Of course, the panicky folks on Wall Street will point out that gas prices have not yet led to overall lower prices. Of course, that has yet to happen because many expect the gas prices to shoot right back up when either the United States, or OPEC cuts production. And if they don’t, the Government’s ill advised attempts to regulate and stop fracking, (a process for collecting Oil that has been going on for the better part of a century and is nothing new), might force US oil and petroleum producers to scale back, which will, of course, trigger the oil prices to go right back up.
Because there is that looming fear of an oil rebound, most other industries are not yet comfortable adjusting prices. If, however, by summer prices have not gone back up, you will start to see the various markets out there begin to correct. Some might refer to this process as deflation, a term Keynesian Economists use to frighten people, but don’t be afraid. This process is hard on Wall Street, at first, but is a boon to Main Street, making it so that we are able to do more with our meager wages. And eventually that more will translate into increased sales, and as more is sold, Wall Street will make more money, and they too, will begin to rebound. Then we will have stable and gradual growth, rather than the booms and busts we keep putting ourselves with our inflationary policies.
Naturally, as prices stabilize, the cost of construction will adjust too, nullifying the need for the increased tax in the first place. However, with the state wanting to add a .10 per gallon increase, and the feds wanting to add .12 cents per gallon, we are staring down the barrel of a .22 cent per gallon tax increase. Imagine if you had been paying $25.00 to fill up your 11 gallon gas tank, this will drive that price up to 27.42 a fill up. This might not seem like much, but until recently, my 11 gallon gas tank was taking $55.00 to fill. This new tax would drive that price to $57.42. And this is just an economy car… it’s quickly approaching $100 for a tank of gas. But take my Dad’s Forerunner, which he estimates takes 20 gallons of gas. In recent months it’s taken as much as $60.00 to fill it up. This tax would add $4.40 to his total costs, should oil rebound, making it $64.40 for a tank of gas.
If you’re still not convinced consider this. I have to fill up twice a week to get to work. My dad has to fill his car once a week. This new tax would add $9.68 to my total gas charges for the month, making it $449.68 a month just to get to work. For my father, whose tank is larger, his costs go up to $257.60, which is less over all, but in larger bursts, since he has to pay more, less frequently. Per year, this tax increase would bring my annual gas charges to 5,396.16 per year, and my father’s to 3091.20. Now are you getting scared? These numbers are, or course, based on the average of what we had been paying prior to the price drops. But I am using these numbers because there is government action on the horizon, by way of pending EPA regulations, that will impact US Oil developers, and consequently the price of oil. With prices at their current levels my annual costs are expected to be 2400.00 a year, and if the government doesn’t muck this up, and oil falls to $10.00 a barrel, that will being my gasoline costs to under $2,000.00. You’ll have to pardon my lack of an exact number, but this car has never seen $10.00 a barrel oil, so I don’t know how much it would cost to fill it with the prices that low, but I cannot imagine it would be much.
But consider also the volatility of gas prices at large. Just this week gas prices at this local 7-11 location (gesture to 7-11) jumped up 12 cents, from 1.77 a gallon, to $1.89 a gallon. The market got spooked, both by the sudden death of the Saudi King, and by talk of gas tax hikes. Also, this week, the Daily Sigil  posted an article stating that if we’re not careful, gas prices could reach $5.00 a gallon and very quickly. (http://dailysignal.com/2015/01/25/5-gallon-gas-way-expert-thinks/?utm_source=facebook&utm_medium=social) Gas taxes increases will only exacerbate that.
For those of you who know me, you know I am no fan of George W. Bush, but he did have this adage which I agree. Never balance the budget on the backs of the poor. And balancing the budget is what is needed. In the 1-26-14 issue of the Deseret News, we learned, in the article, “Lawmakers looking to pump up gas tax this session,” by Lisa Riley Roche, that the Republican congress created a budget for construction projects that takes us clear to 2040. Utah Department of Transportation Executive Director Carlos Braceras told the paper that, “We do not have a hole, but we see one in front of us, and we’re trying to fill it before we get to it.” Indeed, an 11.6 billion dollar hole is on the horizon… the distant horizon. The very, very very distant horizon. The very, very very… (Monty Python clip “Get on with it!.”) Well anyway…
Did you catch that? In other words, we have, right now, enough to complete the projects on going, but ten, twenty years out? Eh, not so much. It would seem to me, reasonable, to insist that we fix the budget then. Realign priorities, cancel superfluous projects. By his own admission, we have time. We also have been running the state on a surplus, so we could use that to offset some of the budget cuts. But instead, House Speaker Greg Hughes (R-Draper) is insisting that Republicans do the “hard thing” and raise taxes. The hard thing is to adjust the budget to accommodate the realities of their overly ambitious construction plans. Raising taxes is a cop out. Raising taxes is lazy.
There is always be another way of dealing with our budgetary problems. By their own accounts, there is no immediate need to raise taxes, so why are they doing it? Maybe to spit in the face of the Conservatives who elected them? Republicans DO do that. I will never understand why. The Democrats coddle their base, Republicans are embarrassed by ours. Perhaps they are trying to appease the very liberal press based out of Salt Lake. Perhaps, they are trying to appease Salt Lake, a liberal bastion in an otherwise Conservative State. I don’t know. But what I do know is that more than one of these guys personally promised me, looked me in the eyes and promised me that they would not vote for anything that makes it harder for me to put food on my table. It was that promise which coaxed me out of semi-retirement from political activism, a very tiring and stressful occupation if you’re anywhere right of center… It will be interesting to see if that promise is upheld or violated.
Tragically, there are some among us who don’t know there is no immediate crisis for our roads, and are calling on me to back off this issue… you know, cause gas tax is just a user fee. Well, in that case, I want a new vendor. What? If T-Mobile raises my rates, I get to switch to Verizon. If I don’t like that the Government’s going to raise my “user fee” then I should be able to switch out there too. Of course it can’t happen because the party of Capitalism and Free Markets is suddenly petrified of privatization.
Not only that, but this argument smacks of Elizabeth Warrant (Good for you clip) and Barack Obama. (You didn’t build that.) I didn’t create this system, I have to work within it. Were we wise enough to set up a system where driving was not a necessity to work, to go to market, and were gas not a necessity to that process, then we could have this discussion. However, discussing the gas tax as a “user fee” treats gasoline, and roads, as though they were luxuries. It is as obnoxious of a comment as the aforementioned quotes by Elizabeth Warren, and Barack Obama, and as unintentionally insensitive to the poor and downtrodden as Mitt Romney’s 47% remarks… except referring to the gas tax as a user fee isn’t a matter of questionable context, where Mitt Romney’s 47% remark is.
There’s a lot to disagree with Bush 43 on. However, his brand of Compassionate Conservatism did, I think accurately identify the need to balance the budget without hurting the poor. And so I implore you. Please don’t hurt me. If you agree with me, help me to spread this message by taking a picture in front of the local gas station holding this sign. (Conjure: sign #pleasedon’thurtme.) It is my sincere hope that if we work together, and fast, we can stop our elected officials from putting the breaks on our personal recoveries, by hastening the return of high gas prices. And if this ends up being just me, well then I can say I gave hashtag activism an honest try.
How has lower gas prices helped you out? And do you wonder if the gas tax hike talk is an effort to undermine Obama’s getting credit for lower prices? Keep it civil, but post your comments below.

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