|Election '08: Looking at the issues|
|Written by Administrator|
|Wednesday, 08 October 2008 18:00|
Movement towards energy independence from our current dependent status on OPEC must be accelerated to a certain degree, but it appears to be outside the range of the federal government's capacity. A solution discussed widely among economists is to let the market go uncontrolled to help produce conservation and the development of domestic energy sources.
Currently there is a 54 cent tariff on ethanol per gallon of gasoline purchased by the domestic consumer. This type of protectionist strategy is designed to give the United States' domestic industry producing and selling ethanol a competitive edge over the foreign nations that sell it at a cheaper base price. Government collects that 54 cents per gallon, and all this does is drive up domestic prices of ethanol, as well as the prices of other goods.
Thus the result is a deadweight loss to society's welfare because the market is not being left alone to work in an efficient manner. McCain votes to suspend the tariff, while Obama votes for higher prices and bigger government.
When the two candidates were asked whether or not they believed we should drill off-shore to lessen our dependence on the Middle East, they offered differing perspectives.
While McCain intends to drill off-shore as soon as possible, Obama has a different type of plan for change. Obama has said to expand minimally, only as part of a "broader agenda" promoting alternative energy and conservation.
One may ask what the specifics are to that broader agenda, but I'm guessing whoever is asking won't get an answer before he potentially takes his seat in the White House.
A common theme in his campaign has been to appeal to the masses by allowing the public to use their imagination with regard to what he really means when so frequently referring to change.
A main issue with not drilling has to do with the quantity of oil in existing reserves. Reserves in existence will only be able to provide Americans approximately four years of consumption, based on current consumption levels.
In order to solidify oil independence from the Middle East, we must exploit resources known to have a large quantity of oil. Obama has said to cut costs by swapping oil imported from the Middle East with oil in the reserves.
However, since there is only enough oil in the reserve system to allow four years of domestic consumption within America, the price cuts will not be significant based on simple supply and demand analysis. We simply need to, as Palin put it, "drill baby, drill."
The energy debate among federal politicians is seemingly on the path to nowhere. Last spring, Dr. Findley of the Illinois State University Economics Department said it best. "If only we had economists running our country!" I could not agree more. At least McCain appears to have economists on his board of policy advisors.