A Policy That Is Working

It is not really in the interest of anyone (other than Iran) for Iran to successfully build an atomic bomb. Iran is a major supporter of terrorism around the world, and no person on earth will be safe if Iran successfully builds a nuclear weapon capable of reaching Europe or North America. The Iran nuclear deal did not stop Iran’s nuclear program–it simply postponed it until President Obama was out of office.

John Hinderaker at Power Line Blog posted an article today about the impact of President Trump’s Iran policy on the economy of Iran.

The article reports:

Iran has been roiled by demonstrations against the dramatic increase in the price of gasoline that was dictated by the government earlier this month. The demonstrations have been brutally suppressed, with somewhere between 100 and several hundred protesters killed by police. For several days, the mullahs pulled the plug on internet service to prevent videos of the protests and police brutality to be seen by the outside world.

So why is Iran in turmoil?

The article explains:

In other words, the Trump administration’s sanctions are working. Iran’s government, short of cash, was forced to dramatically raise the price of fuel, even though it knew what the reaction would be. And the resulting explosion–the analogy to the Yellow Vest protests in France is obvious–has shaken the regime.

Trump’s policy of using sanctions to starve the mullahs of cash contrasts favorably with Barack Obama’s inexplicable policy of sending $100 billion dollars to the regime in exchange for empty promises.

President Trump’s policy toward Iran is working.

Another Reason To Oppose An Increase In The Gasoline Tax

I have previously stated my objection to raising the tax on gasoline now that the price per gallon has dropped–the gas tax is much more of a burden on lower income people than on the upper middle class. As much as I do think tax burdens should be somewhat equal, I don’t like to see people spend a major portion of their income just getting to work. When the price of gasoline dropped, I think everyone breathed a sigh of relief–it was like getting a tax rebate. Now Congress is ready to mess that up.

The Wall Street Journal posted an article today explaining where the money paid in gasoline taxes has been spent. Because we are hearing cries about our crumbling infrastructure, you would think that the gasoline tax money would be spent on roads. Think again.

The article reports:

But before considering any policy that would raise additional revenue, Congress should first reform where the fund’s money goes. The Highway Trust Fund now pays for a plethora of projects that have little to do with highways. According to a 2013 analysis by the Heritage Foundation, at least 20% of gas-tax revenues in recent years went toward other programs, from light rail to bike lanes to landscaping projects. Some funds even went toward establishing transportation museums.

Hence the financial problems. According to an editorial in this newspaper, spending on non-highway projects has increased by nearly 40% since 2008, while highway-related spending has remained flat. If Congress directed the fund to spend its money only on highways and other road-related infrastructure—what it was initially created to do—it would be 98% solvent for the next decade.

This is the perfect picture of the problem with government spending–the problem is not lack of money–the problem is how the money they have is being spent.

The article concludes:

Higher gas prices, tax-induced or otherwise, also correspond with diminished economic growth. When you and I have more money to spend, we usually do so, benefiting the economy in the process. Financial analysts at Goldman Sachs predict that lower gas prices could add as much as half a percentage point to GDP growth this year. Some of this will be offset by corresponding declines in the oil and gas industry, but the overall effect on America’s economy is still expected to be positive in 2015.

This puts in perspective the first quarter’s lackluster 0.2% economic growth. Without the benefits of lower gas prices, growth could have been even slower, which is the last thing Americans need. When the Highway Trust Fund’s future comes up for congressional debate in the coming weeks, legislators should consider reforming it rather than simply demanding that you and I pay more at the pump.

There are Republicans and Democrats who have authored this bill. Every one of them should be voted out of office at the next opportunity. This is not the time to raise taxes–this is the time to begin to spend responsibly.

Sometimes You Just Wonder What Reality Some People Live In

Gas Pump 3 - Charles River Museum of Industry,...

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How do you feel about what you are paying these days to fill up your gas tank? Do you think anyone in Washington cares about how much you are spending? Well, there has been some interesting testimony in Congress recently.

Ed Morrissey at Hot Air posted an interesting article on recent testimony by Energy Secretary Stephen Chu.

The article reports:

When asked by Rep. Alan Nunnelee whether the Obama administration wants to work to get gas prices to come back down, Chu replied that they’re not focusing on that — and that higher gas prices mean more of a push for the alternative energy sources the administration wants to push. 

As I have stated before–I don’t have a problem with alternative energy sources–however, those sources will develop naturally as they become cost-effective. The market needs to left alone so that the most efficient sources are developed. Government subsidies and interference simply muddy the waters and prolong the process.

The Heritage Foundation stated:

As shocking as his remarks are, they shouldn’t come as a surprise. Chu has a long record of advocating for higher gas prices. In 2008, he stated, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Last March, he reiterated his point in an interview with Fox News’ Chris Wallace, noting that his focus is to ease the pain felt by his energy policies by forcing automakers to make more fuel-efficient automobiles. “What I’m doing since I became Secretary of Energy has been quite clear. What I have been doing is developing methods to take the pain out of high gas prices.”

One of those methods is dumping taxpayer dollars into alternative energy projects like the Solyndra solar plant. Another is subsidizing the purchase of high-cost electric cars like the Chevy Volt to the tune of $7,500 per car (which the White House wants to increase to $10,000). In both cases, those methods aren’t working. Solyndra went bankrupt because its product couldn’t bear the weight of market pressures, and Chevy Volts aren’t selling, even with taxpayer-funded rebates. What’s the president’s next plan? Harvesting “a bunch of algae” as a replacement for oil.

Meanwhile, the Obama Administration is seemingly doing everything it can to make paying for energy even more painful by refusing to open access to the country’s oil and gas reserves and blocking new projects that would lead to the development of more energy in America. Case in point: the president’s decision to say “no” to the Keystone XL pipeline, a project that would have delivered hundreds of thousands of barrels of oil from Canada to Texas refineries, while bringing thousands of jobs along with it.

High gasoline prices take a toll on all areas of the economy. They cause inflation in food prices and all other goods.

The article at Hot Air points out:

Congressional Democrats are ramping up pressure on President Obama to tap the Strategic Petroleum Reserve (SPR) to prevent rising gas prices from threatening the economy and their election-year prospects.

They are growing anxious that the price of fuel could reverse their political fortunes, which had been improving due to signs of growth in the economy.

Republicans have hammered Democrats on the price spike, repeatedly noting that gas prices — now at $3.72 per gallon for regular — have doubled since Obama won the White House.

Even if their motives are less than pure, it is nice to know that Democrats are at least aware that high gasoline prices are a problem for most Americans.

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What The Republican Debates Should Really Be About

This chart is from the website of the House Ways and Means Committee

America Before President Obama Took Office and Now

  Before Now Change
Number of Unemployed1 12.0 Million 13.1 Million +9%
Long-Term Unemployed2 2.7 Million 5.6 Million +107%
Unemployment Rate3 7.8% 8.5% +9%
“High Unemployment” States4 22 43 +95%
Misery Index5 7.83 11.46 +46%
Price of Gas6 $1.85 $3.39 +83%
“Typical” Monthly Family Food Cost7 $974 $1,013 +4%
Median Value of Single-Family Home8 $196,600 $169,100 -14%
Rate of Mortgage Delinquencies9 6.62% 10.23% +55%
U.S. National Debt10 $10.6 Trillion $15.2 Trillion +43%

1 Number of unemployed in January 2009 and December 2011. http://www.bls.gov/data/#unemployment.
2 “Long-term unemployed” means for over 26 weeks; data for January 2009 and December 2011. http://www.bls.gov/data/#unemployment.
3 Unemployment rates in January 2009 and December 2011. http://www.bls.gov/data/#unemployment.
4 “High unemployment” means having a 3-month average unemployment rate of 6% or higher.  From the Bureau of Labor Statistics’ “Extended Benefits Trigger Notice” for January 18, 2009 and January 22, 2012. http://www.ows.doleta.gov/unemploy/trigger/2009/trig_011809.html and http://ows.doleta.gov/unemploy/euc_trigger/2012/euc_012212.html.
5 The “Misery Index” equals unemployment plus inflation.  For January 2009 and December 2012.  http://www.miseryindex.us/indexbymonth.asp.
6 Average retail price per gallon, January 2009 week 3 and January 2012 week 4. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_NUS_DPG&f=W.
7 U.S. Department of Agriculture, values represent monthly “moderate” cost per family of four for January 2009 and November 2011. http://www.cnpp.usda.gov/USDAFoodCost-Home.htm.
8 U.S. median sales price of existing single-family homes for metropolitan areas for 2008 and 2011 Q3. http://www.realtor.org/research/research/metroprice.
9 Residential mortgage delinquencies (real estate loans) for 2008 Q4 and 2011 Q3. http://www.federalreserve.gov/releases/chargeoff/default.htm.
10 Values for January 21, 2009 and January 23, 2012.  http://www.treasurydirect.gov/NP/BPDLogin?application=np

This is where the focus of the debates should be.

 

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One Explanation For The High Unemployment Numbers

States that border the Gulf of Mexico are show...

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The Offshore Marine Service Association (OSMA) has posted a video at YouTube explaining the impact of the ‘permatorium’ the Obama administration has on American drilling in the Gulf of Mexico.

The Washington Examiner posted a short story on the impact of the ‘permatorium’ which included this statement:

But other than pointing to staggering unemployment figures and gas prices that remain nearly double what they were when the president took office in 2009, it’s difficult to convey the magnitude of the Obama energy crisis in the Gulf of Mexico. The consequences of this crisis far exceed in terms of human and economic losses those occasioned by the Deepwater Horizon disaster that was used to justify the Permatorium in the first place.

Lifting this ‘permatorium’ would help unemployment and also bring down the cost of gasoline which would help all Americans.

 

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