The Government and Alternative Fuels

In these trying times, I hear my neighbors talk about government regulation of fuel prices and subsidies. Subsidies are, in my opinion, not the answer. Take farm subsidies for example. We pay farmers subsidies to keep prices low for consumers, then we pay farmers not to plant all their fields to keep prices higher so the grain they do sell fetches a higher price, then we pay subsidies to support an ethanol industry that drives demand for grain and forces prices even higher. So, by logical reasoning we (because the government is funded by us) pay three times so that we can have higher prices at the supermarket. The system is broken. I believe we should subsidize the alternative fuel industry even more to drive the demand up for the ingredients for ethanol. This increased demand would then be the farm subsidy because farmers would be paid more for the product they produce and not paid not to produce. When ethanol or some other non-fossil-based energy system is a fully established business and we have an oversupply of grain and we need to cut back production, there is nothing that says the government cannot go back to paying the farmers not to plant. This is obviously oversimplified but I think the premise is sound.

Farm Subsidies

We pay farmers subsidies to keep prices low for consumers, then we pay farmers not to plant all their fields to keep prices higher so the grain they do sell fetches a higher price, then we pay subsidies to support an ethanol industry that drives demand for grain and forces prices even higher. So by logical reasoning we (because the government is funded by us) pay three times so that we can have higher prices at the supermarket. The system is broken. I believe we should subsidize the alternative fuel industry even more to drive the demand up for the ingredients for ethanol. This increased demand would then be the farm subsidy because farmers would be paid more for the product they produce and not paid not to produce. When Ethanol or some other non fossil based energy system is a fully established business if we have an oversupply of grain and we need to cut back production there is nothing that says the government cannot go back to paying the farmers not to plant. This is obviously over simplified but the premise is sound.

Gas Prices

The oil companies say it is all about supply and demand. That would be true, if all the suppliers were also capitalism based economies. Instead the world oil markets are dominated by OPEC, Russia and other countries that have government controlled constraints to free markets. In other words, in the commodity markets demand outstrips supply because foreign governments are withholding oil to create a higher market price for crude oil. This is not capitalism its highway robbery that diverts additional capital to tyrants and despot (not all oil exporting countries are like this take Canada that is benign), but enough of them are to effect the supply and create a demand. In addition these tyrannical governments are unstable which adds fear to the markets and further stimulates higher pricing. In stocks fear means selling in oil it means buying. And for all of us in America wondering how oil affects us outside of our cars think of all the home products produces using crude oil, from roofing shingles to plastic to the trucks delivering food and homes heated with oil.

Solving the Social Security Crisis

Why do we have to increase taxes?
There is absolutely no reason. There is a much simpler solution and it is based on the original set up of the social security system. When social security was conceived and how it basically works today is today's payers are paying for today's receivers. This works great as long as you have more contributors than recievers. So in the future we need more payers than receiversas well.
Our government thought there would always be a surplus because we have an ever increasing population. since population growth has slowed and people live longer the reciever end is ballooning while the payer end is shrinking.
here are two ways to increase the population to increase the number of payees so that the system remains solvent. One is to encourage legal immigration so that the young immigrants pay social security tax into the system. second is to encourage business through tax incentives and other programs to encourage working families to have more children. For instance increasing maternity leave to a year as the are doing in Western Europe as well as having more kid friendly workplaces, such as on site child care. Having flexible work schedules so that two working parents can manage child care and having a family.

The bottom line is simple if we keep going down the path we are on we will end up with an inverted pyramid. the few payers paying for the massive number of recievers. And the payers will have to give more of their pay because they are supporting more retirees per worker.
The simplest solotion is to have more payers to share the load. think of it this way its alot easier to have 20 grandchildren supporting grandpa than one.

So go out and tell your congressman you want to have more kids to solve the social security crisis. When he looks at you funny show him this blog. when he looks at you even funnier tell him it takes how many taxpayers to pay your salary. What if there were fewer taxpayers. Which in just a few years there will be if we keep going down this population path.