Of Big Oil, Big Government, 8 and 800
Of all things championed and loathed by my friends across the aisle, I find none so fascinating as their pure, raw hatred for capitalism. And this, despite the fact that most of them receive their livelihood from companies engaged in such. In fact, on the entire planet there exist only two options for an individual’s provision. One may sell his knowledge and skills in exchange for food, clothing and shelter (in other words, engage in capitalism) or, he may simply take such provision from society and depend upon someone else to contribute on his behalf.
The reason for the left’s angst against all things capitalistic remains unclear since it boasts no root in reason or logic. Apparently, they see capitalism as the enemy to something they call equality regarding which, if pressed, they cannot even come up with a workable definition. For instance, they want racial equality. Really? Imagine, if you will, T. Lee equal to say, Lebron James. Do they really think Lebron wants to be some pudgy little white guy who can’t dunk? They want men and women to be equal too. Really? I have to say the first time I saw Scorch naked, I was real glad we weren’t equal. And I’m always amused at people who would eliminate hiring discrimination based on sex, but want to legalize prostitution…but I digress.
In general, three elements make up the concept we call capitalism…investment, risk and reward. The term ‘investment’ includes time, energy, training and monetary investment. ‘Risk’ refers to the degree to which the investment may be subject to forfeiture. You might come out ahead or you might lose whatever you invested. ‘Reward’ is the payback one may reasonably expect in return for his investment, factoring in the varying degrees of risk associated with the investment.
One form of investment is savings. Right now putting $25,000 into a certificate of deposit will generally give you a return of just over 1%. The return is very small. In fact, if you factor in inflation you end up with a net loss. However, the risk factor is also very small. When your CD matures, your money together with accrued interest will almost certainly be there. Other savings instruments, like treasuries, mortgage-backed securities, stocks…these all offer varying rates of return…generally from 0-10%…with varying degrees of risk. There’s an apartment building here in Watonga that will return about 20% annually to whoever buys it. Now that’s a great return but the risks are also relatively great.
Oil companies generally operate on about an 8% profit. Though not in a technical sense, profit equates to ‘return’ in that it is the ‘reward’ for one’s risk and investment. This 8% is a low return relative to the egregious amounts of investment capital necessary to operate an oil company. The risk factor is equally formidable. The relatively small return is made up for by the huge volume created by operating in a global market, so the dollar amounts appear huge.
Those on the left cry foul over the “huge, record-breaking profits” being reaped by the big evil oil companies, demanding they be excoriated by confiscatory taxation and punitive regulation…for a paltry 8%. Furthermore, the left insist that the federal government stop subsidizing oil companies to the tune of 4 billion dollars a year. Hmmm…
The US government does indeed invest about 4 billion dollars a year in oil companies…sort of. Much of this “investment” comes in the form of “tax breaks,” which just means the government is NOT confiscating that money from the private sector…but I’ll cede the point and call it a government subsidy even though it really isn’t…again, I digress…
Now, let’s see what the government gets in return for its investment. According to the American Petroleum Institute (API) the oil industry delivers to government coffers about 86 million dollars…per DAY. That comes out to roughly 31.4 BILLION DOLLARS ANNUALLY. Now, lets see here…that comes to…uhhhh…mmm…an annual return of…800%.
So bastardize the oil companies for their paltry 8%, demonize them and punish them for their efforts, and DAMN the government for making a 4 billion dollar investment every year that yields an 800% return, and that further, “supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.” So the liberals think we should increase that 800% return by reducing our investment and expecting the same result….but shame on big oil for their little bitty 8%, let’s go ahead and reduce that. Several words come to mind, but none that I can use here.
Liberals. They hate capitalism for bringing an 8% return to big oil, yet they just aren’t satisfied with a mind-blowing 800% ROI for big government, even with the added benefit of millions of jobs and trillions of dollars invested in energy projects. The truth is, a 4 billion dollar investment that returns 31.4 billion dollars is one that needs to be made year after year after year. It’s the 500 million dollar investments in bankrupt solar panel companies that need to stop.
Never Forget
One
by Cheryl Sawyer
As the soot and dirt and ash rained down,
We became one color.
As we carried each other down the stairs of the burning building
We became one class.
As we lit candles of waiting and hope
We became one generation.
As the firefighters and police officers fought their way into the inferno
We became one gender.
As we fell to our knees in prayer for strength,
We became one faith.
As we whispered or shouted words of encouragement,
We spoke one language.
As we gave our blood in lines a mile long,
We became one body.
As we mourned together the great loss
We became one family.
As we cried tears of grief and loss
We became one soul.
As we retell with pride of the sacrifice of heros
We become one people.
We are
One color
One class
One generation
One gender
One faith
One language
One body
One family
One soul
One people
We are The Power of One.
We are United.
We are America.
———
Cheryl Sawyer is a professor at UH Clear Lake in the counseling department.
Exploring Ground Zero, Ten Years Later
Is it Time for a Balanced Budget Amendment?
One of several provisions of a debt ceiling agreement floated by Republicans is that both houses of Congress pass a Balanced Budget Amendment (BBA) resolution. Not a new idea – all states but Vermont currently have balanced budget requirements. Germany and Switzerland both have balanced budget provisions in their constitutions. In a letter to John Taylor of Caroline on November 26, 1798, Thomas Jefferson wrote:
“I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing. I now deny their power of making paper money or anything else a legal tender. I know that to pay all proper expenses within the year would, in case of war, be hard on us. But not so hard as ten wars instead of one. For wars could be reduced in that proportion; besides that the State governments would be free to lend their credit in borrowing quotas.”
Since 1975, 32 states have petitioned Congress to consider a BBA. Should two additional states issue similar petitions, some contend Congress would then be required to call a Constitutional Convention, in accordance with Article 5 of the US Constitution, to consider the BBA.
There is currently a joint resolution in Congress to pass a BBA.
JOINT RESOLUTION
Proposing an amendment to the Constitution of the United States relative to balancing the budget.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States:
Article
Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.
Section 2. Total outlays for any fiscal year may not exceed 20 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 20 percent by a rollcall vote.
Section 3. Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which total outlays do not exceed total receipts.
Section 4. No bill to increase Federal taxes shall become law unless approved by two-thirds of the duly chosen and sworn Members of each House of Congress by a rollcall vote.
Section 5. The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect. The provisions of this article may be waived for any fiscal year in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the duly chosen and sworn Members of each House of Congress, which becomes law.
Section 6. The Congress shall enforce and implement this article by appropriate legislation, which may rely on estimates of outlays, receipts, and gross domestic product.
Section 7. Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except for those for repayment of debt principal.
Section 8. This article shall take effect beginning with the fourth fiscal year beginning after its ratification.
There have been discussions of changes to the supermajority requirements, from two thirds to three quarters, as well as whether 20% of GDP is the appropriate limit. Amendments have also been proposed requiring state ratification of all increases to the debt ceiling, which would be intended to supplement rather than replace the BBA and would be of little effect if the BBA were properly enforced – a belt and suspenders approach.
Criticism of a BBA largely centers around the Keynesian argument that deficit spending is necessary in times of recession, though this particular argument seems to be dulled if not entirely refuted by recent attempts to dampen the recession with historic annual deficits. Given the clear propensity for members of the Executive and Legislative branches, including many who claim to fly the flag of fiscal conservatism, to consider prior year spending as the budget baseline, expecting a change to that approach absent a Constitutional requirement seems unrealistic at best.
With current debt exceeding $14 trillion, any agreement to allow an increase should come with passage of the joint resolution. The President is right……..enough is enough.
http://en.wikipedia.org/wiki/Balanced_Budget_Amendment
Is It Time For A Balanced Budget Amendment?
One of several provisions of a debt ceiling agreement floated by Republicans is that both houses of Congress pass a Balanced Budget Amendment (BBA) resolution. Not a new idea - all states but Vermont currently have balanced budget requirements. Germany and Switzerland both have balanced budget provisions in their constitutions. In a letter to John Taylor of Caroline on November 26, 1798, Thomas Jefferson wrote:
“I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing. I now deny their power of making paper money or anything else a legal tender. I know that to pay all proper expenses within the year would, in case of war, be hard on us. But not so hard as ten wars instead of one. For wars could be reduced in that proportion; besides that the State governments would be free to lend their credit in borrowing quotas.”
Since 1975, 32 states have petitioned Congress to consider a BBA. Should two additional states issue similar petitions, some contend Congress would then be required to call a Constitutional Convention, in accordance with Article 5 of the US Constitution, to consider the BBA.
There is currently a joint resolution in Congress to pass a BBA.
JOINT RESOLUTION
Proposing an amendment to the Constitution of the United States relative to balancing the budget.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States:
Article
Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.
Section 2. Total outlays for any fiscal year may not exceed 20 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 20 percent by a rollcall vote.
Section 3. Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which total outlays do not exceed total receipts.
Section 4. No bill to increase Federal taxes shall become law unless approved by two-thirds of the duly chosen and sworn Members of each House of Congress by a rollcall vote.
Section 5. The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect. The provisions of this article may be waived for any fiscal year in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the duly chosen and sworn Members of each House of Congress, which becomes law.
Section 6. The Congress shall enforce and implement this article by appropriate legislation, which may rely on estimates of outlays, receipts, and gross domestic product.
Section 7. Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except for those for repayment of debt principal.
Section 8. This article shall take effect beginning with the fourth fiscal year beginning after its ratification.
There have been discussions of changes to the supermajority requirements, from two thirds to three quarters, as well as whether 20% of GDP is the appropriate limit. Amendments have also been proposed requiring state ratification of all increases to the debt ceiling, which would be intended to supplement rather than replace the BBA and would be of little effect if the BBA were properly enforced – a belt and suspenders approach.
Criticism of a BBA largely centers around the Keynesian argument that deficit spending is necessary in times of recession, though this particular argument seems to be dulled if not entirely refuted by recent attempts to dampen the recession with historic annual deficits. Given the clear propensity for members of the Executive and Legislative branches, including many who claim to fly the flag of fiscal conservatism, to consider prior year spending as the budget baseline, expecting a change to that approach absent a Constitutional requirement seems unrealistic at best.
With current debt exceeding $14 trillion, any agreement to allow an increase should come with passage of the joint resolution. The President is right……..enough is enough.
http://en.wikipedia.org/wiki/Balanced_Budget_Amendment
A Memorial Day Tribute
Thank you to Jim Nagle for this wonderful tribute, and thank you to R1 for forwarding it. Nothing more need be said.
Happy Memorial Day
Government Which Governs Least
I’d like to try something a little different. I’ve tried to research material to address different aspects of the political environment that are starting to become factors in the world in which we find ourselves today. I did one article regarding the healthcare issue, where I probably included too much personal information. I wanted to attempt to put together an article that gets us refocused on the purpose of the site, and that is COMMON GROUND!
The one thing that sticks with me the most about the posters on this site is that you are all passionate in your beliefs. Unlike so many sites in this anonymous world called the internet, we have actually been able to forge friendships, however fragile they may be at times. For those of us who have been fortunate enough to meet in person, from what I’ve heard on all accounts each and every one of these meetings has reinforced opinions that folks here are rock solid! This is quite a remarkable feat no matter how you look at it. Sadly, sometimes I think we lose sight of that simple fact in our discussions. So what I’d like to do with this article is to take my personal observations of our discussions and see if we have more in common than we have differences. I know we all realize that there are some major problems that we face together - where the disagreements come is in the solutions. Here are my simple observations.
The first issue that we have is our differences of opinion on the role of government in our lives. Some feel the federal government should be the dominant factor, others believe the states should be. If you look at it strictly in terms of our Constitution, the sederal role is to be limited and the states are to be dominant. I don’t think that anybody can really argue the opposite honestly. Everybody realizes that government is a necessary evil in our lives, simply because without it we would be living in anarchy and nobody wants that (except anarchists). The real question is how do we get back to a proper balance and still benefit the entire country, not just certain segments.
We’ve all heard the phrase “government which governs least governs best”, and there is a reason that rings true. It places the individual in charge of doing the “right thing”, even though there is little oversight. When I go bowling on league nights, I drive on rural roads, with stop signs and stop lights. I come to a complete stop when I get to a stop sign, and I wait for the light to change even if there is no traffic. Why do I do this? Quite simply because it is the law, it’s part of the rules we live by. I don’t think there is anything unique about me in this respect, I think most people are capable and willing to do the same thing for the same reason. There is a trust, a bond if you will between government and the citizenry to obey the law even when nobody is watching. Somewhere along the line, that trust has been lost in both directions of governance. I suggest the following for your consideration.
Due to the nature of our budget difficulties hitting us at the federal, state and local levels, the elimination of all unfunded mandates should be discontinued, for one simple reason. If legislation is so important that it needs to be passed, it should be fully funded by the level of government passing the legislation. It’s easy to spend other people’s money when there are no consequences. Try having something forced on you in your own personal life by any entity and you’ll take issue with it. This simple step could remove a huge burden from every level of government other than local. That’s the way this system of ours was designed to operate.
The second step of this process would be to eliminate duplication in the various federal agencies involved in so many aspects of our everyday activities. We really don’t have to look too far back in history to find an example of how this interferes with a reasonable and timely response to a problem. I give you as an example the Gulf oil spill. There were numerous stories about how the various federal agencies each had their own specific spans of control. Because of all the layers of government involved, steps that could have been implemented quickly to minimize damage were delayed simply due to layers of bureaucracy. It slowed our response considerably. Why have seven different agencies involved in the decision-making process in this emergency? If your house was on fire, would you want to have to get the okay from seven different people before the fire trucks were dispatched? This is the easiest example to use, and it’s rampant in every layer of government.
Once that duplication has been eliminated, we then can focus on what the federal government should be involved with, and this is where it all gets very tricky. There is an argument to be made that some standards need to be applied across the entire country, and in some instances I agree that it is necessary. For this example I will use the Department of Education. I firmly agree there should be a basic set of educational standards, but none of them should involve diversity training, sex education or self-esteem classes. Those are not issues that should fall into the realm of government at any level, in my not so humble opinion, but rather to the parents. What purpose does it serve the citizenry for a child to feel good about herself when she can’t even read the diploma she is handed? At some point we have to get back to parental responsibility. Many of us were born and raised before the Department of Education was created in 1977. Think of how much has changed in the US during the subsequent three decades. It’s mind-boggling when you take the time to contemplate that. As a small aside, the Energy Department was created at the time to make us energy independent. Anybody honestly think it’s even gotten close to that goal?
These are all things we have discussed here, time and again. When you take the time to stop and ponder just these simple steps, do you understand the amount of money these simple steps would save? State and local governments could implement the same principles, and the savings would be compounded further. A profound attitude change would occur from both the perspective of the taxpayer toward the government, and vice versa. It’s all quite simple when you think about it. Most taxpayers don’t mind paying taxes, and they really don’t mind government. Where the real conflict arises is when the taxpayers don’t think they are getting their money’s worth out of THEIR investment. Government doesn’t invest in infrastructure and schools, taxpayers do.
Open Letter to House Republicans
Congressmen,
It is more than a bit distressing that I feel the need to communicate on this topic barely two months into the 112th Congress, but it would seem that Congress is not yet terribly serious about deficit reduction. One would think the message sent in November couldn’t have been more clear, but it would appear it has either already been forgotten, or has somehow become garbled since the election.
I fully understand that the Republicans only hold a majority in the House and as such getting budget cuts through the Senate and the Oval Office represent a significant challenge. In my opinion, President Obama has shown zero leadership in this regard, with his proposed $6.5 billion in cuts against a seriously inflated baseline. It would appear that once again he has abdicated his leadership role to the House.
However, now that the Republican party is in control of the House there is an opportunity to demonstrate that you are serious about reducing spending and the deficit, about reducing the size and intrusiveness of the Federal government. This was a major part of the Republican platform in 2010 and was a major reason for the historic turnover in the House of Representatives, in many cases with freshman members intent on executing on that platform. Yet now I find that execution to be sorely lacking, not because those freshmen have lost interest or become less vocal, but because House leadership apparently doesn’t have a willingness to make the more difficult political decisions. $61 billion is barely a down payment on the level of spending reductions we need to see at the Federal level and doesn’t even touch the entitlements that nearly everyone acknowledges are the biggest fiscal challenge we face as a country. The GAO report issued last week provided a map to $100-200 billion of low hanging fruit. The Deficit Recution Commission report was barely acknowledged by the President and both houses of Congress, despite bipartisan support but with a pathetic shortage of votes. Our federal deficit in the month of February alone was more than four times the House proposal. I expect a stronger commitment from the party that wants to lay claim to fiscal responsibility.
There is little doubt that neither the House proposal nor that of the President will get through the Senate, and I do understand that ultimately a resolution or bill needs to be negotiated that will receive more than lip service from President Obama. But in my view, if the President and the Democrats in Congress aren’t serious about getting our fiscal house in order, the Republicans need to at least demonstrate that they are. If that message continues to be sent, it will be up to the Democrats to join you in the effort or shut down Washington. I urge you to support stronger budget proposals for both the balance of this fiscal year and the 2012 year, as well as bills that will deal, once and for all, with the mess that is Social Security, Medicare, Medicaid and, now, Obamacare. I would hope the fiscal future of our country is worth the potential cost in political capital.
