mini

Oh, I am in favor of MUCH higher taxes to repair the nation's infrastructure. A progressive asset tax. An end to the mortgage interest deduction. An end to the Bush tax giveaway to the rich. A targeted windfall profits tax. Trickle down is a clear failure. If we as a nation are going to invest in a sane energy future, let's try some trickle up for a change.

razorsharp

Corn based ethanol has clearly raised the price of food in America. But there is good news on the horizon. Several companies are investing and testing ethanol produced from Jatropha and from algae. There is enough algae to create ethanol without creating any other harmful consequences (at least none that we know of now). Jatropha uses less water, fertalizer and can be grown on fewer acreas of land when compared to corn based ethanol. I see the silver lining. I hope it is true.

mini

Consider the amount of oil and gas products used by the U.S. military over the past 8 years, and its impact on prices. All subsidized by us, in taxes, long-term debt, and higher oil prices.

Higher gas prices are simply part of the war tax, a war fought to produce oil profits for the oil and gas refiners. Worked too, at least for one Dubai-based company:

HAL: Summary for HALLIBURTON CO - Yahoo! Finance

RatedPG

"Oh, I am in favor of MUCH higher taxes to repair the nation's infrastructure. A progressive asset tax. An end to the mortgage interest deduction."

Mini, can you cite sound economic principle that would back up these statements. (forgive me if these comments are sarcastic and I missed that) :-) Thanks.

mini

Why, sure. The Bush tax cuts, coupled with the cost of the war and continuing aggressive, hostile occupation, devalued the dollar by 40%, drove up the price of oil in tandem (much of the oil being used for military purposes), and saddled the nation with the largest national debt in its history, and, over the next 25 years, three trillion dollars in costs. Want to reverse it? End the aggressive, hostile occupation, tax to pay down the deficit, and uses tax revenues to support employment for things people consume, starting with health care and public transportation.

I've got a Nobel-Prize-winning economist on my side:

Amazon.com: The Three Trillion Dollar War: The True Cost of the Iraq Conflict: Joseph E. Stiglitz, Linda J. Bilmes: Books

Read his book and then get back to me.

WashDad

No need to make it complicated. According to the Center for Strategic and International Studies in Washington, the US military (not just in Iraq) uses 1.2 million barrels a month — or roughly 40,000 barrels a day -- out of global demand of 86 million barrels per day. That's .047%. Hardly enough to have a big impact on world prices.

It's far more likely that the increase in demand over the last ten years from China (almost 8% per year average increase over a 10-year span) and India (not sure what the % is) has a lot more to do with price increases than US military usage. US increases in energy consumption ran about 1.5% annually over the same period -- at a time when the population went up about 8% or so over the 10 years.

mini

That's about what production in Anwar would be. Couple that with the destruction of Iraq's oil infrastructure for five years, and we are talking BIG amounts.

Prices (as we all know) are set at the margins.

LongPrime

If you, please; Idiot, is a reserved name. We are merely, Stupids.

mini

Think Progress FLASHBACK: Ten Years Ago, Bin Laden Demanded Barrel Of Oil Should Cost $144

Fears, Again, of Oil Supplies at Risk - New York Times

RatedPG

Mini,

I thought that Fed interest rate cuts had much more to do with devaluing the dollar than Bush has been able to directly influence. You seem to give Bush way to much "credit" for all of this mess, including the rising prices of oil as WashDad points out.

Tax increases in the magnitude of what you have described would be a disaster for our economy. Just doing the "opposite" of what Bush has done is not the answer.

mini

"I thought that Fed interest rate cuts had much more to do with devaluing the dollar than Bush has been able to directly influence."

You thought wrongly. Take out one of the largest oil producers in the world, add consumption on the margin, and run up the largest deficit in world history and you've got the recipe.

We will pay for the deficit either in inflation, long-term recession, and higher oil prices, or in taxes that can actually produce what people need, and allow it to trickle up. We've tried one approach. We will pay in either case - one ends us up without energy alternatives, without mass transit, without repaired infrastructure, and without health care, the other with all of the above.

mapesy

There's more to it than that. As mini said, the budget deficit plays a role, as does our weak economy and the recent mortgage crisis. It's rumored that at least one major US bank is facing serious financial difficulties (Citi?). Some economists believe at least part of the dollar's decline is due to the negative psychological impact the Iraq war has had on foreign investors, as well.

And we might ask ourselves why the Fed has had to cut interest rates to such low levels in the first place?

RatedPG

"You thought wrongly".

Sorry, but I am not wrong about the cut in US interest rates being a MAJOR contributor to the devaluation of the dollar. I can site numerous articles stating this fact, but I won't bother because I'm sure you will dismiss all my sources as being biased.

mapesy

RatedPG, Interest rates were at historically low levels in 2002-2004:

http://www.federalreserve.gov/releas...y/H15_FF_O.txt

Although interest rates have only recently fallen below the 2% level again, the dollar is much weaker today than it was in 2002-2004:

FXHistory - Historical Currency Exchange Rates

This tells me that something other than interest rates is contributing to the recent weakness in the dollar.

RatedPG

mapesy, yes definitely there are several factors at work here. As far as interest rates, they have to be viewed in relation to euro and other foreign currency ratesInvestment in US is decreasing as a result of more attractive rates abroad.