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Jack Sarratt
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Post by Jack Sarratt »

Well, I'm surprised that people are actually discussing Bush, instead of just knocking him. Way to show everyone y'all aren't just complaining, but are trying to offer solutions to the problems.
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Post by Qray »

Merle wrote:Social Security is not going to be fixed until it collapses. Those of us who are paying in now will never get our money out. If Social Security were a private venture, those responsible would be indicted. But trying to "fix" Social Security leaves the one who proposes the fix open to the most oppressive of demagoguery as W found to his chagrine. His own party will not support him in this for fear of recriminations from seniors at the polls. No demagoguery seems more potent than scaring the old folks that someone is going to cut off their social security checks.

Did you know that there is no legal guarantee that Social Security will pay a benefit? True! To illustrate the politics of Social Security, back in 2001, the House passed a Bill guaranteeing Social Security benefits. Killed in the Senate. Who controlled the Senate in 2001? Of course, the house majority did it only for politics, knowing the majority in the Senate would kill the bill. But the American electorate, being largely ignorant, never heard anything about this.
I agree that a major restructuring needs to take place. Especially with the impending retirement of the baby boomer generation. However, I think a big step in the right direction is keeping the government's hands out of the Social Security till. They routinely take BILLIONS out of Social Security to pay for other things. Hölle, that's like saying you put $20.00 in an account every week to retire on, then the government takes half of that out to pay for a road in front of your house. Of course they're would never be enough money for you to retire on.
Merle wrote:As for gas prices, shouldn't we be rejoicing at high gas prices? Won't high gas prices force people to drive less, use more fuel efficient vehicles, and create an economic climate in which alternative fuel sources can be explored? [Q could re-educate us here on E85, among other things.] After all, the prior administration proposed the BTU tax for the express purpose of driving up gasoline prices, for all the reasons I've mentioned above.
IMO, yes and no. High gas prices will encourage people to drive less, use more fuel efficient vehicles, and create an economic climate in which alternative fuel sources can be explored. At the same time, I have large work trucks. I myself drive a full sized pick-up for side work. I've tried getting a 4 x 8 sheet in the back of a hatchback...it just doesn't work. So regardless, the economy will still need large trucks, airplanes, and trains. All of which can't drive less. Though the engines in these vehicles could be more economical, you can only make them so efficient before you start losing the horsepower that they need. So the bottom line for these types of vehicles is...your going to need fuel for them. So less driving and more efficient vehicles are great for so-and-so, but it's not going to help me and mine much.

I think at this point and time, alternative fuels offer our greatest chance at change. In particular ethanol, biodiesel, and the like.

Electric cars...on the surface they sound like a good idea, but think about it. The U.S. already is experiencing a serious problem in generating enough electricity. Now imagine all the cars on the road also needing electricity. There efficiency, though getting better, still isn't all the greatest. Not to mention what to do with all those batteries.

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Jack Sarratt
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Post by Jack Sarratt »

Solar power and wind power...These also seem like good ideas, and in truth they are. But the problem is once again: quantity. Solar power can be converted into electricity and stored in batteries, but solar panels can't generate enought energy to begin with. Wind power is only feasible in areas with consistently high winds.

I believe the key issue here is a severe lack of ways to produce and use energy efficiently, not just a lack of energy itself.
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Post by Merle »

Qray wrote:IMO, yes and no. High gas prices will encourage people to drive less, use more fuel efficient vehicles, and create an economic climate in which alternative fuel sources can be explored. At the same time, I have large work trucks. I myself drive a full sized pick-up for side work. I've tried getting a 4 x 8 sheet in the back of a hatchback...it just doesn't work. So regardless, the economy will still need large trucks, airplanes, and trains. All of which can't drive less. Though the engines in these vehicles could be more economical, you can only make them so efficient before you start losing the horsepower that they need. So the bottom line for these types of vehicles is...your going to need fuel for them. So less driving and more efficient vehicles are great for so-and-so, but it's not going to help me and mine much.

I think at this point and time, alternative fuels offer our greatest chance at change. In particular ethanol, biodiesel, and the like.

Electric cars...on the surface they sound like a good idea, but think about it. The U.S. already is experiencing a serious problem in generating enough electricity. Now imagine all the cars on the road also needing electricity. There efficiency, though getting better, still isn't all the greatest. Not to mention what to do with all those batteries.
Which leads me to question your earlier statement regarding W and drilling for oil in currently protected areas. The most well know is ANWR, of course. There are other areas, as well, such as the coast of Florida, where large reserves of oil are expected to be. If you want to keep the big truck rolling, isn't it a good idea to find as much domestic supply as possible?

And increasing supply, while not weaning us from dependence on mideast oil, at least has the economic benefit of lowering prices. Any increase in supply will have the effect of lowering price.
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Post by Qray »

Merle wrote:Which leads me to question your earlier statement regarding W and drilling for oil in currently protected areas. The most well know is ANWR, of course. There are other areas, as well, such as the coast of Florida, where large reserves of oil are expected to be. If you want to keep the big truck rolling, isn't it a good idea to find as much domestic supply as possible?

And increasing supply, while not weaning us from dependence on mideast oil, at least has the economic benefit of lowering prices. Any increase in supply will have the effect of lowering price.
As a hunter and a conservationist, my reason for thinking that drilling in National Wildlife Refuges is short sighted may surprise you. That reason not being the effect on wildlife in the area, but little benefit in lower gasoline prices.

I don’t think you can put a blanket statement on all Refuges as whether or to drill there or not. I think each case needs to be examined individually. That being said, lets look at ANWR first.

Ok, so what is ANWR?

Map One showing the size of ANWR (roughly equal to the size of the state of Georgia) in relation to the lower 48.
Image

ANWR (Arctic National Wildlife Refuge) is a 19 million acre area in the northeast corner of Alaska. Map One shows the size of ANWR in relation to the rest of the U.S. Map Two shows a more detailed map of the area. Map Three shows another detailed view of the area. (Map Three is a pdf file and requires Adobe. It’s also not on my Web Site.)

So why is ANWR a Wildlife Refuge? What are we refuging? According to the FWS (U.S. Fish and Wildlife Service) the Refuge was established to preserve unique wildlife, wilderness and recreational values; to conserve caribou herds, polar bears, grizzly bears, muskox, dall sheep, wolves, wolverines, snow geese, peregrine, falcons, other migratory birds, dolly varden, and grayling; to fulfill international treaty obligations (though I’m not sure what they are); to provide opportunities for continued substance uses; and to ensure necessary water quality and quantity.

The funny thing (more funny ironic than funny ha-ha) is that ANWR had it’s origins as an oil reserve of 23 million acres that were originally set aside in 1923. You can check out a more detailed history of ANWR here.

Ok, now we know what, where, and why ANWR is.

So what’s the problem?

Well, some people want to drill for oil in ANWR and some people don’t want them to.

So what’s the upside and the downside of drilling for oil in ANWR?

The downside is the potential disruption and destruction of the ecosystem in the area, and the effect this would also have on the other areas that ANWR’s animals migrate to.

The upside would be more domestic oil production.

Only 8% of ANWR would be considered for exploration. 1.5 million acres on the northern coast of ANWR would be considered for development. The remaining 17.5 million acres or 92% would remain permanently closed to any kind of development. If oil is discovered, less than 2000 acres of the over 1.5 million acres of the Coastal Plain considered for development would be affected. That¹s less than half of one percent of ANWR that would be affected by production activity. However, this area is one of the most populous by ANWR’s wildlife.

Now how would drilling in ANWR really effect the wildlife? If we go by the nearby oil fields of Prudhoe Bay, the wildlife hasn’t really been effected. The CACH (Central Arctic Caribou Herd) which migrates through Prudhoe Bay has grown from 3000 animals to its current level of 32,000 animals. Other wildlife species in the arctic oil fields also have comparable populations to non-oil field areas. So if we use nearby Prudhoe Bay as an example, there shouldn’t be an overly negative effect on the wildlife on a day to day instance. The other possible danger is an accident which could effect a lot.

Information garnered from the U.S. Fish and Wildlife Service, UNC, and Arctic Power.

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Post by Qray »

Ok, so now that we all know what, why, and where ANWR is, why do I think drilling there is short-sighted? Well, short-sighted might be the wrong word for what I mean. Not so much short-sighted as ineffectual to gasoline prices.

Using 2004 oil import numbers (sorry, but they’re the newest I have) an average of 58% of the U.S.’s oil is from imports. Using the comparable North Slope oil fields, we can expect to get two million barrels a day from ANWR, which would translate into 16% of our domestic oil production. Estimating 12 billion barrels of potential oil in ANWR (numbers vary from 9 billion barrels up to 16 billion barrels of recoverable oil) your looking at just over 16 years of oil production from ANWR. It's estimated that it'll take 6 years to get ANWR fully developed to the point where we'll see significant crude oil production.

So in 6 years, we’d get a 16% domestic oil production increase for 16 years if we drill in ANWR. Is this good? Bad? I honestly don’t know. I don’t know enough about consumption and production rates to say one way or the other.

What I can say with certainty is I’ve been told by the oil companies (not personally, but in the news) that the U.S. has a serious refinery problem. That being, not enough refineries. THAT is the reason that gasoline is so expensive. So will increasing the supply of crude oil lower the cost of gasoline if we don’t increase the number of refineries?

Ok, now what I DO know with certainty is this...gas stations get their gas from tanker trucks. Tanker trucks get their gas from depots. During hurricane Katrina, the local depot refused to sell gas to the tanker trucks. Why? Not because they were concerned about supply. They did it to increase prices. They wouldn’t allow tanker trucks to fill up until after the hurricane hit the refineries in the gulf because they knew the prices would go up afterwards. The result was not only shortages because the depots wouldn’t let the tankers fill up, but much higher prices much sooner once the tanker trucks did fill up.

Something else that comes to mind is this...”well, we had to raise prices because demand went up, You know supply stays the same, demand goes up, prices go up. Supply and demand.”

Ok, so why did prices go up last spring Mr Oil Monkey, when demand was down?...”well, we had anticipated a higher demand than we actually had. So even though we had a larger supply, we didn’t sell as much and therefore didn’t make as much money so we’re raising prices to make up for it. We made a lot of money, just not as much a lot of money as we wanted to.”

Sounds kind of contradictory, doesn't it?

At the moment demand is high, supply isn’t. So by the basis of Supply and Demand, the gas companies should be making more profit. I have no problem with that, but the gas companies are making RECORD profits.

THAT I have a problem with.

So you see, IMO the oceans could turn into crude oil and I still don’t think we’d see a decrease in gasoline prices. The gas companies will charge as much as they can for as long as they can. Coming up with any kind of made up excuse for the reason why prices are high.

And since this post is starting to take on the feel of a rant (Q talking about gas companies...a rant...go fig.) When you see high gas prices, you must remember, gas stations get their gas from tanker trucks. Tanker trucks get their gas from the depots. The depots set the price. The gas stations and the tanker truck drivers really have nothing to do with the price of gas. They essentially charge enough to pay for the next shipment of gas. So next time you see high prices, don't get angry at the gas station. It's not their fault.

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Post by lastone »

On social security!

There are two conflicting issue that effect all democratic governments.

1. People want to pay less tax
2. People want the government to provide bigger and better services.


The simple math’s is that if you a want a government to provide a service, you have to pay for it. I am assuming that the fundamental issue facing the U.S. Social security system is unfunded liability due to the fact that the baby boomers are all about to head off to happy acres village and the Government has stuck its hand into the cookie jar to fund other projects rather than raise taxes.

Leaving the unfunded retirement benefits to be dealt with by future generations. Well folks the noise you here in the attic isn’t your parents coming to stay with you. Its chickens coming home to roost. They say that Clinton managed to balance the Budget. The deficit under the current administrations is last I heard 3 trillion dollars and rising.

The solution to me looks obvious. If you cannot reduce spending you have to raise taxes.
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Post by Merle »

Lastone, you are more right than you even realize. Our imperial federal government has been raiding social security since day one. The social security "trust fund" [which really doesn't exist] is filled with IOUs from the Federal government. This cuts across administrations from both parties, who haven't been able to wean themselves from pork. Only during the Clinton administration, blessed by the tech boom and resultant higher than expected tax revenues, coupled with an iron fisted Speaker, has the US government actually balanced a budget - since the Coolidge administration.

The current administration and Speaker demonstrate absolutely no commitment to reigning in spending. I would very much like to see Hastert go.

Higher taxes may be the answer. However, you have to consider the impact of higher taxes on the economy. Right now, we have low unemployment and rapid growth, both of which mean higher tax revenues. Take money away from producers in the form of higher taxes, and you will slow the economy, and increase unemployment. That leads to the paradoxical result of lower tax revenues. A case in point is my home state of Ohio, which has, I believe, the third highest tax burden in the country. So our economy is still lousy compared to the rest of the nation. [But still better than most of socialis Europe.]

But as LO points out, no one wants their pet spending program cut. No one is willing to take a hit for the common good.

Personally, I've given up. I don't think the Republicans know how to govern, and I know what the Democrats will do to me if they gain the White House and/or Congress. I'm moving to the Bahamas. No income taxes there.
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Post by Merle »

Q, oil companies are making record profits, yes. But has the profit margin changed? That is the real question.

In your line of work, if the cost of your materials go up, do you increase your prices to maintain your profit, or your profit margin? If you are not increasing to maintain your profit margin, then you are making a far lower return on your investment.

For instance, and I don't think I need to educate Q in profit margins, but here goes anyway. Say you are a house builder. Say it costs you $100,000.00 to build a house. You sell the house for $120,000.00. Your profit is $20,000.00. Your profit margin is 20%. Now say your costs increase, and it costs you $150,000.00 to build the same house. Will you sell the house for a $20,000.00 profit? If so, your profit margin will have decreased to 13.3%. What most businesses do is maintain the profit margin. So in this example, the selling price of the house would be $180,000.00, a profit of $30,000.00, and a 20% profit margin. If you don't maintain your profit margin, then you are investing more and more with a declining return. You should stop building houses and look for some other business where you can make a greater profit margin.

Hence if Oil companies are making record profits, that is most likely because their costs have increased so much as well. Maintaining their profit margins will lead logically to record profits. Even if the profit margin declines slightly, at the increases in oil price, you are still going to see record profits.
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Post by lastone »

Merle wrote:
Higher taxes may be the answer. However, you have to consider the impact of higher taxes on the economy. Right now, we have low unemployment and rapid growth, both of which mean higher tax revenues. Take money away from producers in the form of higher taxes, and you will slow the economy, and increase unemployment. That leads to the paradoxical result of lower tax revenues. A case in point is my home state of Ohio, which has, I believe, the third highest tax burden in the country. So our economy is still lousy compared to the rest of the nation. [But still better than most of socialist Europe.]

Europe’s economic woes may have more to do with common market issues and issues related to globalization, than socialism, but that is by the by.

It would seem that the trick in this situation would be to find a way to increase revenue without dampening economic activity. I realize that with a growing economy revenues are up but obviously just in dollar terms. Most likely the percentage of tax as a ratio of GDP is down. At this point I think we can agree that tax cuts would be irresponsible. Any increased tax or new tax would probably have to occur at the consumption level, rather than personal tax or company. Though a win fall profit tax on oil companies may be appropriate.

Okay! How’s this for a start. A 10-cent tax on served alcohol. It can be done on a wholesale level as you can work out how many nips are in the bottle. I have no idea what it cost to by a drink at a bar in the states. But a difference of 10 cents is not going to change any ones consumption habits. Every 10 drinks is a dollar. Now since American consume alcohol at about 2 gallons per capita over a 12-month period. That would work out to a fair bit of money.

Of course, and I know this will never happen, there is one simple way to solve the U.S. budget problems. Legalize marijuana and tax it.
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Post by Qray »

Image

Major oil companies are currently earning a 8.7% profit margin. Up from the 8.1% profit margin they were earning in the third quarter of 2005. Which all in all isn’t all that horrendous. Especially when you compare it to pharmaceuticals and biotech industry. It's a bit higher than all other industry though.

The past three years have produced one of the biggest cash gushers in the oil industry’s history. Since January of 2002, the price of crude has tripled, leaving oil producers awash in profits. During that same period of time, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing profits of more than $125 billion.

What have they done with this supertanker full of money? Build new refineries (because according to them it’s the lack of proper refineries that’s one of the reasons gas prices are so high)?

Nope.

Build new pipeline and distribution systems?

Nope.

Put the money back into the business in the form of additional exploration of new oil fields?

Nope.

They’ve been spending their money in buying back their publicly offered shares to drive up the price of their stocks (since January 2002, stocks of major oil companies have gained 88 percent; during that period the Standard and Poor’s 500 index has gained less than half as much,) giving their investors a raise by gradually increasing the dividends paid out to shareholders, and paying down their debts to record low levels. ExxonMobil, for example, is virtually debt-free with a cash pile of more than $25 billion.

Ok, these all sound like good things to do, and they are. But they have done nothing to help lower their costs and thus lower the price of their product. That’s why I say opening up ANWR to drilling won’t lower gas prices.

Yesterday Shell’s CEO said he wasn’t about to lower prices. He was going to charge as much as the market would bear. Well when you essentially have a monopoly, a monopoly on a product that people have to have. What the market will bear is anything you want to charge. Until the government steps in and tells them enough. And Bush isn’t going to do that w/o a lot more pressure from the public.

Looking at how the comparable Prudhoe Bay oil fields have been handled, I think ANWR can be opened up to drilling w/o much of a detrimental effect. As far as the price of gas, it wouldn’t hurt. How much it will help I’m skeptical on.

I think alternate fuels such as ethanol are a much better solution for many reasons.

As for the coast of Florida, I’m unfamiliar with the issues in drilling there, perhaps you could educate me.

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Post by lastone »

Right Wing Talk show hosts admits being wrong about Bush

For those interested in current events you might like to check out http://www.crooksandliars.com/
C&L reader Kevin caught this last night on KABC AM-Los Angeles. Talk Show host Doug McKintyre, has turned on Bush. Will this start to become a trend?

"So, I’m saying today, I was wrong to have voted for George W. Bush. In historic terms, I believe George W. Bush is the worst two-term President in the history of the country. Worse than Grant. I also believe a case can be made that he’s the worst President, period. After five years of carefully watching George W. Bush I’ve reached the conclusion he’s either grossly incompetent, or a hand puppet for a gaggle of detached theorists with their own private view of how the world works."
You can download and listen to the full broadcast here. http://images.radcity.net/5147/1424125.wma

And backs up what I have said about the PNAC and religious Right. Remembering that this guy is a conservative.
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