Know the facts behind high gas prices

  • Follow Letters

Gas prices are a leading media topic. President Obama has been against carbon-based energy, and has used taxpayers' money to make alternative fuels cheaper. He has prohibited drilling for oil and has delayed the permits for drilling.

The United States has coal, oil and natural gas supplies that will last for centuries, yet we import about 9 million barrels a day at about $100 a barrel. Much of that supply comes from Canada and Mexico, but much comes from people who consider us infidels worthy of death.

But geopolitical issues, supply interruptions and global demand are only part of the "high" gas prices. The dollar has been devalued more than 95 percent since 1913, when the Federal Reserve was born. Gas at $4 a gallon is only 18 cents a gallon in 1913 dollars.

The federal government talks about keeping the dollar strong, but it is disadvantageous for it to do so. A weaker dollar makes it easier to repay debt and makes U.S. exports cheaper. It is a tax that hurts the poor and elderly the most.

What about price-gouging and obscene profits by big oil corporations? The profit margins of Exxon and Chevron are 8.89 percent and 10.03 percent respectively. But the profit margins of Microsoft and IBM are 30.84 percent and 14.85 percent respectively. The profit margins of JP Morgan and Citi are 21.91 percent and 17.27 percent respectively. The profit margins of AT&T and Pfizer are 15.98 percent and 12.18 percent respectively.

Also, institutions such as mutuals and pension funds hold 49.3 percent and 63.2 percent of Exxon and Chevron. The stocks are therefore indirectly held by millions of Americans. Seizing their profits for more redistribution schemes will be as popular as delaying BP's dividends to British pensioners after the tragic accident in the Gulf of Mexico.

The subsidy that taxpayers give to Big Oil -- the depletion allowance -- is similar to the depreciation allowance given to manufacturers, businesses and realtors/landlords. If we take away one, then we should take away the other.

The United States has 5 percent of the world's population but uses 25 percent of the world's energy. If higher gas prices discourage use and encourage efficiency, then the result will be better for many reasons -- particularly our soaring debt and national security.

Chuck Tatum

North Augusta, S.C.

Comments (2) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
shamrock 05/08/11 - 02:46 am
Chuck, you have stated

Chuck, you have stated eloquently what so many have before yet nothing changes and no one (with any sense) can figure out why! It is beyond the comprehension of normal men (and women). All we know is the price rises faster than ... (fill in the blank)

verysoreloser 05/26/11 - 09:51 am
'The federal government talks

'The federal government talks about keeping the dollar strong, but it is disadvantageous for it to do so. A weaker dollar makes it easier to repay debt and makes U.S. exports cheaper. It is a tax that hurts the poor and elderly the most.'

Good point. Its ridiculous however to me to consider that we already offloaded all of our exports to China, and we have become a consumer driven economy instead. Are we going back to being an exporter, or are we importers? And who is being helped regarding the debt? Is it the government who is spending money like there is no tomorrow to keep the government as big as possible? Is it to build roads and bridges so that we can get to McDonald's quicker rather than for more worthy projects?

It seems this value devaluation effort is helping the dudes that are still causing the problems. The government should go back to what it should do, defending our freedom. They should also get their act together regarding regulating national markets such as the commodity exchanges. If the commodity exchanges weren't being gamed, gas prices and consequently the general economy would be more stable and growing.

Back to Top
Search Augusta jobs
Top headlines
Jury convicts man who killed Vernon Forrest
Seven years after Augusta boxer Vernon Forrest was shot and killed during an armed robbery,  an Atlanta jury has now convicted the shooter of murder.