Thursday, June 23, 2005

My Plan to Solve All the Problems

In order to solve the Social Security problem, we need to find a way to invest without issuing more debt or overwhelming the equity markets.

In order to solve the CO2 problem, we need to keep the cost of fossil fuels high enough to make alternatives economically attractive.

The obvious solution, which, through the magic of hindsight, we should have started implementing in 1945, is to run a surplus and buy lots of oil with the Social Security money for the Strategic Oil Reserve. The real lock-box could be under Teapot Dome and wherever else we can store the stuff. It's not too late to start. The one thing we know about oil is that it will become more valuable. If you are able to buy in significant quantities, you can effect the market, and drive up sagging prices. High prices will extend the oil horizon and slow down the burn, reducing annual CO2 contributions. Our Arab allies would love us, and the Chinese would not, which can't be all bad. Moreover, nobody could jerk us around.

6/23/2005 2:07 AM

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2 Comments:

At Thursday, June 23, 2005 8:07:00 AM, Blogger mal said...

There is no doubt in my mind that we have ownership of the current cost of oil. You mentioned the CAFE requirements, it is worth examining the impact of the CAFE on average vehicle mileage in the early 80's. I believe that Oil crash of 1986 was heavily impacted by the implementation of CAFE. Unfortunately, Congress left a BIG hole in it called "commercial vehicles" and Detroit drove a new series of guzzlers thru it.

The US consumes almost 30% of the petroleum produced, mostly for energy. Hard to think that 5 MPG one way or another would not have an impact

We have been lax in Nuclear. Chernobyl and Three Mile Island left big time worries in peoples minds. That does not change the fact it remains our nearest short term opportunity for reduced energy dependency

 
At Monday, June 27, 2005 8:57:00 PM, Blogger jj mollo said...

If we consume 30% of it, we should be buying 35% of it to store for the future. Force prices up and then let the economic pressures find ways to make it more efficient. Taxes are another good way to do it. Think of it as a sin tax. If you want to reduce the use, raise the price.

I think that the Strategic Petroleum Reserve has be one of the most responsible ideas ever to come out of government, second only to CAFE. The loophole was one of the least responsible. This is my main objection to Republicans. They always cave to the big money.

Even if you think Chernobyl is bad and might happen again, we still need to make massive reductions in CO2. This lack of spine is contemptible. We need to take real threats seriously and CO2 is potentially more serious than localized radiation blight.

 

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