Everyone seems to be concerned about the price of gas, but "zero" of the talking heads seem to understand the problem. I have blogged on this before and I am going to try again. Get used to this one. Drilling more oil wells in the USA and finding more oil is "not" going to reduce the price of gas. Got that? Finding more oil is "not" going to lower the price of gas. If that is the case, what is the debate all about? The problem is that we have been debating the wrong question. What we should be debating is, "How can we afford to pay for higher priced gas?" If we can afford to pay for it, then the price is not a problem. Right? That is what we should be debating and drilling for more oil here in the USA addresses that problem. No one has explained the relationship before, so I am going to tackle it here.
Here is a little set up for the blog. Let's say that gas has a cost of $4.00/gal and it is not going to go down. We now have about a 10% unemployment rate. This means that for every 100 workers, only 90 are actually working. The 10% who are not working are being fed by the 90% who are working. By our government policies, those not working end up with about 75% as much money as those who work. With me so far? With my 4th grade math, that works out for the 90% who have jobs are paying 8.3% of their net pay for those who are not working. This means that they have 8.3% less money to pay for "gas". Let's say that currently those who are working can buy one gallon of gas at $4.00/gal. If they did not have to pay for the 10% who are not working, they would have 8.3% more money to buy gas. This means that if gas were to go up to $4.33/gal that they could still buy the same amount as they are buying now.
Now, what are the economic games that we can play in? How about cell phones or TV sets. If we were to make them, would we be able to buy more cell phones or TV sets? The answer is "no". We are getting beat so bad on price (another word for productivity) that we would only increase the cost of cell phones and TV's if we tried to make them. That is not the case with oil. We are among the best at producing oil. Oil is a game we can play in. Green energy is "not" a game we can play against other forms of energy. The money that is going into green energy is a total waste and we all end up with less energy. Less energy!!!
Now where is the payoff for drilling more oil wells? The price will not go down, but the 10% of people who are being fed by the 90% who are working will become workers themselves. We will be able to buy more gas even at a higher price than we can now and we will not have to borrow the money from China. The 90% of people who are now working will be able to keep more of their own money and people who were eating at the public trough will be able to buy gas with their own money.
The price of gas is not a problem for a rich person, but it is for a poor person. Since there is no way to reduce the price of gas, that only leaves figuring out how to earn more and that mean figuring out how to make yourself "worth" more. Raising the minimum wage is "not" the answer. It has no affect on increasing your "worth". In most cases, it reduces the total worth of any group who tried this simple minded approach.
What we have to get over is the fact that the price of gas can not be reduced and further, you can't make yourself rich by savings alone. Most people who have gotten rich have figured out how to increase their productivity or worth. The Super Bowl is tomorrow. Why do those football players earn so much? Simple. They are worth it!!
PS------
I just watched one of Obama's Jew kool aid drinkers, Dan Weiss, explain that the oil from the Key Stone pipe line will "not" reduce the price of gas. I agree with that, but he jumped to his liberal cure that the only thing we could do was to reduce usage. This is the Obama plan, but we know that stopping the Key Stone pipe line will not cause the price of gas to go down either. In my blog, I pointed out the true solution and that is to produce and earn more "money" so that we can afford to buy gas when it is out priced for everyone else in the world. The Key Stone pipe line will allow thousand of our people here who now are out of work to "earn" money. Isn't that the real solution? Watch the debate now that you understand the problem!!!
How much more do you think the USA will earn if we spend tax money sending our kids to colleges where they can earn degrees that are worthless? Will our kids earn more so they can afford to buy this more expensive gas? Are you starting to see the problem? Do you think we are moving in the right direction?
