Stimulating the Economy

[Durgan]

Governments periodically offer tax rebates and direct loans to various people or companies to simulate or save jobs. These efforts are directed to a select few. The common folk generally get nothing for various reasons.

Now what effects all people in our society? Gas or fuel for vehicles is the answer.

I muse about adjusting the price of gas to about the half current price. This would spread a stimulus automatically amongst all of the population. The price of every product is affected by the cost of fuel. There are various mechanisms available to reduce the cost of fuel. Any tax loss would be readily recovered by the surge in purchasing power spread throughout the land.

[demi]

in an ideal world everyone would produce their own food from their own land and live in communities where everything is on your doorstep thus reducing the need for cars altogether.

[Durgan]

in an ideal world everyone would produce their own food from their own land and live in communities where everything is on your doorstep thus reducing the need for cars altogether.

I am offering a possible solution for the real word, not utopia.

[grahamhobbs]

Subsidising petrol for cars is not going to do much good for the planet and probably not much for the Western economies. Western investors stopped investing in the West a long time ago, taking their money East and slowly our industries and manufacturers disappeared, we produce nothing anymore (except perhaps armaments). But we have lived off cheap products from the East, including cheap money from the East to buy those same products on 'tick'. All that has come to an end and we are left unable to produce anywhere near enough for our own needs or to exchange with others. Until there is massive investment in local industries (and reduction of wages and conditions down to those in China or India?) we will never be able to compete with the East. Tinkering with tax rebates, petrol prices and the such like are not even scratching the surface.
Of course there is another route and enough land for us all to be self sufficient, even in little old England, but it is all 'owned' by the top 5%.

[Paul_C]

its not a subsidy its a reduction in the crippling tax we pay on fuels and also fixing the price to prevent (as is occuring at the moment in the UK) price fixing by the biggest players.

global oil prices drop we end up paying more, never less.

electricity has been increasing at massive rates simply because privitisation had the exact opposite effect to prices to what was toted ie the fact the a free market would see lower prices due to competition. its rigged now with all prices being more or less the same

same with gas.

reducing the taxation from this source will create more free wealth which can then be spent by people on stuff which then (hypotheticaly) goes through the economy ina wave of employment and increases in sales etc.

that said we do need to be creating the goods ourselves not importing them as that creats a net removal of wealth from the country which also has the neat little effect of creating a much mroe stable economy with long term jobs which then permits more spending and the happy cycle continues.

HOWEVER

the powers that be only look at the bottom line which they can gouge out from people to prop up PLC as it fails instead of rebuilding the structures it needs with a generational approach towards infrastruture, employment and industries. instead of pendulum politics which creates this mess to start with to the expense of the poor schmucks who are left at the end. you can bet the politos bug out on the gravy train before it all falls down. .

[The Riff-Raff Element]

Durgan - you are right: this would bring about stimulus. However, I fear that the nature of this stimulus would be to rise us up and then drop us even further in the poo.

Any stimulus needs to break us free from cycles of unsustainabilty. If there are to be subsidies they need to be investments in locally sustainable energy production and in de-globalisation.

The time has come to make the world a larger place again: we don't have the resources to keep shrinking it.

[baldybloke]

Whether we have reached 'Peak oil' or not is open to conjecture but by reducing the price of fuel to increase consumption is only going to make matters worse. The reason for higher fuel price is the increase in demand on the world market. China, whose cars sales have gone ballistic, along with their growth in production, with its associated transportation requirements is a big part of the problem. This will only getter more pronounced in the next decade or so. Globalisation is never going to be the solution as it only benefits the big corporations who get manufacturing done cheaper and sell in the west at a premium, thus maximising profits.
The only ultimate solution is to return to a localised economy where wealth and goods stay with a community, or area. I believe that the Transition Towns concept could be part of this new future. The books that are published concerning Transition Towns make inspirational reading. Another book that reinforces these views, and explains in alarming detail is 'Powerdown' by Rob Heinberg.

[contadina]

in an ideal world everyone would produce their own food from their own land and live in communities where everything is on your doorstep thus reducing the need for cars altogether.

I am offering a possible solution for the real word, not utopia.

I think it's you that needs to wake up to the real world.

Lowering tax on fuel does no good whatever other than pander to car and truck drivers in the short term. Oil will still run out (the easy to get at, i.e., cheap stuff anyway) and there is no point in making it cheaper so it happens faster! Also, the more oil costs the more relatively economic become the alternatives. The hands of government and big business will only be forced to seek alternatives when oil costs are so high that they damage the economy. Although I think this already happening, but will only get worse.

As local businesses become viable, moreover, it will revitalise small towns and villages and bring some of those industries back that have been shipped out East.

[boboff]

Hmmmm, anyway without any " You need to wake up" statements, this is my opinion on the matter.

Our economy is a vast and complex one, in which there are millions of decisons made every second, and we still see inflation at 1 - 5 %, growth at 0 - 2%.

Tax, profits, wages, effort, energy, call it what you will, all are generated and spent in the perfect storm of the global economy. It's a great big ship on a great big Ocean, and nothing we do will change it's cource quickly or possibly in the way that we intended.

Because of this Durgans view, the views of others, and the policies of the world governments are really all valid, and all invalid.

What we must all be clear on is what direction we are going in, assuming that this is a relative measure of quality of life, standard of living etc then globally you could argue that we should double what we pay for fuel, the additional tax being used to build schools, shelter, water and infrastructure in the poor countries, or stop tax altogether allow the markets to set the pace and build our infrastructure, both could work, but probably won't, so we are left with a Paradigm of life itself.

Think about this. The day we use the last drop of oil on the planet, we discover a new way of generating energy and power which is environmentally neutral, in some ways the Doom sayers will be proven wrong, but we would still end up having to pay for this new miracle, and it would still be part of the economic complexities of the planet. When you have 1.1 billion people in China alone, who have a huge potential to consume resources, it is never going to be the way that it was. We do have a choice, to view that different future as a woefull potent doom laden Armageden, or to see that there is as much chance of it being a joyfull eutopia, reality dictates it will be inbetween the two.

The point? Well none really except we need to accept that we need to change the things we can and want to change, accept that the economy of the West will have to suffer whilst the growth in the developing world catches up, and that out place will be to innovate and allow the expansion, and to benefit from it. We choose to pay people to stay at home and not work, to have children, to educate them, to build roads and hospitals, to fund the poilce to give us a socieety in which we feel safe, all up to a point, and all by far in a way in excess of much of humanity.

Cutting the price of petrol, it could help, or not, the problems will still occur due to the dynamics of a global market where we now all form part of a massive global picture, hugely complicated and unfathomable. The more self sufficient we become, in any way, the more able we are to cut those ties to this picture, and be independent of it, in part. Talk of utopia, and implications of ignorance of the "real" world are symantics and offer no real benefit to finding the answer, as all answers can be part of the solution, but only if one person is willing to actually act on it.

[gregorach]

Well, I'm of the opinion that we're already past the peak of conventional oil production, and that the economic troubles of the last few years are a reflection of that. We're into the zone now where supply is fundamentally constrained by geology, so price is a function of demand, and that demand is constrained by price - it's a dynamic equilibrium. Reducing the price of fuel by reducing taxation will cause demand to increase, which will drive prices higher until the system returns to equilibrium. Result - exactly the same price to the consumer, only with a greater percentage of the take going to the oil companies and less going to government. Whilst I don't exactly trust the government to spend the money wisely, I trust the oil companies even less.

There ain't no easy answers.

[demi]

fossil fules will soon be becoming a thing of the past.
we should be focusing all our efforts on developing better technology for harnising renewable energy sources.

[Paul_C]

Well, I'm of the opinion that we're already past the peak of conventional oil production, and that the economic troubles of the last few years are a reflection of that. We're into the zone now where supply is fundamentally constrained by geology, so price is a function of demand, and that demand is constrained by price - it's a dynamic equilibrium. Reducing the price of fuel by reducing taxation will cause demand to increase, which will drive prices higher until the system returns to equilibrium. Result - exactly the same price to the consumer, only with a greater percentage of the take going to the oil companies and less going to government. Whilst I don't exactly trust the government to spend the money wisely, I trust the oil companies even less.

There ain't no easy answers.

yet teh fact that our prices in the UK are driven up in the main by tax is a drag on the entire economy. ultimatly the money from that tax could be used to trickle through the economy as a whole creating more wealth which is as i read the point of the thread.

as to renewables

most of them are energy boondogles. they require vastly more energy to create and install than they can hope to create. and are oftern reliant on very dirty precursor technologies to create the raw materials.

ultimatly they DO have a place, solar in the desert is a prime example, creating solar collectors there as part of an international grid system would mean that countries not blessed as such can still use traditional generating systems but at a net lower pollution rate as they aare almost garuntteed to opperate at near peak efficency year round. the UK well isnt exactly blessed with the right conditions for peak production

ultimatly fossle fuels are not the problem, Coal for example CAN be used in a clean manner using carbon trap systems which also can then be used to harness the materials which are used in industry ( a technical double whammy energy wise as your creating energy with an industrial proccess not spending it) but the econuts who are not grounded in engineering refuse to look at new technologies around anythiong they dont deem to be clean or renuable.

Coal is a plentiful fuel which with some alteration to the systems used in its electrical generating facilities could easily be seen as clean with next to no emmisions. things like reusing the heated water instead of venting it permits a greater proportion of the energy to be used as you are not constantly reheating cold water (water requireing a considerable ammount of energy to heat even by 1 degree) using any waste heat to heat local homes and businesses for free, using a differnt medium as for the energy transfer medum to the turbines

having carbon trap systems where the waste carbon (soot) is trapped and reprocessed into fuel or carbon products, catching the Co2 for use in industry


using stirling engines to use the remainder heat anywhere (these run off very small thermal changes) to produce some electrical power or motive power would also help

the trick with energy use is to use it as efficently as possible and to look at all of the energy gradients involved. we use water as a transfer medium because we always have. there are other more effective ones avalible.

[demi]

the fact is though, that it is just a matter of time before the fossil fules run out.
it is enevitable that we will all have to convert to renewable energy in the future.
the science and technology field is advancing at a phenominal rate.
with every advancment we become more efficient and able to aquire energy from renewable sources.

i can imagine in the future houses will be built using soler roof tiles, where the whole roof will be interconnectoing soler pannels able to produce enough energy to sustain the entire house hold.
same for cars. they will be able to incorperate soler technology into the bodywork of the cars.

the sea is another porweful sorce of 'free energy'

there is an infanate amout of energy arround us, we just need to get better at harnessing it. and thats what we should be spending time and money on.

[gregorach]

yet teh fact that our prices in the UK are driven up in the main by tax is a drag on the entire economy. ultimatly the money from that tax could be used to trickle through the economy as a whole creating more wealth which is as i read the point of the thread.

It's not like taxes just disappear into a black hole though, is it? They get spent on (e.g.) paying people's wages, which they then spend. Tax revenue always ends up back in the economy somewhere else, unless the government's running a surplus (which it very definitely isn't). The question is whether it's more economically efficient to circulate the money via taxation and public spending or just to leave it in people's pockets for them to spend themselves - which is an argument which gets very technical very rapidly, involving concepts such as the velocity of money and the fiscal multiplier, at which point I have to admit I'm out of my depth.

I'm pretty sure it all ends up in China eventually though...

[greenorelse]

We are past the peak of conventional oil production and are experiencing the results of that with this so-called 'economic' crisis. Lowering fuel taxes merely accelerates the use of conventional fossil fuels and their decline whilst industrialising more and more of our environment in search of replacements. And Canada is one of the most climate-change-supporting countries in the world per capita, wanting to be more so.

a long ragged slope of rising energy prices, economic contraction, and political failure, punctuated with a crisis here, a local or regional catastrophe there, a war somewhere else—all against a backdrop of disintegrating infrastructure, declining living standards, decreasing access to health care and similar services

Familiar? In many ways, it's applicable to all history's collapsed civilisations but this time, it's global.