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ETpro's avatar

Do government subsides to Big Oil make sense?

Asked by ETpro (34217 points ) May 17th, 2011

The GOP is against any government support of industries like the auto industry, high-speed rail, or renewable, clean energy. But oil companies, they argue, need taxpayer support Is that because the fossil fuel industry is the most profitable industry that has ever existed in the history of Earth, and therefore only they need corporate welfare? Or could it be because the Big Oil gives so much money to right-wing think tanks and Republican election campaigns?

The GOP claims it’s to keep the price of gasoline cheap at the pump. But who pays for those subsidies? Are they funded by magic money that floats down from the clouds, or do the very taxpayers who have to buy gas for their cars pay the taxes to prop up the record profits of Big Oil? And if we really wanted a moronic energy policy, why not just increase the subsidies enough that the oil companies could just give away gasoline free? Boy, that would help the US national debt come down and make us more energy efficient—NOT!

The US achieves electrical power generation efficiency of 34% today. Japan is at 90%. West Germany and France are around 85%. Why? Because we use tax money and tax exemptions to Big Oil to keep fuel oil and gasoline cheap here. Apparently, voters still believe in Santa Claus. Do you believe in Santa? What’s he really brought you over the last 30 years—more and more prosperity, or a bigger and bigger national debt and jobs flying off-shore?

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10 Answers

Espiritus_Corvus's avatar

No. It is contrary to every tenet of a free market system. If it weren’t for oil and auto industry subsidies we would today have integrated mass transit systems throughout the US and be totally equipped to handle any energy crisis that we have suffered from ‘74 to now with very little discomfort or interruption to commerce, especially the disruptive inflationary prices of consumer goods due to transportation costs. In times like these, more Americans would be willing to dump their cars, including the related monthly payments, taxes, insurance, annual fuel costs and maintenace, and pour all the money they save into their homes, pensions, vacations and consumer goods. The money each household spends on their autos is quite significant and would be unnecessary if we had the transit systems, trolleys, etc., that were found in every small, mid-sized and large city previous to WWII.

Ron_C's avatar

Obviously only in Alaska, Louisiana, and the Tea Party Caucus.

marinelife's avatar

No, they do not, especially with their record-breaking profits right now.

incendiary_dan's avatar

It only makes sense in the twisted logic of the revolving door corporate/government system in which presidents of every stripe have stated again and again that their main job is growing the economy. Oil, being the primary fuel for industry, is something that the government is keenly interested in keeping that crude flowing.

mazingerz88's avatar

Wow, no rebuttal from a GOP supporter yet.

ETpro's avatar

@Espiritus_Corvus This is one of those odd areas where I am more conservative, free-market people, or at east the Con Men who claim to be for that except where they want to push corporate welfare instead.. I can see subsidizing industries only when we realize that their development is a national priority—not to give one group of corporations a competitive advantage over otheres or to encourage wasteful consumption for corporate gain. The public/private initiatives that built such national treasures as the intercontinental railway, the Panama Canal, the Hoover Dam, the Interstate Highway System, the Air Traffic Control System and NASA are all examples of using wise taxpayer investment to do something that paid dividends hundreds or thousands of times over the initial cost.

@Ron_C Well said.

@marinelife As noted, Big Oil is the most profitable industry in the entire history of the planet. If they need welfare, then why on Earth doesn’t everybody need welfare. How about we all tax each other to give each other’s moeny to each other?

@incendiary_dan To be fair, Obama and the Democrats are now trying to repeal the subsidies, but they have no chance of getting that through a Republican Controlled House of Representatives, or past a Senate where Republicans can filibuster it.

@mazingerz88 If we build it, they will come.

incendiary_dan's avatar

@ETpro Obama also decided to increase all sorts of domestic drilling to appease the industry, even reopening deep-sea drilling and other dangerous methods.

mazingerz88's avatar

This just in I guess. Republicans block the bill ending oil subsidies. Dems retaliate by blocking oil drilling in the US. Heh, kids.

laureth's avatar

This article has an interesting graph, which shows the difference in relative size between NPR and Planned Parenthood subsidies (“way too big, too expensive!”) and oil company subsidies (“not a waste, necessary, not that big”)...

ETpro's avatar

Nobody is serious about deficit reduction when a whole long list of things are off the table. Everything has to be on the table, then the American people need to decide how much of it they want enough to actually pay for in taxes, and move on from there.

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