Would Ron Paul policies keep gas prices from skyrocketing?
Posted May 11th, 2008 by SirFelix
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I believe that most people in America are "asleep". They don't care about altruism or freedom or justice, they only care about consumerism and self-indulgence. They don't care about unjust wars or loss of civil rights. They don't care about any of these things unless it affects them directly. Well now, gas prices are skyrocketing and it is starting to affect everyone.
Would Ron Paul economics (Austrian economics) prevent this from happening? And if so, I want to start informing people about it, by talking to them or by making a Youtube video, but I am not as economically educated as some of you.
I believe that if people see Ron Paul's message as a cure to their financial worries, then it would only help our Revolution.
Any comments, suggestions, or insights?
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backing off from threatening Iran...
~
with our navy, removing the sanctions, talking with them, as we did in the past with the Soviet Union and bringing the troops out of Iraq...
...give them a motivation to start talking with one another...I'll bet oil would drop twenty dollars a barrel. right now it's up to 92...(so says Ron Paul speaking with reporters back in Iowa)
Ron Paul's First Action as President / Oct 27 '07 (2:23 min)
http://www.youtube.com/wa...
Yes, Ron Paul's policies would decrease the cost of gas
Only one man will be able to address the real causes of inflation.
He would also let the states grow hemp as fuel, food, clothes, whatever.. and Hemp is a more efficient source than corn.
He would also reduce the amount the military needs by using a smart non-interventionist policy overseas. The Pentagon is the largest non-state/country consumer of gasoline.
Good point..
.. about the US military being one of the largest gas hogs in the world and how it would reduce demand globally.
Your question assumes that most cars
would currently be using gas. If we truely always had free markets with no subsidies, gas powered cars would not be the only option and may only occupy as little as a single digit market share.
The price of oil...
... to all countries that buy through the petro-dollar system (the majority of countries), the price of oil is directly related to the strength of the dollar. The weaker the dollar gets, the proportionally higher the price of gas, especially in the US.
The dollar gets weaker everytime the Fed lowers the interest rate ("prints" money). The Fed is printing money constantly and at rates never before seen in history for a large modern nation. This activity weakens the value and the price of oil goes up because the value of oil is pegged to the dollar.
Ron Paul would work to stop the printing of money and to reduce government activity that required the printing of money. If successful the dollar would strengthen and the price of oil would go down or stabilize.
The inevitable consequence in our system of raising interest rates (stopping printing money) would be a slowdown in investment driven business expansion. Gas would be cheaper, but jobs would be created more slowly.
In other words, if Ron Paul became president, as he has stated, he would work to reduce spending and the need to print money. The result would be cheaper gas but depressed new business activity...
No
Nothing will drive the price of petroleum down except the decrease in demand. That won't happen until it gets expensive enough to force us to be smarter consumers and use alternatives. Clearly this has not happened yet.
Ron Paul is about free market, fortunately.
--------
We don't know how to mind our own business
'Cause the whole worlds got to be just like us
Now we are fighting a war over there
No matter who's the winner
We can't pay the cost
-Steppenwolf 1969
The biggest factor..
.. in oil prices is not demand, it is the value of the dollar. The vast majority of the oil sales in the world are done in dollars, or "petro-dollars". The weaker the dollar, the more expensive gas is. The dollar gets weaker everytime the Fed "prints money" (lowers interest rates) and the Fed is printing money like never before seen in a large modern country. The German Wiemar Republic was the previous record holder (the classic example country of hyper-inflation) and the US is out-printing them by more than a factor of 10 and on a MUCH larger global scale...
well, how im figuring it is
well, how im figuring it is that the creation of liquidity has already occured. One of the major contributing factors to the rise in oil is that there are too many dollars floating around. They have become worth less so it takes more of them to buy petrol with. There isn't anything we can really do about that. What we CAN do is to cut spending. Remove our troops from the Arabian Penisula. Introduce competing currencies with the FRN's on one side and a silver or gold backed currency on the other side. Phase out Social Security (it's going to get phased out anyways because we dont have a large enough population to tax at 80+% of their entire yearly earnings to pay for all the baby boomers that are retiring). These things would go a LONG ways towards bringing back the US from the brink of a complete and total economic meltdown and crashing of our currency.
No
Not unless it was retroactive in timing...in other words not unless he was elected in 2000, pulled all troops home and kept from going to war. No inflation of dollars in circulation coupled with little threat to the supply chain being disrupted or destroyed = no price rise.
Curing what ails us is impossible at this point and the pain must be endured from this point forward as more and more money enters circulation via the commercial banks printing it from the authorization implied and given in the deficit spending process...see Melgesman's dissertation entitled "I have prepared this for those..."
http://www.dailypaul.com/...
Free market isn't a short term fix
If you think Ron Paul as president would take immediate action to lower gas prices, you're wrong. What he will do is begin to stop taking actions that interfere with market economics and return energy to the free market.
He's openly stated that he would get rid of the department of energy. He's always been a stict non-interventionalist not just in foreign policy terms, but economic ones as well.
He would work to eliminate the environmental rules and regulations that have crippled our refinement and energy generation industries, and open the market to better sources of alternative energy by stopping the subsidies spent on sure losers, like corn ethanol and biodiesel. There are much more efficient and inexpensive means to deliver energy and without government subsidised competition, they will come to market.
The US interference in the foreign market oil industries have given us OPEC and invited war with Iraq. The Bretton Woods agreement was well intentioned and on the surface seemed to favor the US interests, but it fueled the flame of distrust in the Arab world because they resent our involvment in their market.
Austrian economics lives and dies with supply and demand, and should eliminate the inflation that invites volitility, eliminate barriers to doing business, and will be a long term solution to what ails us. It is really the only moral system of economics that exists.
I have never believed in short term strategies...
Thanks for your comments. Long term and sane strategies are always the best, but greed convinces many people to make short term decisions.
Precious metals are what our forefathers envisioned as currency, but would the limited supply of precious metals hamper our economic growth?
It's arguable to say the least
Precious metals backing our currency would not be a light switch fix to what ails us. Dr. Paul has only spoken of the gold standard as an ideal to what we could achieve if we were dedicated. It is not something that could be done overnight or even in a few presidential terms.
There isn't enough gold on the planet to back all of the currency which currently exists, we could not implement the gold standard without some serious thought put into the transition.
What Dr. Paul advocates is a few subtle changes in our monetary policy to make it more honest and sustainable. He has introduced bills into congress that would make competing currencies legal...basically Chase Bank would be allowed to issue their own money. Recently a gold proxy printing company was raided and seized by the feds, and all of the gold that backed that money was stolen.
Competing currencies would work to keep the money printers honest, because it would allow people the option of using currency that better maintained it's value.
It's no easy task to reinstate fiscal sanity in the country, but we need to dedicate ourselves to doing it one step at a time.
cost of gold...
At what price would gold cost per ounce, it it were to back all of the money in the world? And wouldn't the price of gold naturally rise to this level if the gold standard was re-instated?
Dr. Paul..
doesn't want to have ALL money backed by gold. He wants gold and silver and gold and silver backed currencies to compete directly with the fiat system to keep it in check. Dr. Paul has said this explicitly on severals occasions. This was Benjamin Franklin's preferred system also.
Fiat systems are generally stable if the amount of fiat money in circulation is not greater than the annual GDP (economic output of the economy) plus or minus the amount the growth. Right now the amount of fiat money is 50 TIMES the GDP and growing fast. By far the greatest expansion of fiat money with regards to GDP in the history of large nations. The previous record holder, now in a very distant second place, was the German Wiemar Republic -- the poster nation and prime example in history books of hyper-inflation.
In a system with competing metal-backed currency and fiat currency, if the fiat system got out of hand, people would begin to switch over to metal-backed currency since the fiat would be losing value, therefore keeping abuses of the fiat system in check.
Fiat currency does allow easier expansion of credit for investment driven business growth and to provide funds for needed government projects. It just needs something to keep in check and to keep the bankers from stealing everything of value and gathering it ALL to themselves...
Some perspective
Haven't done the math to work in all of the world's currencies, but here's an example of the US currency alone.
All the the gold that's ever been mined on earth has been estimated at 142,000 tons. Assuming about a grand an ounce (currently around $850) all of the gold on Earth would only be worth about 4 trillion dollars. There is currently around double that printed in the US alone.
That's why the math doesn't work for an instant backing, because there isn't enough gold in existance to back even half of the US currency.
An idea which may work would be a precious metal mosaic, or backing currency with 10% gold, 50% silver, 10% platinum...etc. Backing our currency with real value is an idea that may take a generation or more to figure out...but if we stay dedicated to the ideal, we can get there.
yes
One 1/4 oz silver to one gal gas same as40 years ago
Thank You.
I forgot about the "inflation tax". I also wonder about the policy of non-intervention in foreigh policy, and its ramifications to the price of oil.