GM Govt. Bailout?

[GeneW]

Originally Posted by stuffy

i know that your opinions are framed around your libertairian beliefs, some i share and some i don't.

i think it's perfectly logical for a government to charge royalties for the resources extracted from the land. it's just the price of doing business as far as i'm concerned and i disagree with the notion that resources have no owner. the tar sands are more subject to the market prices as you've mentioned than royalties anyway.

The oil is useless unless someone takes a risk to extract it, transport it and market it. That risk taking ought to be rewarded and not punished with ever higher taxes (Royalties). If I had my say there would be no Royalties.

However this is the real world. People will demand what they can get from whoever has more. That's how it is. The attitude of "Cost of Doing Business" to me is really the attitude that business exists at the sufferance of the State. "They'll manage". What happens when "they" can no longer manage to pay those Royalties or the marginal cost of the Royalties plus the costs of extraction exceed the income from the oil?


My point is, what happens when the Royalties get so large that one cannot do business?

The Tar Sands have been there a very long time. Extraction of the sands was not practical until recently because of market Will the Premier cut the Royalty rates if the market prices of oil continue to fall?

What of all of the new dependents who take that extra revenue? Will they manage without it too if the Rates fall? Perhaps the Government cannot lower the revenue from the Royalties because someone is now dependent upon it?

I see a lot of this problem where I live. When the Steel Mills were fully operational governments expanded to fully use the tax revenue. The Steel Mills are mostly gone now. Those local governments who grew fat on manufacturing taxes now run speed traps (speed limits are made artificially lower and then police entrap people who "speed" through the area). These governments have also raised property taxes and income taxes and go begging to the State Capital for money.

You have to focus on the long term, not take more money because businesses "are doing so well". So even if we disagree on the idea of Royalties it's still reasonable to set them at levels which do not endanger the businesses.

Originally Posted by stuffy

royalties and jobs from oil have made alberta (and by alberta i mean it's citizens) one of the richest regions in n america and even with a lower oil price and slowdown in worldwide economy, they havent' been affected nearly to the same degree that manufacturing-dependent ontario has been. the alberta government has cut cheques for every citizen of alberta because of the huge government surpluses so just about all boats have been floated in alberta thanks to the resources in that province.

Lots of good paying jobs in the fields. To me that is reward enough for having a business nearby.

As far as "checks" go....Bastiat warned that once citizens of a Democracy can vote themselves money out of the Treasury hard times are not too far behind.

As best evidence let me offer the spectacle of the US Congress "bailing out" big banks and investment firms which followed the lead of US Home Loan agencies by chasing shaky borrowers and then "bundling" loans into "securities". The program to buy the "toxic debt" will no longer be taken, instead banks can just get the money. Welfare for the super rich, which to me is just as wrong as welfare for able bodied folk who would rather loaf than work.

Gene