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

[stuffy]

Originally Posted by GeneW

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.



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

a company that makes cakes does not get their raw material (let's say flour) for free because it's useless without them to make something edible out of it.
they have to pay for the flour just like an oil company has to pay for the raw material from whoever owns it, which in this case is the people of alberta.


sure, i agree that corporate welfare is wrong,
but the government got themselves into this trouble by deregulating the banking industry.
the only reason why canada's banks are in such good shape compare to those in the u.s. and europe was that our government resisted deregulating the banking sector in the mid 90's.
as far as i'm concerned, industry has proven that they cannot police themselves.

[GeneW]

Originally Posted by stuffy

a company that makes cakes does not get their raw material (let's say flour) for free because it's useless without them to make something edible out of it.

If they raised their own wheat and ground it into flour would they owe the local government money because the wheat grew out of the land? How about the people in the local area, since it's on "their" land?

It's not the much of a difference... raising wheat requires land. So does mining tar sands.

Why does the farmer not pay by the bushel for raising corn or wheat but the oil company pays for mining tar sand? Maybe because there is enough money being made to "justify" the reasoning?

Originally Posted by stuffy

but the government got themselves into this trouble by deregulating the banking industry. the only reason why canada's banks are in such good shape compare to those in the u.s. and europe was that our government resisted deregulating the banking sector in the mid 90's.

as far as i'm concerned, industry has proven that they cannot police themselves.

First of all, it was the US Mortgage industry that got into trouble, not the banks.

The cause of all of this was when two US agencies that loan money for mortgages, Fannie Mae and Freddy Mac, were told to loan money to minorities in order to curb "unfair lending practices". This was done by the Clinton Administration in the 1990s.

For the Reader's digest version go here

http://www.lewrockwell.com/suprynowi...ynowicz95.html

The original New York Times Article about the disaster, nine years before it happened, go here...

link

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Canada didn't play this shit and hence isn't in the shit today.

For a very long time Fannie Mae and Freddy Mac have also "bundled" securities. Much longer than the current period. Fannie Mae certificates were rock solid investments, before it became fashionable to Social Engineer via the Banks.

The US Mortgage Industry "followed" suit, a safe thing to do. Too bad that a few bad actors really did entice a few dummies to sign on the dotted line, because their over reach and foolishness is going to hurt an industry which has done nothing wrong except blindly follow the two leaders- Freddy Mac and Fannie Mae.

The people who deserve punishment are Bill Clinton, Andrew Cuomo, and both Dems and Reps who watched this train wreck and sat on their hands because they figured that the Housing Market was a "measure of prosperity".

Gene

[jclo3313]

Gene,
What is the third letter in your name?

[Shroomster]

Originally Posted by jclo3313

Gene,
What is the third letter in your name?

????

[GeneW]

Originally Posted by jclo3313

Gene,
What is the third letter in your name?

You can count. Right?

Gene