High prices at the gas pump has prompted President Obama to make a public speech about his plan for solving the United States' long-term energy needs. Knowing this issue is paramount to his re-election, he addressed the issue by putting pressure on Congress to either "stand with the big oil companies, or ... stand with American people" (Fox Business).
The President is urging Congress to end subsidies for oil companies because he claimed in his speech - aired on Fox News - that oil companies do well without them. "Exxon pockets nearly $4.7 million every hour" he said (Fox Business).
The reason for this push is an upcoming vote today on legislation that would end tax breaks for oil companies in the amount of $24 billion over the next decade, while extending tax breaks for green energy projects. Keep in mind this is a Democratic backed bill.
So, does the President really have a heartfelt compassion for American citizens, or is this merely a plea to remove the subsidies from one industry and give them to another? According to what I've gathered from several articles and the subtle hints contained in the language of his speech, the latter seems the most logical.
I am opposed to government subsidies for two reasons. One is it forces taxpayers to prop up industries they may not support. Second, it's simply government welfare for corporations, and it picks the winners and the losers of an economy. This contradicts my belief in the economic principle of free markets. A free market is driven by consumers on which an economy thrives. Without them, economies would be non-existent.
By shifting the subsidies from oil to clean energy, it doesn't make one difference. This is just smooth political talk in an attempt to woo voters from those "evil" oil companies taking advantage of the consumer while raking in record profits. Although I agree with the President that the subsidies need to be removed, I don't agree that we should now start subsidizing alternative energy programs. I will reiterate over and over again that the free market best allocates resources better than the government.
My solution is simple: remove the subsidies for the oil companies and don't subsidize clean energy. You saw what happened with big oil. Also, create the environment where energy companies can compete (both renewable and non-renewable) and let the free market (consumers) decide what works for them. Competition will bring down prices because Americans want the best quality for the cheapest price. In order to make a profit, energy companies would be wise to keep the consumer happy.
REFERENCES:
Fox Business. End tax breaks for oil companies. March 29, 2012. Retrieved March 29, 2012 from http://www.foxbusiness.com/politics/2012/03/29/obama-end-tax-breaks-for-oil-companies/
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