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America, Land of the Hostages?

Even now, gasoline is actually far more expensive than it appears at the gas pump. We all know that. The amount we pay at the gas station does not include the cost of our military in the Persian Gulf. Even during times when the role of the military in securing our foreign supply of oil was not so obvious as it is now, the income taxes we paid for "defense" were in part paying for our oil imports. The battleships recommissioned during the 80's are much better suited to Persian Gulf situations than to superpower confrontation. Our Federal income taxes go, in part, to effectively subsidize imported oil.

The cost of one year's worth of that imported oil was $50 billion before the Kuwait invasion and now threatens to exceed $100 billion. With the continued decline in Alaskan oil and the way we have arranged things, oil imports will only continue to increase. As things are now, our balance of payments, already a threat to our economy, is clearly headed further and faster in the wrong direction. The fundamental problem is not only that the oil upon which we have allowed ourselves to come to depend is not ours. Making it impossible to free ourselves from this dependence is a way of paying for that oil that foils corrective economic forces.

The irony is that in a true free market system, one without a hidden military subsidy of foreign oil, energy sources from within our own borders would be competitive. Extracted from shale, there is more oil in the US than in the Middle East. Shale oil would be competitive if the price of imported oil were little more than it is now...and if that price could be counted on as crises come and go. There are other alternative indigenous sources that could become competitive, including synfuels derived from coal, if only free market forces prevailed.

Given that we are not going to turn our military over to the private sector, the best approximation to a free market system would be one in which the tax on imported oil would be committed to paying the appropriate share of the military budget. Our income taxes would be cut by an amount equal to the tax levied on imported oil. Altogether, this tax swap would create no increase in the cost of living. But, a much better approximation to a free market system would then prevail.

Suppose that we were to agree that 20% of the military budget should go to providing a secure supply of foreign oil. That would say that our income taxes would be reduced by 20% of the roughly $300 billion military budget. That $60 billion in revenue would be made up by the tax levied on imported oil. Even if the price of oil were to return to its pre-Kuwait level, this would give our own sources of fuel a chance to compete. Altogether, we would be paying the same price for our oil while freeing market forces to reduce our dependence on the whims of foreign oil lords and market manipulators.

To turn our energy nosedive around, it is necessary that we see the actual price of our gasoline when we look at the gas pump and not have it hidden in our income taxes. But to foster indigenous rather than foreign sources of energy, the tax should be on imported oil rather than gasoline. Unfortunately, after a decade of borrowing, that tax must be far more than any cut in the income tax. In effect, we now not only have to pay for our current military budget, but for the debt amassed to support our military expansion during the 80's as well.

Of course, the tax would be regressive, tending to disproportionately pinch the average American who has adjusted to a way of life based on apparently cheap energy. A poorly insulated home far from work looks more attractive than it should, as does the acquisition and maintenance of a car rather than the use of public transportation or (heaven forbid) a bicycle. It will take time to change our course. Adjustments in allocation of energy costs must also be made with enough time allowed for changing how we do business. For example, people will learn to communicate rather than travel with an attendant expansion of communication services at the expense of transportation. The imposition of a tax on imported oil would have to occur on a firm schedule, so that people and their businesses could plan. Also, using the income tax as a mechanism, means would have to be implemented so that those at the low income end could obtain the tax credits necessary to their survival. Finally, taxes on imported oil products would have to be imposed such that businesses would be discouraged from taking their manufacturing overseas to avoid the import tax on oil. Such a tax would be necessary for the devastating reason that our military not only subsidizes our imported oil, but that of our economic competitors as well. The complexity of a corrective taxation system points to just how profoundly our current system of military subsidization distorts our way of life.

Few politicians are prepared for the retribution of an electorate faced with still higher charges for gasoline, fuel oil and all of the products to which oil contributes. In the week before my sixth chemotherapy session, NBC devoted a major part of its evening news to a segment "How America Stands". Featured was a live interview with Dan Quayle in which anchorman Tom Brokaw brought in two "average Americans" to ask questions. Expressing concerns about our beleaguered educational system, their questions were a credit to America. Quayle's answers were the equivalent, in comic strip terms, of empty balloons. For me, the exchange encapsulated the decade-long failure of our nation’s leadership. These were Americans articulating the urgency of our situation and a patriotic willingness to sacrifice. They were in stark contrast with a Vice President trying to perpetuate Reagan's world of make-believe. As I remember, the most telling question included the "S-word" "sacrifice". In his answer, Quayle could not bring himself to use "that" word. Much like the Don Juans of TV who stammer and choke as they try to find how to not say "love", in his empty answer he finally found a word to substitute for "sacrifice".

I would not be taking time from the eye of my illness-storm to write these words if I did not yet believe that an awakened America is willing to sacrifice. Extant across our land is a patriotic willingness to sacrifice that is born on a tide of growing awareness. But, it will only be garnered if politicians sense that the electorate is ready and are rewarded for speaking rather than obfuscating the truth.

I have a deep respect for the simple expressions of "my country right or wrong" patriotism we hear from our troops in Saudi Arabia. Their seeming confusion as to why they are there should not be mistaken for a faltering resolve to fight for "what is right" as my father used to say. I decry our cynical leadership for its co-opting of such patriotism. These, our fellow Americans, are caught in the final closing of a trap set in the early 80's. We should have been using the last decade to achieve energy independence. If we then had a half million of our people risking their lives in the Middle East, at least it would be with a clear purpose.


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