Even if the candidates cannot talk about the issues, maybe they can read.
George! Mike! Listen up!Our federal budget deficit can be reduced by $20.5 billion a year. All you have to do is use some plain old Missouri horse sense. Are we getting your attention?
Falling oil prices have given us a great opportunity to raise more cash for the federal government, reduce our trade deficit, support our domestic energy industry, encourage conservation and help develop alternative energy sources. All of this could be done in a single stroke and without the risk of inflation.
Here's how. First, why not tax imported oil at a rate of $8 per barrel? Consider that during the first eight months of this year we imported oil at an annualized rate of almost 2.56 billion barrels per year.
Simple math: Multiply 2.56 billion barrels of imported oil by $8 each and you have $20.5 billion in tax revenues. This is cash that would otherwise likely go to the Saudis or whoever. If we don't collect this money in taxes, it would go abroad anyway and produce nothing except a trade deficit, something that you, Mike, and you too, George, are yelling about.
"Over the past few years, our economy adjusted to paying over $20 or more per barrel of oil," said Robert J. Finley, associate director of the Bureau of Economic Geology at the University of Texas at Austin. "Imported oil now is down to about $12 to $14 per barrel."
Why not continue to pay $20 or $22 per barrel, with the difference being tax dollars to reduce the federal deficit?
When oil prices rise, the tax could stay in place. True, it would increase the cost of our gasoline, but it also would increase incentives for conservation and would reduce our consumption and dependence on foreign oil.
Despite conservation efforts, we have been continually importing more oil. "Based on the first eight months of this year, we are importing 45 percent more oil than in 1983," said Finley.
The naysayers invariably will say that oil taxes will make conditions worse for Mexico, our large neighbor to the south with 70 million poor, restless people.
Falling oil prices are so severely damaging the Mexican economy and destabilizing their political structure that Uncle Sam has just approved a foreign aid package of about $3.5 billion to help improve conditions in that impoverished nation.
We could allow Mexico a $5 per barrel exemption on our proposed oil tax. For the first eight months of 1988, we imported 728,000 barrels of oil a day from Mexico. On an annualized basis, this would allow Mexico to pick up roughly an extra $3.6 billion in 1988 - about the same as our foreign aid package to them. However, it wouldn't be charity and it would recognize Mexico's special status with us as a major trade partner, labor source and friendly neighbor.
In an earlier column, we forecast that oil prices would climb back to $15 to $17 per barrel by the end of June, 1989. Modify that prediction.
The increase may come sooner. Look for Saudi Arabia to reduce its production of oil to boost world prices. It's not that the Saudis, or OPEC, are getting more cooperative, rather the Saudis are concerned about political stability in their own country and the very survival of their royal family.
Word has it that Saudi Arabia is getting very nervous over unrest in Algeria. A sagging economy, wrought by depressed oil prices, has hurt Algeria so much that there are serious riots and threats to the existence of the Algerian government.
The Saudis have two primary interests in Algeria. First, the Saudis and Algerians are mutually strong, supportive allies. Second, the economic unrest finds itself tied to Arab fundamentalism, which the Saudis fear will spread back to their own country.
Reader questions will be answered and may appear in this column, when mailed to Gary S. Meyers at 20 West Hubbard St., Chicago, IL 60610.