GM Govt. Bailout?

[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.