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Jan. 11, 2024 - Ron Paul Liberty Report
31:45
Biden's Gas Tax Holiday - Spitting In The Wind?

President Biden is set to announce a temporary suspension of the federal gasoline tax in the face of record gas prices in the US. However, with gas prices around five dollars per gallon, the 18 cents per gallon savings equals about two dollars per tank savings. Is this a band-aid on a gushing wound? Also today, only 11 percent of Americans buy the "Putin price hike" rhetoric. And...Congress expands US economic war on China with new import ban.

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Time Text
Gas Prices and Taxes 00:15:13
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Daniel McAdams, our co-host.
Daniel, good to see you.
Good morning, Dr. Paul.
How are you?
I'm doing well.
Good.
Ready to go to work here and solve the problems of the world.
Your gas tank's full?
But I guard against any disappointments.
You know, I don't have expectations beyond my means.
Sometimes I'm surprised that we do a little bit better than my nervousness causes.
So we still have a few people out there.
We'd like to have a few more people watching and thinking the message was valuable.
But the one thing Leonard Reed taught me, numbers aren't the whole thing.
Eventually numbers are important.
But the main thing is getting a group of people who are really serious and are willing to spread a message.
And that's what we hope we can do.
We can't hope or expect too much more because the problems obviously are quite overwhelming.
But today we're going to deal with an overwhelming problem that we can do something about because we know how it happened.
We know exactly what to do.
And it could be over in a short period of time.
But is it going to happen?
Not according to the news items.
And what I'm talking about is the gasoline prices.
They're high.
And Austrian economics teaches you shouldn't be surprised.
People have been worried about it, just like we worried about a housing bubble.
Well, we worried about the inflation that's came out of the QE since 2008.
And all of a sudden, there are problems.
There's a recession.
And then they go and they start wars against the American people with COVID.
They go and start a war overseas.
And what do they do?
They spend $6 trillion.
Oh, yeah, the world loves us.
So they'll take our money forever.
But now we have a president that's an activist, and he has studied Keynesian economics very thoroughly, which means he can do anything he wants whatever his desires are.
Interventionism.
Even though all the Keynesians don't agree with each other, but they're interventionists where Austrian economics are non-interventionist.
People can make up their own mind on how to spend their money.
So they are always coming up with gimmicks.
Now his gimmick is, there's an election coming up, and lo and behold, one of the most unpopular things is right now people aren't fretting about COVID and they seem to be able to put it out of their mind about what's going on in Ukraine.
But what they're concerned about is something that every household has to deal with.
That is the price of food and the price of gasoline.
And that's a big deal.
And they have to be exposed to that, probably more so than a lot of the crises that come up.
But this one is so necessary because it affects everybody.
But that's the reason that monetary policy is so important, because everything we do, just think the monetary unit is used in, it's one half of every economic transaction.
And that's why it's so important.
But right now, we have prices going up.
Prices going up is said to be by those who want to avoid talking about the Fed, that it's inflation is prices going up.
It's the CPI going up.
People are making too much profit.
Labor costs are too high.
And the Arabs are hurting us with oil prices.
On and on.
And we've listened to it and we've listed the number of things that gets blamed.
But Biden isn't going to sit back because he has to show that he's active.
And every once in a while, we see him on TV, and he is very active.
So he has come up with this wonderful idea.
He's hinted with it.
I think he made an official announcement, but I believe that Congress has to get involved.
Just cut the taxes on energy taxes.
You know, the gasoline tax, the federal government gasoline tax.
But I'm not sure why we have the government doing that anyway.
But anyway, it's going to be popular for a lot of people.
But now, when the dust is settling, they're going to save 18 cents on every gallon.
That used to be what I paid for again.
But they're going to save it on every single gallon of gas.
But the people who have those diesels, they're so much better off.
They get to save 24 cents on every gallon.
And so these are the proposals.
But it isn't going quite as well as the cynics might have predicted because, guess what?
Even Pelosi and Obama has expressed dismay at this.
And they said, this is a little nutty.
So a sense of truth sort of crept in, that this is not going to be an answer.
But nevertheless, they probably will cut it.
And it doesn't make a whole lot of sense.
So you say that, well, this is going to deny money going to the Transportation Trust Fund.
They haven't been able to trust that for a long time.
But if they do that, they reduce, let's say, in theory, they actually go through with this and they cut it, and the consumer saves some money.
I don't think it'll do much good, but it isn't saving any money.
The money is just being shifted.
They can't avoid it because they don't want to talk about two things, the Federal Reserve and spending money.
We spend too much, we print it.
And that is devoid.
There's no indication of that.
But right now, this is the big thing.
And, you know, Powell's talking to the Senate today, and I'm sure that subject will come up.
But they will not have an answer because they don't deal in reality.
And yet, there's a lot of people now actually recognize the fact.
This is hardly a solution.
And it makes no sense, but it's not a surprise.
Price controls, either pushing things up or pushing them down or whatever, always is the temptation, manipulation, but never dealing with the real problem, which is what we've talked about for so long, and that is the monetary unit.
Yeah, let's put up this first clip because this is what we're talking about.
This is Bloomberg, and we first noticed on Zero Hedge.
The president's going to have a little talk today, and he's going to say, here's what we're going to do.
We are going to have a three-month tax holiday on the federal gas tax.
As you point out, Dr. Paul, that's around 18 cents a gallon.
I think it's going to be for three months.
He notices that everybody notices that everybody's irritated at paying so much money at the tank, $5 a gallon record prices across the country.
It may look good, and of course we love tax cuts as much as you can get, but not when they're not accompanied by spending cuts.
And you talk about, well, a lot of people are saying, well, how are we going to pay for the highways?
We're going to have some potholes everywhere.
Well, don't worry.
They'll find a way to print the money.
It's not like that money is coming from gas and going over here.
But as was pointed out, I think in Zero Hedge article, what may look good on paper, and indeed we're not going to say no to it, but that 18 cents a gallon for the average size of gas tank is going to be about $2.16 in savings per fill up of a tank.
And well, I'll take that two bucks in my pocket.
When I take that two bucks to the store with inflation, it's not going to give me any more than I had before then.
So it is kind of a smoke and mirrors kind of thing.
Yeah, and that's a pretty good way to put it because that's about the way they run their monetary policy.
But everybody has a gimmick, and they would like to get something for free.
But this is nothing for free.
You're not getting reduction.
You know, I kept thinking, well, what would I do on this?
Because it's a farce.
It's not cutting anything.
You're not dealing with the real problem.
Yet, I decided that, you know, this is theoretical, of course.
I would vote to cut it, cut the taxes.
And my argument would be, yes, I recognize it won't really be the answer, but it might help cover it up.
And then the real problem is the money is going to be spent because they're not going to cut the money out of something else.
So the government is in worse shape because they've reduced their income.
But I always vote for cutting taxes.
But I always voted to, of course, cut the spending.
So voting for it, which would really be of little value.
The only value I would see under these conditions is to try to make the point of what they're doing and how senseless all this is.
And that turned out to be so often the dilemma I would face, you know, wanting to vote against something that sounded good and try to explain to a lot of people who have been brainwashed with Keynesian interventions economics because they're not going to change their mind.
And I would say 98% of them aren't going to challenge it on the principle of unnecessary and very disruptive government intervention.
And the people who say, you know, this is a smoke and mirrors kind of gimmick, I mean, that idea is boosted because you have the possibility, probability of unintended consequences because what they suggest is this might spur consumption of gasoline, this reduction, spur consumption at a time when there is no production of gasoline.
There's no increased capability to refine oil into gasoline.
And one of the things, in fact, that President Biden is expected to say is to tell the oil companies, hey, you've got to increase supply.
You've got to refine more oil.
And he can put up this next clip because this is from the Zero Hedge article that talks about this is the other part of his tax holiday.
He wants to request that refiners increase capacity.
Remember last year he attacked the oil companies.
Now he's asking them for a favor.
He's calling on the industry to put its record profits to work and step in with more supply and more refining capacity because you are going to see more demand if the prices go down.
But the problem with that, Dr. Paul, again, is that it's not possible.
And the reason we know this is from the oil industry itself.
Let's put up this next clip because we did talk about this last week.
But Mike Wirth, he's the CEO of Chevron, and he said that it can't be fixed.
He said there's not enough refining capacity to meet the demand for gasoline and diesel because no new refinery will ever be built in the U.S. again.
That's important to read and listen to again.
They're not building them and they're not going to build them.
Well, why?
If there's so much money, you know, what is wrong with these people?
Leave it up if you don't mind.
Aren't they capitalists?
What's their problem?
Well, he points it out.
This is his reason why he says they're not going to do it.
You're looking at committing capital 10 years out, but we need decades to offer a return for the shareholders.
And this is in a policy environment where governments around the world are saying we don't want these products to be used in the future.
So the oil companies don't want to spend all these billions of dollars for more refineries because they've been under attack constantly from the U.S. government.
All the green, all the climate people have been attacked saying, your product stinks.
We don't want any more of it.
But we want you to invest billions to make more.
They're not going to do it.
The economic calculations become impossible because, yes, that's the type of planning you need to do in a free market is look for the time it takes and what is supply and demand and make decisions and plan for your capital.
They either have to save the money or they have to know where to borrow it from.
But there's none of that at all because there's no definition for capital because capital is replaced by debt that is stealing capital from the little bit of value that's left in our money.
So it doesn't solve the problem one bit.
It makes it more complex because basically the economic calculation, and you described it so well, it's just so difficult for the oil person.
But then there's an argument, which is it's good that they argue among themselves.
Some will say, well, you should do this, and we have to do this for the environment, and then the oil people have to complain, and there's disagreements.
But eventually they'll have to come up with something.
But I thought of one thing that in the old days it would have been more appropriate, and that is on a temporary basis, not realizing this is the solution.
But it's a good move in the right direction.
Is if overuse is being, you know, the problem, our deficit being the problem, and causing this in use of hydrocarbons, there's too much for the environmentalists.
This cut down tremendously the amount of hydrocarbons being burned by the military.
And sometimes the planes don't fly all day long.
Sometimes a few of them go down.
And yet they do it constantly.
And maybe environmentalists say, yeah, that sounds like a pretty good idea.
But the whole thing there is even the environmentalists aren't necessarily pure on what they say.
They're hypocritical too, like the rest, like the modern day capitalists.
Yeah, we're for free markets when it's for us.
And when we need to be radical environmentalists, we'll do that too.
But the odds of that, see, that could be, I think that would make more sense if we're going to reduce the amount of oil we're going to burn up right away.
And the federal government would do that.
That to make, to me, makes more sense and would be more valuable than 18 cents a gallon and you trying to figure out how you're going to spend it.
Looking forward to spending all that money you're saving.
Well, another funny thing about this whole chapter is how quickly they run, don't walk, away from the green rhetoric when it actually hits the brick wall.
Because look, Europe, Austria just announced it's going back to coal.
Germany said that, and I think the Czech Republic, they're all going back to coal because the prices have gone through the roof.
But the funny thing is that these huge prices are just what the climate change cultists want.
Republicans Blame Putin, Voters Skeptical 00:04:13
They want these huge prices because they want people to not use this stuff.
So when it really hits the wall, though, they have to walk this stuff back.
Oh, go on.
Go ahead.
I was just going to say, yeah, and just put up this next clip because all of the excuses that Biden is putting out for why the economy is in such bad shape, Americans aren't buying it.
And this is a new poll from Rasmussen.
Only 11% believe Biden's narrative that Putin is to blame for record gas prices.
Uh-oh.
Well, this is good stuff, though.
The people are starting to recognize it.
This is better than I would have expected.
But this means, you know, this part of the blame game because basically the blame is Republicans against Democrats and see if they can get any points.
But if the average, if the average person doesn't buy into blame everything on Russia, that's a healthier attitude than some of the other things that they do.
But they politicize it, and I'd like to see the targets being more directed at, you know, flat-out government spending money that they don't have and resorting to all this type of manipulation, including environmental, by the Federal Reserve.
But that's what they have to get over.
But I think this is a good poll.
11% believe it's Putin's fault.
It's rather surprising.
Yeah, it is.
And actually, we have the Ras Newsent.
We have just a clip from this, if we can put this on, because it's not just this.
They don't buy the rhetoric, but they also realize what's going on.
57% of those polled rate Biden poor on the economy, which is another big high for him, viewing that it's poor.
And if we can look, I don't know if we got that next tweet, but here's a tweet they run out of it.
All voters, okay, so the question is, who's to blame for the price hike?
Well, the voters, all voters, 52% say Biden.
Republicans, 80% say Biden.
Democrats, 46% say oil companies.
Independents, 54%, say Biden.
So nobody believes that it's Putin's price hike.
Nobody believes what he's saying, and they're blaming Biden, even his own party, it appears to be.
And this shows why, if you look at this next clip, Dr. Paul, why you see the Biden job approval rating is not looking good, down to 39.6.
That's slightly up from 38.9, which was his old low.
But with all this, Dr. Paul, people not buying this, even his own party not buying this, all this rhetoric, you'd think this would be a bonanza for Republicans, right?
Well, wrong.
In fact, look up this next tweet from our friend Pedro Gonzalez, who's over at Chronicles magazine.
He captures it well.
This just falls into the laps of the Republicans.
And what do the Republicans do?
They fumble the ball.
And here's Pedro.
Over the last month or so, Mitch McConnell declared Ukraine, quote, the most important thing going on in the world right now.
The GOP advanced gun control and now is talking about amnesty.
They hate you, says Pedro Gonzalez, and he's right.
On every one of these issues that are great, great issues for the Republicans to hit back.
They just embrace it even harder.
I keep looking for the people who are blaming the Fed.
I guess they're in this room and our friends.
Well, they were in Reno.
Yeah, that's right.
So.
So this is the whole thing: if we don't get around to recognizing how the Federal Reserve works, this probably couldn't exist.
People don't realize if you didn't have a Fed that legally counterfeited money, all this distortion and lying and wars and war on doctor-patient relationships when there's a virus out there.
Why We Ignore the Fed 00:05:29
All these things are impossible because there would be no money.
And then the people would say, no, if it were voluntarism, I'm not going to donate money for this because I don't even believe in it.
So it's a shame.
But still, compared to a few years back, we heard zero about the Federal Reserve.
Today we're hearing a little bit more and eventually they will hear about it and that's the way it's happened throughout history.
The money changers, the people who did the, promoted this huge inflation, many times it ended up badly for those particular individuals who were identified with the inflation.
Don't worry, Dr. Paul, we have just struck a big blow for human rights worldwide.
Congress has passed and it has been enacted a ban on the import of products from Xinjiang in China.
Put up that next clip if you can.
This is from the South China Morning Post.
Uyghur Forced Labor Protection Act takes effect in U.S., banning imports from Xinjiang.
That means that everyone who's working in Xinjiang will not be working anymore, and that somehow will improve their human rights.
Our good friend Thomas Massey, the only member of Congress with the courage to vote against this sanctions bill, it's a stupid bill, but what it is, and I dug a little bit into it, Dr. Paul, and I think you'll agree with me, this gives the appearance of this great human rights achievement from Congress, but in reality, it's a jobs program for government and a power expansion program for government.
Let's put on this next thing.
This is from the same article.
This is how they're going to enforce it.
That's what it's all about.
U.S. President Joe Biden's administration outlined its enforcement strategy, including how U.S. customs and border protection will identify goods tied to Xinjiang.
What kind of evidence will be admissible?
Da-da-da-da-da-da, for scrutiny.
The U.S. Department of Homeland Security is committed to ending the abhorrent practice of forced labor throughout the globe.
And we thought the Homeland Security Department was to protect our Homeland Security, right?
And here's the next one, and this just tells you exactly what this is all about.
It's about government power, not about human rights.
This is from the article.
And a sign that the administration is already eyeing such assistance from Congress, i.e. money, the U.S. Customs Agency has requested more than $70 million in its 2023 budget to pay for the enforcement of the import ban.
And that's up from a base level of around $10 million.
The expanded funds would pay for 300 new staff positions, training and technologies, et cetera, et cetera.
This is power and jobs program for the federal government.
There you go.
You know, many years ago now, I got on the banking committee early.
I wanted to deal with monetary policy.
And this type of bill came up like 20, 30 years ago.
Everyone was saying, we've got to punish them because they are violating the civil liberties of their citizens.
And I had not had much experience in the legislative process, but then I got a couple minutes and I said, well, you know, this is true.
But where is our responsibility for this and what can we do?
And I would think that my understanding, you know, I'm new here, but my understanding is that we have responsibility for our liberties, but we don't have the responsibility of sorting out problems around the world.
You know, China's a long way off.
And then I cited a couple things that we were doing.
It wasn't hard even back then to find the infractions of civil liberties.
Think of how easy that would be now.
Look at, you know, like the trial for January 6th.
Yeah.
Looking for a violation.
So I said this, and it was a short statement.
And, you know, the amazing thing happened.
It didn't happen much after that because I think I caught them off guard.
And they sort of, with a half of a sentence, acknowledge it.
You have a good point there.
And boom, they went into something else.
But that's the whole thing that they didn't put up the argument, and they really don't have an argument for it.
How can we pretend that we can be the policeman of the world, bring peace and prosperity, never violate, you know, prevent the Chinese or everybody from doing it when we do what we do?
Yeah.
And the responsibility is here at home.
So it's a strong point, but I guess I better keep making it.
Well, we're the first ones who would say that China is far from perfect.
Look how they locked down the country for this virus and destroyed the civil liberties.
Look at their social credit system.
And like we always say, we're adopting all the real bad stuff that they do.
We love that stuff.
Importing it.
Yeah, we're importing it.
But, you know, people should really look into a lot of the special interests behind these claims about the Uyghurs and what's going on there because it's not as cut and dried as people would like to think.
There are some very powerful special interests that are pushing this narrative.
And like all narratives, it deserves very close scrutiny, which it doesn't get because they turn it into an emotional issue.
Oh, you doubt what we say about it?
That means you love slavery, when in fact it's not necessarily true.
Cracks in the Seams 00:06:48
It deserves a lot more scrutiny that's being given it.
You know, do you have anything else on that?
Because I want to talk a little bit about what Powell's doing today at the committee.
And I described it, you know, the markets are on pins and needles all the time because the Federal Reserve Board chairman is going to speak.
And everybody knows what he's going to say.
It's going to be, you know, a lot of malarkey because he doesn't have answers and they don't admit the problem.
So what can you expect?
But anyway, he probably still out there at that conference answering these questions.
But Larry Summers, you know, he's a famous person that has some controversial things in his lifetime, but he was also Secretary of Treasury, an important figure, and they quote him a lot on Wall Street and the financial markets.
And he's not happy with, you know, that Biden is doing the right thing.
So he's doing some criticism.
So this comes from Summers.
He says, we need five years of unemployment above 5%.
He said 6% on one of his statements to contain inflation.
In other words, we need two years of 7.5% unemployment or five years at 6% unemployment or one year of 10% employment.
That's democracy, isn't it?
Let's vote on this.
And I got to thinking, isn't that just so typical?
It proves they don't have the vaguest idea what they're doing.
What is the proper thing?
The only thing that something suggests here that could leak in by accident is when it gets down to one year at 10% unemployment.
Now that should never be policy.
Like inflation should never be policy.
We need to inflate and destroy the money at 2% rate.
And they're still looking for the 2%.
But this one year at 10%, that might fit the Depression of 1921 because it was total hands-off.
It wasn't the government, the government was naive and said, well, let's have a depression, depression, this will close it.
It's that they believed that there was a market cleansing operation when people overdid it and too much inflation and that the correction would come.
And that depression was just a little over a year and it was really sharp.
It might have even been worse than that.
And right now, they live still with, I remember the 70s because they said, well, it looks like the theory of the Phillips curve isn't working.
You have inflation, you have lower unemployment rate.
They were having inflation and lower unemployment rate.
didn't help.
So there's supposed to be a trade-off.
They're still arguing this thing.
Inflation historically has an inverse relationship with unemployment, meaning when inflation is high, unemployment is typically low.
And they still work on this.
So the whole notion that you, you know, the markets turn down and things happen, but to say that's policy and that's what you have to do.
You know, if you were doing the right thing and people anticipated you were going to do the right thing, you're not going to have the psychological damage, you know, the anticipation, you know, what would happen.
But anyway, right now they're still citing the same garbage.
And they back then, I can remember so clearly when they started coining the word stagflation.
You know, stagflation was new.
What is this stagflation?
Well, that's, you know, inflationary recession or an inflationary depression.
And I don't know why they stick to this because look at the countries in the world right now that have runaway inflation.
Boy, they probably have very high employment rate.
No, they have very high unemployment rate, and that didn't produce jobs.
That's why I think the economic theory and the policies are so important.
I don't think, I just like it because he's needling them a little bit, but they still aren't talking about the subject I want to talk about.
Well, I'd just thank our viewers.
We asked yesterday if you please hit like and please send the show around.
We did get a little bit of a bump.
You know, this is the summer doldrums.
We call it the cucumber season, the dog days of summer, whatever you want to call it.
But we do want to have those numbers up.
It gives us the strength and energy to try to continue every day.
So if you are watching this, please just hit like.
It's cost-free.
It only takes about a split second to do, and it'll help us hopefully get raised up a little bit so more people will see the show and maybe click on the show, get in some of those recommendations at YouTube, because they wouldn't be suppressing us.
I know they wouldn't do such a thing.
But thank you for watching the show, and we hope you'll continue to watch as we try to cover events from a different perspective.
Very good.
I'm going to close by just making the point, and we alluded to it today: is that there are cracks in the seams.
The Democratic Party, the progressives, the wildey liberals are not monolithic.
Daniel made the point about the environmental arguments.
When push comes to shove, all of a sudden they're not so dedicated to this idealism, especially when people start to get hungry.
So there's a dissension there because their views are wrong.
But that doesn't mean that we automatically pick up the pieces and that people say, well, they're wrong and they're not making sense.
And look at what they've given us.
So we have to now look for a better understanding.
Not brand new, but something that's been around but can be refined.
A lot of people would ask me over the years, yeah, Ron, you just want to go back to the gold standard.
And my answer is, no, that isn't the case.
You know, we've had a gold standard.
It was far from perfect.
It was imperfect.
And it broke down many times.
So there's a lot of reason.
What I want is to move toward the principles of liberty and let people decide what they want to do and not to let the government make these decisions.
A society based on voluntarism, whether it's in money or social orders, religious orders, sexual orders, voluntarism is a wonderful thing because that eliminates aggression and violence in solving our problems.
And it's been available to us.
We've had periods in our history, especially in our early history, where we basically understood that and things did go pretty well.
But right now, we do need a new emphasis on the principles of liberty because that will provide the answers to the problems we face today.
I want to thank everybody for tuning in today to the Liberty Report.
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