Mr. Pino @DominicJPino as his very very short bio states is the Thomas L. Rhodes Fellow at National Review Institute, and a Graduate of George Mason University. I guess that means we should be impressed. Pino is just a younger member of the “Never Trump” TDS mentality that consumed the once great National Review.
Now I am sure Mr. Pino @DominicJPino is a nice guy, and he is well educated, but he is still an inside the bubble idiot. Let’s Fisk his article.
No, Trump, the U.S. Can’t Pay Down the National Debt with Oil
This repeated claim from the GOP front-runner demonstrates the total unseriousness of today’s fiscal conversation.
It is not unserious and Oil and Gas are the key to everything. They always have been, and always will be. The price of Gas controls the American economy, as well as the economy of the world.
Joe Biden has overseen massive government spending and some of the largest annual deficits in U.S. history. Had Senators Joe Manchin and Kyrsten Sinema voted as Biden wanted on the Build Back Better Act, the spending would be trillions greater. To run against him, the Republican Party appears ready to renominate Donald Trump, who, as president, signed off on $8.4 trillion in new debt and apparently thinks he can pay it down with oil.
First off he does say “signed off” on Debt rather than created, I’ll give him credit there. What very few ever explain to the Public is unless the President does so by “Executive Action” the President really has no control over the economy. The part of Government that effects the economy is the Congress, nothing else. Congress creates the budget, Congress spends the money it doesn’t have. The President for the majority has nothing to do with it, unless they do something by executive order like freeze drilling, cancel pipelines, and cancel the upcoming boom in fuel exports while opening Russia’s ability to fill that market instead.
Trump said in his Iowa victory speech, “We’re going to drill. We’re going to use that money to lower your taxes even further. We gave you the biggest tax cut in history, and we’re going to lower them further. And we’re also going to pay off national debt.”
First of all, lowering taxes, even if desirable for other reasons, would contribute to increasing the debt if not offset with spending cuts. So Trump’s own promises are already working at cross purposes.
Ahh the common idiocy of an “Economist”, at least what has become a common idiocy. Lowering taxes has never in history done anything except increase the revenue that the government takes in with taxes. Look it up. Lower taxes increases revenue the public spends and invests, creating more tax intake at the lower rate than came in under the higher rate. It is a fact that is ignored by the press even when they are “Rhodes Fellow”. If Congress can be controlled, which it has proven it can’t, a basic cut in the growth of spending would lower our Debt from the increased revenue.
But the larger idea — that proceeds from energy production will pay off the national debt — is pure nonsense. Many of the things Trump says are difficult to take seriously, but given that he is increasingly likely to be the Republican nominee, and he has said this line repeatedly, it’s worth illustrating that this is simply a Trumpian version of the fiscal delusion that both parties are now committed to.
This is a fun level of derangement, economically, along with a severe case of TDS. (Trump Derangement Syndrome) Mr. Pino can’t refrain from insulting President Trump. It is the delusion of not just Mr. Pino, but all the National Review Staff that Trump as President was anything but a success. Can Mr. Pino point out anything that Trump said he was going to do, and then did that wasn’t a success? Mr. Pino and the rest of the intelligentsia at NR have been nothing but naysayers against all things Trump. I will address what he calls a “fiscal delusion that both parties are now committed to.”
In a conversation with Sean Hannity on Fox News last June, Trump described oil as “liquid gold,” a phrase he has used elsewhere, and suggested that the value of oil in the ground is enough to do all sorts of things, including pay off the debt.
And the President is correct. The U.S. has the world largest supply of Oil. The entire world runs on Oil, that will not change. Oil is more valuable than Gold, or any other commodity. The U.S. Dollar has been based on the fact that Oil was only traded in Dollars everywhere in the world. We were the world’s base currency for that reason. This is another thing that Biden has set on the path of destruction.
Let’s count the ways in which this makes no sense:
- The national debt is $34 trillion. That’s about $8 trillion greater than the entire GDP of the United States. There’s no way it’s getting paid off. Unless of course we increase the GDP which drilling will do on every level of our economy.
- Total U.S. proved reserves of crude oil were 41 billion barrels in 2021. The average price of a barrel of oil in 2023 was $78. Even if the U.S. somehow pumped all those reserves at once, sold all of them at double the average price of a barrel of oil in 2023, and gave all the money directly to the Treasury, it would only raise $6.4 trillion. The view of static supply and idiocy. Oil is only called a “fossil fuel” because Rockefeller said it was so he could define and control the cost of a barrel of Oil. Oil is the 2nd most prevalent liquid on the planet. It is only surpassed by water. Like water it is created naturally by the planet. “Proved Reserves” is an accounting gimmick.
- Let’s assume, for charity’s sake, that Trump meant the deficit, not the debt. The deficit last year was $2 trillion. The U.S. produced about 4.5 billion barrels of crude oil last year. At $78 per barrel, that comes out to total U.S. oil production valued at about $350 billion — not even close to covering the deficit. Once again Mr. Pino looks at the supply as limited, a single pie. It should instead be viewed as a bakery, waiting to make more pies.
- Trump talked about how Saudi Arabia is wealthy because of oil. Total Saudi government revenue in 2023 was $318 billion. Over a third of that was from non-oil sources. And Saudi Arabia ran a budget deficit last year. As an economist Mr. Pino should know that just like the U.S., Saudi Arabia’s economy is based on the fact of it’s vast oil supply and wealth from that supply that allowed it to develop other industries. Without the Oil it would just be a desert inhabited by Bedouins.
- The revenues of the five largest U.S. oil companies (ExxonMobil, Chevron, Marathon, Valero, and Phillips 66) in 2023 totaled about $1 trillion. So even if there was a way for the federal government to confiscate all of that revenue, it still wouldn’t pay for half of the deficit last year. As an economist Mr. Pino’s grasp of how Capitalism works is extremely limited, more likely this point is here to just bolster the rest of the idiocy he is selling.
- The U.S. energy sector, unlike the energy sectors of Saudi Arabia and many other countries, is dominated by private companies. Their profits belong to them, not the government. They pay taxes on their profits like other companies, but Trump (correctly) cut corporate taxes while in office. It must have broken Mr. Pino’s heart to have to even give President Trump a left handed compliment. This statement also shines more light on this idiots grasp of real capitalism. It is the corporations spending of those profits that generates revenue for the government by taxing the expenditure. Revenue from buying new machinery, revenue from the development of new streams of revenue, revenue from the taxes on the workers newly employed by the investments and purchases. It is the movement and exchange of revenue that is taxed. Confiscation causes collapse. Examples of this throughout history are there for all to see.
- Using oil companies as cash cows is usually something Democrats want to do. Joe Biden’s most recent budget proposed several new taxes on fossil-fuel producers. Even so, those taxes were only projected to raise $97 billion over ten years. President Trump never proposed using them as “cash cows”. President Trump stated the truth. It is the Oil and Gas that will be the fuel of Americas growth. Exactly as it did at the turn of the 1800s into 1900’s. It fueled the birth of a Giant, the U.S. 20th Century Industrial age.
- U.S. oil production in 2023 was at an all-time high. Trump and the other Republican candidates blame Biden for reducing oil production, but that has not happened. (There are plenty of other, more legitimate criticisms of Biden’s energy policies.) Perhaps oil production would be even higher without Biden’s policies, and tangling up new projects in lengthy environmental reviews definitely doesn’t help. But oil is traded on a global market in which the U.S. is a major but by no means determinative player. Oil companies base production decisions primarily on global market conditions, not on who the president is. Is this denialism, ignorance, or idiocy? Mr. Pino does not seam to, or chooses not to see the damage that President Biden has done. Under President Trump for the first time in our nations history the U.S. became Energy Independent. Not just Independent, the U.S. was to begin for the first time Exporting Oil. Replacing the Middle East and all other nations and regions as the worlds number one supplier of both Oil and LNG. President Biden stopped that his first day in office, destroying the U.S. economy putting us at a rate of over 17% inflation.
This is all sort of a joke for Trump, but the fiscal mess the next president will face is not. The U.S. is headed towards a $5 trillion fiscal cliff at the end of 2025. Yet neither party is taking the problem seriously. Trump’s repeated promise to pay off the national debt with oil is only one example of this bipartisan trend. The Joke is you Mr. Pino, and it’s a sad one.
DOMINIC PINO is the Thomas L. Rhodes Fellow at National Review Institute. and an idiot with TDS.
In summation:
Mr. Pino is a good example of many of the things wrong with the intelligentsia. He is definitely a posterchild for the continued descent into irrelevancy of the National Review. A once great institution that has descended into just another inside the beltway circle jerk.
Oil is the worlds lifeblood, without it man could survive, but only as an agrarian species. Everything in our lives depends on Oil, there is no replacement for it. Everything around you is a byproduct of oil. The nation that controls the flow of oil controls the world.
“Drill baby drill” restarts the American Industrial Engine, our exporting of Oil/Gas will give Europe an alternative to purchasing fuel from either Russia which Trump had blocked, or our slimy friends in the Middle East. It will provide the power and growth to bring our industry back home from the foreign nations our career politicians and intelligentsia have pushed them into. It will also most importantly relieve the financial stress that has been placed upon the American Citizen of an over 17% inflation rate that the doubling of the price of fuel by the Biden Administration has caused.
Drill baby drill, will lower the deficit, and allow increased payment on Washington’s Debt.
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