Bush Says US Must Kick Oil Habit By REUTERS, Feb. 1, 2006

"America is addicted to oil, which is often imported from unstable parts of the world," Bush said. "The best way to break this addiction is through technology."

But Bush Doesn't Know How to Use the Market !
"Technology" is not even half an answer. The problem of oil addiction is not an individual problem. As Bush acknowledged, "America is addicted to oil, which is often imported from unstable parts of the world." Now that's a problem for America, but you can't expect people to volunteer to cut back. We will have to take a stand as a nation, just as we do on other major issues.

Bush's proposal: about $9 billion extra per year, compared with $300 billion+ per year for fossil imports and $100 billion per year for Iraq. It doesn't add up. Worse, he's got the wrong technology: corn ethanol and hydrogen will bankrupt us before they make a dent in fossil imports.

That's where the market comes in. The only way to get low-cost effective change is to move some money around and let the market find the cheapest response. There are a couple of ways to do this: (1) a tax-and-return program on oil, and (2) financial incentive for auto makers. A Tax/Return program taxes a product but then returns all the tax revenue to the consumers. But everyone gets the same return. Someone who uses twice the average amount of foreign fossil will find they pay twice the average tax, but only get back the average. Someone who conserves will get back more than they pay in tax.

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