With soaring oil prices, causing transportation costs for goods to skyrocket, as well as forcing food directly to be higher priced (oil is used in fertilizer and other means of increasing crop yields), food is indirectly being forced higher in price. Billions before our era of food crisis and oil crisis did go hungry, and millions did starve annually, but now it is growing even worse. Although I don't need to seriously worry, my latest trip to the supermarket resulted in a price of $250 for seven bags of groceries (soup, pasta noodles, sauces, frozen pizzas, etc). Who else here is suffering from either the price of oil or food?

I believe in the economic theories of Keynes, and I think it's time government began getting involved. Obviously it is paramount for governments in specific countries being affected to take measures first, but here in America, things will keep getting bad unless someone does something about this situation. I therefore feel the government should do something drastic: set prices for two sectors of goods; oil, and basic food items. The price of oil is hurting everyone, and the money for oil goes straight to mostly foreigners. I know no one who is having to forgo food for fuel. I know a close friend who worries because they have to choose between fuel and food for the next week before they get their paycheck.

Minimum wage is not counteracting this increase in prices, which it should. Obviously prices need to be regulated.

Now, as for basic food items, I mean things like butter, clean water in those gallon plastic jugs, bread, cheaper "meat" items like chicken, and soup (which can be very nutritious and low in production costs), amongst many others. Obviously food like frozen California Pizza Kitchen, cake, pastry, cookies, steak, crab, etc, shouldn't be touched. But I do think easing prices will help the middle and lower classes. It will let them keep money which they can use to spend on other things, not just on oil companies. An economy cannot survive when only a sector or two receives most of the flow of money, and a society cannot survive when food and fuel prices are allowed to soar beyond the ability to pay for them.

Or we can just let everyone skip meals and go poor. How about that?

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We're on the side of the demons. We're evil men in the gardens of paradise, sent by the forces of death to spread devastation and destruction wherever we go.

If you want to interfere with a market that isn't the way to do it.

In particular oil. We can't set a price. We can give a price, and they can say no, we'll just lower production for a while if you don't want to buy it. Or maybe sell to China.

Now we're a big enough buyer to affect prices somewhat, but we're already trying to do that.

Now food we mostly produce domestically. So you could set prices they can sell at here and abroad so their choices are just quit or sell at the given price. But if the price is lower than what people are willing to pay either you get.

1. Some varient on the scalper
2. Rapid scale back of production
3. rampant shortages

Now there are some product where this might not be the case. But food isn't one of them.

If you want to alleviate the problem either

Offer subsidies to the companies you want to support, give more money to the buyers, or have the government pay some of the difference(or pull taxes as McCain proposes for gas).

We are then in utter disagreement.

Of course we can. It's called pricing.

We live in desperate times. Food and oil riots are occurring across the world. Americans are suffering, too. Waiting for OPEC to stop being greedy and driving up oil prices for no reason at all will take too long and too much stolen money.

It would be suicide for businesses to stop being in business. They would no longer make money.

We make enough food to justify lower prices. We also have enough oil to justify lower prices.

Subsidies are meant to help businesses about to collapse economically. Why give oil companies MORE money? They're already bending us over.

Giving money to buyers doesn't solve the fact prices will keep soaring.

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We're on the side of the demons. We're evil men in the gardens of paradise, sent by the forces of death to spread devastation and destruction wherever we go.

Setting prices is likely to lead to future economic disaster unless it is very, very temporary (which the current fuel prices may not be).
It could ultimately lead to a lower supply of fuel.

I'd actually rather see a floor placed on gas prices to avoid overoptimism and overconsumption...

The better solution in Keynsian style is to cut taxes on the lower income brackets, effectively putting more income in the hands of the poor. Perhaps some sort of subsidy or rebate can be given during a certain time to cover the gas costs.
But that has the problem of keeping demand high.
Ideally we should be shooting for a way to decrease demand... so subsidies for energy-efficient technologies in vehicles would be a bigger part of the plan.
And in addition we should focus on improved infrastructure, including public transportation. Currently public transportation in many areas is deficient and interstate, national public transport is the laugh of the world here.

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"Man lives in the sunlit world of that which he believes to be reality. But unseen by most is an underworld, a place that is just as real... but not as brightly lit... A DARK SIDE!"
-opening from Tales From the Darkside

You MUST be joking???

Government CREATED this fiasco, first by limiting drilling of our own oil, then by diverting almost a fourth of America's Corn supply to Ethanol and even now by refusing to lift Moratoriums on Shale to Oil, Coal Gasification and Offshore Drilling.

So let me get this straight, now that Government has CREATED these problems with regulations in Oil and Food, you now want Government to fix this by FURTHER regulating the Economy?!?!?!?
Is it just me or has the world gone insane!

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http://www.nosocialism.com
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America is not a Socialist country, this is why the only democrats who ever win, are democrats who SOUND like Republicans (Hello Bill Clinton - Low taxes, Free Trade, Welfare Reform, Era of Big Government Over - Sounds Republican).

Notice this proposal is an idea for the current crisis. If pricing helps and we can go back to sustainable food prices without government intervention, there's no need for pricing.

I completely disagree with you. How do you propose cutting taxes on the lower classes? You could cut income taxes for people with specific incomes, but how do you cut sales tax for someone who is poor? You can't do this in all definitions of the concept "practicality". Also, if you think pricing basic food items carefully will lead to lower supply, I should remind you of two things: before the rise in food costs, we had no real problems. We can easily return to a slightly lower overall cost of basic food items; second, cutting taxes is no different than changing prices according to your logic, because both would cause disaster and give people too much spare income.

Of course we should research better fuel and fuel technology. That will take time, and by then, millions of Americans would be up (*)(*)(*)(*) creek; already many Americans are.

I agree that public transportation needs to be improved. I think public transportation is a good alternative to private transportation (assuming public transportation becomes cleaner, more efficient, and more safe).

You don't need to capitalize, use bold, underline, and act like a moron grammatically. I can read just fine, and so can everyone else.

I didn't create these problems. I'm proposing solutions for these problems. We can either do something, anything that is immediate (and of course something that is more long-term), or we can let our fellow citizens go hungry and go into serious debt paying for fuel and food and basic necessities of life.

Lest I remind everyone, the government had nothing to do with OPEC's and oil companies' current price sharking. I believe the government should avoid getting heavily involved in the economy until desperate times call for desperate measures. I support drilling in regions of the US with plenty of oil. However, it is stupid to think that will solve our problems. That oil will be drilled by the same companies screwing us in the ass. They will not reduce prices. OPEC and all the oil companies are not following the rules of supply and demand; oil production increases but prices go up. There is no oil shortage.

Unless you can show me those organizations will suddenly become fair players on their own and stop going for extreme profits at the expense of the entire world, including the well-being of humanity, I will not change my opinion these companies and organizations have no intention of reducing prices on their own.

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We're on the side of the demons. We're evil men in the gardens of paradise, sent by the forces of death to spread devastation and destruction wherever we go.

I do have one question, Number, that's a bit off-topic...
On another thread you claimed the influence of Lavay, Nietsche, and Hobbes...

I'm just curious how those philosophers lend themselves to helping out the poor...
Serious question. I'm not trying to attack your beliefs.
I just always took those three to be about the least humanistic philosophers of all time and possibly scornful of taking care of the weak (but probably not as much so as Ayn Rand).
Is there something I'm missing in them... or is this line of thought independent of their philosophies?

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"Man lives in the sunlit world of that which he believes to be reality. But unseen by most is an underworld, a place that is just as real... but not as brightly lit... A DARK SIDE!"
-opening from Tales From the Darkside

I will start with this:
http://www.econlib.org/library/Enc/OPEC.html

Contrary to what many noneconomists believe, the 1973 price increase was not caused by the oil "embargo" (refusal to sell) directed at the United States and the Netherlands that year by the Arab members of OPEC. Instead, OPEC reduced its production of crude oil, thus raising world oil prices substantially. The embargo against the United States and the Netherlands had no effect whatever: both nations were able to obtain oil at the same prices as all other nations. The failure of this selective embargo was predictable. Oil is a fungible commodity that can easily be resold among buyers. Therefore, sellers who try to deny oil to buyer A will find other buyers purchasing more oil, some of which will be resold by them to buyer A.

Nor, as is commonly believed, was OPEC the cause of oil shortages and gasoline lines in the United States. Instead, the shortages were caused by price and allocation controls on crude oil and refined products, originally imposed in 1971 by President Nixon as part of the Economic Stabilization Program. By preventing prices from rising sufficiently, the price controls stimulated desired consumption above the quantities available at the legal maximum prices. Shortages were the inevitable result. Countries that avoided price controls, such as West Germany and Switzerland, also avoided shortages, queues, and the other perverse effects of the controls.

This next:
http://en.wikipedia.org/wiki/Price_ceiling

A price ceiling is a government-imposed limit on how high a price can be charged on a product. For a price ceiling to be effective, it must differ from the free market price. In the graph at right, the supply and demand curves intersect to determine the free-market quantity and price.

A price ceiling can be set above or below the free-market equilibrium price. In the graph at right, the dashed line represents a price ceiling set above the free-market price, called a non-binding price ceiling. In this case, the ceiling has no practical effect. The government has mandated a maximum price, but the market price is established well below that.

In contrast, the solid green line is a price ceiling set below the free-market price, called a binding price-ceiling. In this case, the price ceiling has a measurable impact on the market.

A price ceiling set below the free-market price has several effects. Suppliers find they can no longer charge what they had been charging for their products. As a result, some suppliers drop out of the market. This represents a reduction in the quantity supplied. Meanwhile, demanders find that they can now buy the same product at a lower price. As a result quantity demanded increases.

As a result of these two actions, quantity demanded exceeds quantity supplied and a shortage emerges. This leads to various forms of non-price competition.



Raising minimum wage has the same effect as you beloved price controls. It increases unemployment and the number of people who can't make any money to pay for necessities.

You say that "a society cannot survive when food and fuel prices are allowed to soar beyond the ability to pay for them" yet you ignore the fact that an economy cannot survive without the ability to produce those goods such as food and fuel that people depend on. Trying to control the price will simply make it uneconomical to produce those goods, people will stop trying to produce them, and people will have to go without them. Imagine if we simply didn't have the food to feed the people. Is it better that people have to spend slightly more to pay for food and perhaps have to work harder and longer, or is it better to control the price and simply not have the food to feed those people no matter how hard they work?

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"Seek truth from facts"

--Deng Xiaoping

OPEC only has that control when it operates as a near monopoly. When they raise their own prices, they can still sell a lot of oil because they control a large portion of the production market.



However, the effect is limited, they cannot simply keep driving prices higher. When they do that, they make it economical for other countries with oil to produce more of their own domestic oil. This is the best solution for the US at the current time.

When a business can no longer make money from price controls, they have to go out of business to stop from losing money. It's better to make no money than to lose money.

The amount of food and oil produced is what sets the price. Lowering the price artificially causes that amount to go down as people no longer have the incentive to produce it.

__________________

"Seek truth from facts"

--Deng Xiaoping

That is a very be if, and the answer to the question is no. Unless you have an economic argument, then I would stop trying to talk about economic problems if I were you.

Cutting taxes is physically possible, if you didn't know. All you have to do is stop taking their money.

The cost of producing food is going up due to the increase in the price of fuel, along with the demand for food going up to due to increased population and increased demand for bio-fuels (caused by the increase in the price of fuel as well). Because the demand side of the price equation is going (the increase that you talk about on the supply side from increased cost of production is very minor), the solution to let the market increase production. Already people are devoting more land to food crops; it's happening here in America, it's happening in Brazil, it's happening practically in my backyard (corn and watermelons under the telephone poles through the woods) and in my region (wheat, grown in many ), it's happening anywhere where food is grown. The increase in supply will quickly meet the increase in demand and prices will stabilize, though they may be slightly higher in total value due to the increase in production costs in food.

Cutting taxes would cause: a decrease in the cost of production (if taxes on the producer are cut), an increase in consumers ability to pay (when cut on the consumer).

Implementing a restrictive price ceiling would cause: major shortages in the amount of food produced, causing widespread starvation.

This is almost like pretending that America hasn't researched solar power, hydro power, tidal power, wind power, nuclear power, hydrogen gas as a fuel, bio-mass power, and other forms of renewable energy. These forms of energy are just physically more expensive than oil.

Your solution would force people to go hungry and wouldn't give them the option of going into debt to pay for food.

The oil companies don't control price, that would be what we call a monopoly. If they tried to control prices, then they would be undercut in the market and would be forced to reduce those prices due to the increase in competition.

I recommend my first link below called Domestic Drilling: beyond supply, demand, and the price of gas where I have gone into a very detailed analysis of domestic drilling, and what you are saying here is partially true.

Other companies get into the business, they then have an incentive to undercut the other companies by selling at the market price. They make a killing while the other companies lose money due to a decrease in consumption of their companies' more expensive product. To keep making a profit, they have to reduce their prices to the market level.

__________________

"Seek truth from facts"

--Deng Xiaoping