DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
LAWMAKERS CALL FOR A 12-CENT GAS TAX HIKE AS PRICES JUMP AMID IRAQ TURMOIL
GARY K. KALTBAUM: This is the worst possible time for a gas tax hike. A 12-cent tax takes $13 billion out of the economy, meaning the taxpayer not the time. They're going to spend $3.5 trillion this year; there is a government that's double what they did 14 years ago. They have plenty of money to fix the roads; leave us alone.
JONAS MAX FERRIS: It has to keep pace with the cost of improving roads. The money is not going to leave the economy; it's going to go out of your pocket and into the roads that need to be fixed. Nobody wants prices to go up but if you compare it to any time in the last decade, I can't think of any better time because our consumption of fuel is lower and our production is higher domestically.
GARY B. SMITH: The government acts as an inefficiency filter. You give the government the money from this gas tax and it doesn't all go to fix the roads and highways. It goes to build bike-paths; it goes to build the bridge to nowhere. The government treats all taxes as a big slush fund that they can spend as they want.
SASCHA BURNS: The problem isn't that the way it's handled now is inefficient; the problem is that it's really transferring pots of money around from within the taxes that are already taken in. We don't have enough dedicated money to keep up with inflation. So do we legislate by crisis and wait until some bridge collapses or do we figure out some dedicated source of highway funding?
JOHN LAYFIELD: I don't think right now is the right time and the reason is that last year we had the sequester, national parks were closed, and there was a low driving season. It's going to be significantly higher this year if you add in Iraq and the problems that are there. Up to 20 percent of the transportation fund, according to Senator Coburn, is spent on bureaucratic pet projects. So we're wasting that money. Politicians nearly all lie. They want to get re-elected. This money, if it goes into the government coffers, is just going to get lost in the system.
GARY K. KALTBAUM: The potential increase in gas prices with this Iraq crisis is going to depend. We are now hearing that the bad guys are getting one of the big refineries. If that occurs and supplies get constrained, I can promise you that prices will go higher. Iraq has a ton of exported oil, so that would not be good. Every dime counts at this point in time. When can we possibly trust government to do the right thing with the money we do give to them? We were told that $800 billion of the stimulus bill will go towards infrastructure. I don't think a dime went into it.
JONAS MAX FERRIS: Not raising the money means that the roads are not going to get fixed. You're acting like the waste goes away if you starve them. There's never been proof that the government decides they're going to be efficient and stop throwing the money away; they're still going to build a bridge to nowhere. The fact of the matter is the other potholes have to get fixed with the waste equation still there. So we don't really have a choice but to keep up with the road costs and just figure some of the money is going to go into the garbage.
GARY B SMITH: The gas prices are kind of self -limiting. Right now people have a lot of options, especially in the summer when they have a lot more time off. If you were going to take a vacation and drive from D.C. to Carolina for example, you can look at the price as it says $4.25 and decide to just stay around here. The other choice we have, which we didn't have back in the 1970s, is that we can work at home. So we have a lot more choices and that's why when we get over $4.00, people start to pull back.
JOHN LAYFIELD: We lost 1.3 million barrels a day in Libya; it went from 1.5 million to 200,000. That has been taken over by production in North America predominately. You can lose up to 2 million barrels in Iraq, and Saudi Arabia can takeover that extra capacity. Once you start losing above that, North America does help. But you can't cover that shortfall if the ISIS group takes over Baghdad, which is probably around a 50-50 proposition. I think you'll see oil prices go significantly higher.
SASCHA BURNS: There's almost sort of a perverse reaction. The higher the price goes up, the more people make better decisions in terms of not using so much oil.
INTERTNATIONAL MONETARY FUND TO U.S.: RAISE THE MINIMUM WAGE
GARY B. SMITH: It's idiotic. Raising the minimum wage doesn't cure poverty. I know people think when you raise the minimum wage the money comes from those greedy owners and corporations. Their money goes to those workers and then that owner has less money at the end of the year for profit of which he can then build other businesses and hire other people. It's not a winning situation.
JONAS MAX FERRIS: In general, you're going to have higher unemployment when you raise wages. We don't have to listen to the IMF; we are not one of the countries that has to take their advice to get loans to stop crises. So we can ignore them and watch our own state, which has raised it, and see what happens in the next few years.
JOHN LAYFIELD: I think if you create jobs you don't have to worry about minimum wage. States that have fracking don't have to worry about minimum wage. There's no way to compare Tupelo, Mississippi to New York City as far as wages go; that's why states need to do this state by state. The economics of one state do not translate to those of another state.
SASCHA BURNS: In terms of whether we should raise the minimum wage, it's not index to inflation or cost of living. It hasn't gone up since 2009; the value of that $7.25 is down 6 percent. So this idea that there shouldn't be an increase and that you should work for less money every year because it doesn't go up with inflation makes absolutely no sense.
GARY K. KALTBAUM: It is simple. When you mandate higher costs to business owners, they're going to make decisions you're not going to want to hear. That's why the non-partisan CBO said 500,000 jobs would be lost if we raised it above $10. 22 states and D.C. are already above it and additionally, a total of 34 states, i.e. some of the 22, are in legislation right now to raise it. Let them do it on a state-by-state basis, based upon the business atmosphere there. All this mandating only hurts the economy and hurts business.
GARY B. SMITH: Here's the difference between my side and Sascha's: my side uses logic and simple economics the other side uses pure emotion; that's the difference.
REPORT: OBAMACARE SUBSIDIES ON TRACK TO COST BILLIONS THIS YEAR
JOHN LAYFIELD: These are acting like a bunch of petulant schoolchildren blaming everybody that the dog ate their homework. This is not working; time will tell if it does work but right now this is being paid for by subsidies and increased taxes which is exactly the opposite of what they said would happen.
SASCHA BURNS: The reality is all of us have subsidized healthcare. So if you think about the $250 billion that taxpayers spend for the deductions in employer health care and you look at $11 billion, it's nowhere near. So it is not that it's not going to cost anything but who among us is going to say take my subsidy back.
GARY B. SMITH: The bigger issue is that once again we keep having faith that the government can somehow run an efficient program; it can't. Whether its social security, the VA hospital, the interstate highway system, etc., you can argue its successes and failures. Regardless, if the government promises a dollar is going to be spent, you can almost count on $10 being spent.
JONAS MAX FERRIS: Luckily we have a revenue model tied to this which is also going up with the DOW because it has a capital gains component. So fortunately these high costs will be paid for by high tax revenue.
GARK K. KALTBAUM: You cannot charge people for insurance $82 that actually cost $346 and have the government slash the taxpayer, pick it up, and think things are going to end up well. Gary B says 10x, I say 100x. This is just going to blow up over the next few years; look out.
GARY B SMITH: STAY COOL! (UTX) HEATS UP 30 percent BY 2015
JOHN LAYFIELD: PLAYING VIDEO GAMES CAN PAY FOR COLLEGE! (ATVI) SCORES A 15 percent GAIN IN 1 YR
GARY K. KALTBAUM: GOLD IS GETTING BACK ITS LUSTER! (GLD) MINES A 25 percent PROFIT BY 2015
JONAS MAX FERRIS: THERE'S NO MAGIC PILL FOR LOSING WEIGHT! (DKS) SEES A REAL 20 percent PROFIT IN 1 YR