Jay Leno told the following joke on the Tonight Show (paraphrasing):  Encyclopedia Britannica is no longer going to be publishing a print edition.  I read that on Wikipedia.

A lot of times, we find humor in things that are true.  In the above joke, it is a business that has failed to keep up with technology that is going to be replaced.  But I often like to examine the effects that technology has on government.  It is said by some that no new government program ever dies.  But I think technology is changing that.

The Post Office is a good example.  It is one of the few government programs that is permitted by the Constitution.  But this doesn’t mean that government is efficient at running a mail service anymore than it is good at running anything else.  The Post Office is running massive losses each year.  They have a government-granted monopoly on first-class mail.  When I say that the Post Office has competition, most people automatically think Federal Express or UPS.

But it is really technology that is the biggest competition for the Post Office.  Its monopoly is not doing it much good.  It can’t even raise prices substantially without incurring more losses.  People are using email, Skype, text messaging, Twitter, Facebook, cell phones, Facetime, and other ways to communicate.  It doesn’t have to be through cards and letters.  This will also take down the phone services that gain monopolies in local areas to provide landline services.  They face too much competition from cell phones and other technologies.

The Post Office is also facing competition from websites like Amazon.  If you want to mail a birthday gift to someone, instead of buying it and sending it through the mail, you can buy it on Amazon and have it shipped through Amazon.  Amazon can even gift wrap it for you.  It will probably get to a point where Amazon has its own delivery service because so many packages are being sent.  It would not surprise me to start seeing Amazon planes and delivery trucks.

While the Post Office is still taking our tax money, it is quickly becoming irrelevant.  There will come a day when it comes apart completely.  It is a slow dying government program.

My hope is that we start to see more technological breakthroughs in healthcare.  It is difficult because of all of the government regulations in healthcare.  But if technology can increase in healthcare at just 10% of the speed as it is increasing in the computer industry, then we will see great progress.  We may get to a point where all of this healthcare regulation is virtually meaningless.  If you can just take a vitamin to cure yourself of diseases or if you can just step into a machine for a minute to relieve pain without side effects, then eventually health insurance will become meaningless.  You won’t need insurance if everything is cheap and available.

Technology is increasing in the computer and communication industries faster than most realize.  Processing speed is getting faster exponentially.  Chip sizes are getting smaller and storage space is becoming exponentially cheaper.  Where 3 or 4 percent growth in an economy is considered decent, the computer industry is growing at probably 50% per year, with compounding growth.

It is impossible to know what this world will look like in 20 years.  It is a race between big government and technology.  While big government will make life hard in the short term, I think technology will eventually win the race.  Government will slowly become irrelevant and most of it will die off.

If someone asks me my political persuasion, I generally say I am libertarian.  Of course, being a libertarian can mean different things to different people.  Being libertarian means that you are pro-liberty.  For some, this means being a minarchist, which means they want limited government that protects against force and fraud and enforces contracts.  There are anarchists too, who believe in no government.  There are also people who call themselves libertarians, but who go way beyond the minarchist in terms of wanting government.  They may want smaller government, but that is not saying much in today’s world.

If we lived in a society that the minarchists want, we would be exponentially better off.  We would have a free market, with the government involved in only a few things like the court system, policing, and military defense.  The closer we can get to that point, the better off we are.

Anarchists, or anarcho-capitalists so as not to confuse them, believe in a society of liberty, with the complete absence of government.  While I think this is a good ideal, I think it is hard to sell people on.  Most people want government, even if it isn’t often good for them.

This is where panarchy comes in.  Michael Rozeff has written extensively on the subject.  It basically means that you should be free to choose your own government, regardless of where you live.  This should be clear in America.  There are red people (Republicans), blue people (Democrats), and others.  We all live with each other.  We interact with each other and do business together.  We may even live together in the same house.  Yet there is this major disagreement hanging over everyone’s heads.

We should be free to choose our own government.  I would take it a step further and say that people should be free to choose no government at all, so long as they are not infringing upon anyone else.

I am not sure how many anarcho-capitalists would agree with this.  I like the principled stand that anarchists take.  Most use a strong moral argument.  They use the non-aggression axiom.  They do not believe in the initiation of force for political or social purposes (I stole most of that from the LP pledge).

There is an interesting interview/ conversation between Peter Schiff and Stefan Molyneux.  It is funny because Schiff, as he says at the beginning, is forced to take the position of defending government.  While both of these guys are really bright, I found them not being on the same page a few times during their discussion.  Schiff was talking about the government not outlawing private security firms, but he seemed to miss the point that people are forced to pay for the government “security”.

Schiff says he wouldn’t put people in jail for not paying taxes (as what happened to his father).  But how could this be a tax then?  If you aren’t going to threaten to put people in jail, then it would have to be a voluntary donation.  You can fine a person for not paying taxes, you can order them to court, or do a number of other things, but if you aren’t willing to go and arrest the person, then all of the those actions are meaningless.  It is only the threat of force that makes something a tax.

In the discussion, I like when Molyneux said that if you want to get rid of slavery, you don’t argue for less slavery.  You argue for no slavery at all.  You win the argument by presenting the moral case.

I have seen different people convinced of liberty in different ways.  But I believe we need to use the moral argument often.  Libertarians hold the moral high ground.  It is those people who promote war and government welfare who want to use violence.  We must point out that virtually every government action involves the use of force or the threat of force.

As I have said before, I would have nothing against Obamacare if it didn’t force others to participate.  If a bunch of Obama supporters want to get together and have their own socialized healthcare plan, that is fine with me, as long as you don’t use the threat of violence against others who don’t want to participate. The same goes for all other government programs.  You can have your own government, or whatever you want to call it, so long as you are not forcing others to join you.

If someone is advocating a particular government program, you don’t even have to debate them on the merits of it.  You can simply ask if they will permit you to disagree without using violence against you.  If they agree, then point out that you should not be forced to participate then.  If that is the case, then the law they are advocating should only be voluntary.  You, or anyone else, should not be forced to participate in it or pay for it.

Use the moral argument.  It will frustrate people, but if something clicks inside their head, they will view things a different way.

I am an advocate of setting up a permanent portfolio, as described in Harry Browne’s book Fail Safe Investing.  However, I understand that some people want to speculate.  While this should make up a minority of your portfolio, I want to offer a couple of suggestions for speculation right now.

With the Dow above 13,000 again, it is likely that we are in the midst of a Fed-induced mini-boom.  While much of the growth is illusory due to the Fed’s loose monetary policy and artificially low interest rates, it would not surprise me to see stocks continue to do well.  However, if this is the case, then I would expect price inflation to kick in more.  The scenario that would surprise me the most would be a continuation of higher stock prices with lower price inflation and lower gold prices.

Gold has been somewhat volatile, but it has been in a relatively narrow range for the last couple of months. Oil has been volatile and seems to keep going higher, with periodic backtracking in the price.

However, gold and oil stocks have been awful in comparison to gold and oil itself.  For some reason, gold and oil/ energy stocks have really suffered.  If you invested in them this time last year, you are probably down.

If the stock market keeps going up, I would expect that gold and oil stocks will catch fire at some point, especially if the commodity prices are rising.  It is a good time to buy low.

There is, of course, a chance that things could turn quickly and the stock market could go tumbling down.  While I think it is less likely in the near future at this point, it might be good to hedge your bets a little.  For every 2 to 3 dollars that you invest in gold and oil stocks, you can put one dollar into an ETF that bets against the stock market.  If you go into a double inverse fund like DXD or SDS, then you will want to invest only one dollar for every 4 to 6 dollars in oil and gold stocks.

There are two mutual funds through Fidelity that you can use to invest in oil and gold stocks.  The gold stock mutual fund is FSAGX.  The oil/ energy stock mutual fund is FSESX.  Both of these funds are down quite significantly over the last year, which makes them a potential bargain right now.

Remember that these are speculation plays.  They are risky.  If you want to be conservative with your money, then put it all in the permanent portfolio setup.  While there is no guarantee with that either, it is the safest thing I know of at this time.

Obama has announced plans for stronger oversight of oil futures markets and is proposing an increase in funding for regulators.

So that has been the problem this whole time.  There hasn’t been enough government oversight of the financial markets.  Of course that must be the reason for high oil prices (please not sarcasm).

Obama has decided to continue being a demagogue.  If he isn’t a demagogue, then he is just plain stupid.  Perhaps he is both.

Obama said, “We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage and driving prices higher, only to flip the oil for a quick profit.”  He also said, “We can’t afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick.”

What is his bigger bureaucracy of regulators going to do?  Are they going to prevent the futures market from working?

It is time for a good economic lesson here, something that Obama and his henchmen wouldn’t understand.  Speculators play a vital role in the marketplace.  They provide more accurate pricing and they actually smooth out bumps in pricing.

Let’s say that speculators think that there will be an increase in demand for oil in the near future.  Or perhaps they think there will be a war in Iran or some other event that will cause a shortage of oil.  Either way, let’s say that speculators think the price of oil will be going up in the near future.  In this case, the oil speculators will buy futures contracts that drive up the price of oil.

But the increase in the price of oil is a signal to the market.  It tells consumers to cut back on their usage. It also sends signals to suppliers.  If the suppliers think that prices will be much higher in the near future, then they may hold back on selling right now.  Or they may decide to extract oil from more expensive places.  With the higher price of oil, it may be worth it to extract more oil using more expensive procedures.

By raising the price of oil now, the speculators are doing others a favor.  They are signaling consumers to cut back now and they are signaling suppliers to increase their supplies for later.  If the speculators hadn’t been there to bid the prices up, then the oil prices would have been that much higher in the near future.  Instead, the speculators actually prevented a big spike in prices.  The process was more gradual and less severe because of the speculators.

If the speculators didn’t exist, then everyone would be guessing, almost constantly.  You could end up with a situation where the price all of a sudden doubles or triples in the matter of days.  The speculators make this less likely to happen.

Of course, some speculators could be wrong about their guess for the future.  But they will lose money if they bet the wrong way.  Those who guess correctly are the ones who are rewarded.  And they should be rewarded, because they are the ones sending correct signals to the market.  They are preventing less shortages in the future.  They are helping to properly allocate resources.

Obama does not understand free market economics.  If he does, he is a total liar.  Either way, he is demagoguing the situation.  Oil is going up for other reasons that he is partially responsible for.  Oil prices are higher than they would otherwise be because of threats to Iran, government regulation, and monetary inflation (which is encouraged by government debt).  If Obama wants to help lower oil prices, he should resign.  He should ask Bernanke to do the same.

The other day, I discussed loaning free money to the government via too much tax withholding.  I briefly mentioned the poor and said that while they don’t pay federal income taxes, they most certainly do pay taxes.

First, while I use the term “poor” for the purposes of this writing, a more accurate term would actually be “low income”.  The income tax does not tax wealth.  It taxes income.  But we can make an assumption that at least most people who are really poor, also have a low income.

I hear many so-called conservatives who like to point out that the poor do not pay taxes.  This is not correct, when stated like that.  Most poor people do not pay any regular income taxes, but they most certainly do pay taxes.

What really amuses me is when I hear supposed conservatives say that everyone should “contribute” something.  They want to raise taxes on the lower income people.  These people are statists.  If the income tax is unfair, it is only because it exists.  When Ron Paul is asked about only half of American taxpayers paying any income tax, his response is that we are halfway there.  He doesn’t want to raise taxes on anyone; he wants to cut them.

While most poor Americans do not pay any federal income taxes, they do pay many other taxes.  There are payroll taxes, which are paid by anyone working “on the books”.  There is also the employer portion, which is an indirect tax.  There are corporate taxes, which make shareholders poorer, prices higher for consumers (including the poor), and wages lower for workers (including the poor).  There are many different sales taxes and excise taxes and fees.  There are taxes on gasoline, on hotels, on cars, on phone bills, on water bills, on electric bills, etc.  There are car registration fees.  There are property taxes, which are paid indirectly by renters through higher prices.  The list could go on and on.

Most of these taxes actually fall disproportionately on the poor.  If there is a one dollar tax on something or if the price of a loaf of bread goes up a few cents because of a tax, then it hurts the poor person the most, who is already struggling to make it.

The worst “tax” of all is monetary inflation.  It creates business cycles, it redistributes wealth (usually from the poor and middle class to those with political connections), it discourages savings and investment, it changes people’s time horizon, and it is all done in a hidden way.  Most poor people don’t realize how much they are being screwed by inflation.  They don’t understand that prices are going up solely because of monetary inflation.

Again, when the price of milk goes up 25 cents, it is the poor person who is hurt the most.  Their income won’t rise because of inflation until later, if they are lucky.  They are already paying the higher prices by the time they see any rise in earnings.

Inflation is the worst tax of all.  It can ruin a society.  America had huge income tax rates in several decades of the early and mid 20th century.  The highest rate was over 90% at times.  And Americans were supposedly in a Cold War against communism?  90% or more sounds communist enough to me.

Yet, despite the high income tax rates, times were not always too bad.  Society can survive this.  The 1950’s were a relatively prosperous time, considering the high rates.  The key is that monetary inflation was relatively low.  In the 1970’s, income tax rates were a bit lower, although still high.  But because of the high monetary inflation, it was a tough time, economically speaking.

Today is a tough time because of massive government and massive money creation.  It is wreaking havoc on the economy.  Monetary inflation is hurting us every day.  We need to end the Fed by removing its monopoly on money.  That is one sure way to help the poor.

There are tens of millions of Americans who loan money to the government every year.  I’m not talking about people buying government bonds.  I’m talking about people who have extra income taxes withheld throughout the year and then receive a big refund after filing their taxes.  With the main part of tax filing season coming to an end, now is a good time to discuss the topic.

Believe it or not, I actually have mixed opinions on this.  I understand the point made by those who say that you shouldn’t loan the government any money at zero percent interest, but I think there are also arguments to be made the other way.

First, if you live in a state with a state income tax, I would be very careful not to overpay too much on your taxes throughout the year.  This is especially true for states that have major fiscal problems, which is many. There have been states, California being one example, in the last few years, that have delayed refunds to taxpayers because of the budget crunches created by politicians spending recklessly.  If I lived in a state like that, I would be sure to not overpay on state taxes.

As for federal taxes, I don’t think there is much of a threat of having your refund delayed.  It may take over a month if you file now during the busy time.  But the federal government does not face the same constraints as the state governments (unfortunately).  The government in DC can issue more debt and can get the Fed to buy that debt if needed.  The federal government is not going to delay tax refunds for several months because then people will lower their withholding and it will just cause more of a temporary shortage of money for the government.

I can understand why many Americans overpay on their taxes during the year.  Some reasons are good and others are not as good.  If you don’t have a salaried job and your income is not steady, I can see why you might overpay.  The same goes for people who have substantial taxable investments.  They may not know how much they are going to end up making.  People in this situation may want to be conservative and overpay on their taxes, just to make sure that they don’t end up owing a large sum when they file their taxes.

The majority of Americans who overpay on their taxes do so because they don’t want to have to write a check when filing.  From this point of view, it is actually a good reason.  It is tough to budget and you want to make sure that you don’t have an extra unexpected (or even expected) bill.

But many Americans overpay by thousands of dollars and receive huge refunds after filing.  They do this just so that they can have a big windfall, even though it is just money coming back to them that they already paid.  They are basically using the tax system as a forced savings plan.

While I would prefer that Americans simply have the discipline to save their own money, I am not sure that giving an interest free loan to the government matters all that much right now.  If you save your money in your checking, or even savings, account, then it is there, tempting you to spend it.  Meanwhile, even if you have it in a savings account, a couple of thousand dollars won’t earn enough interest for you to buy lunch.

If we lived in the 1970’s where we had double digit interest rates, I would have a stronger opinion that people should not be significantly overpaying on their taxes.

Of course, there are many Americans who will not pay any federal income tax (but please don’t say they don’t pay taxes, because they pay many of the other taxes out there).  Some people may even get refundable tax credits where they not only don’t pay any income taxes, but they actually receive a check after having not paid anything.  These people don’t have to worry about giving a loan to the government because they are getting money that is being redistributed anyway.  They are not getting back money that they already paid in, at least from that pool of taxes collected.

In conclusion, I don’t think it is that big of a deal if you give the government an interest free loan, unless you live in a state that is having financial difficulties.  You should teach yourself to save on your own though.  If we hit a situation where we have double digit price inflation and double digit interest rates, then I will have a stronger opinion about not handing over a free loan to the government.

The Tax Foundation puts out a report each year reporting “Tax Freedom Day”.  It is the day of the year that the average American taxpayer works to pay his share of federal, state, and local taxes.  The tax freedom day this year is listed as April 17, 2012 (not including the Leap Day).

I find this number hard to believe.  In fairness to the Tax Foundation, its article does say that, “If the federal government raised taxes enough to close the budget deficit – an additional $1.014 trillion – Tax Freedom Day would come on May 14 instead of April 17.”

While I believe the May 14 date would seem more accurate, it still seems understated to me, and I am not even accounting for government regulations that take away more of our time and effort in our lives.

If we are going to measure a tax freedom day, it should not be done based on just regular taxes.  It should be done based on total government spending.  If government runs a deficit (federal, state, or local), then it is still basically spending taxpayer money, unless you expect it to default on its bonds.  In the case of the federal government, government debt could be (and is) bought up by the Federal Reserve, but then your money is simply being devalued.  In the case of Fed monetary inflation, it might be more accurate to say that dollar holders are paying.  While this would include most American taxpayers, it would also include foreigners who hold U.S. dollars.

So a more accurate measure for a Tax Freedom Day is to use spending.  Using spending, the federal government spends close to 25% of the GDP alone.  The federal budget is about $3.8 trillion.  The annual GDP is approximately $15.3 trillion.  While these numbers may not be perfect, the federal government spends about one quarter of GDP.

The Tax Foundation article lists state and local taxes at $1.42 trillion.  That means they are saying that state and local taxes make up less than 10% of GDP.  I find this quite hard to believe.  I am not sure where they are obtaining this number, but my guess is that it is a lot higher.  If anyone has any sources for a total of state and local spending in the U.S., feel free to leave a link in the comments section.

With the federal government spending about 25% of our income, that would put Tax Freedom Day at about April 1 right there.  I think a more accurate date would be in June for the total.  Prior to the recession hitting in 2008, it would not surprise me if total spending was over 50%, which would put Tax Freedom Day in July.

Regardless, this does illustrate the absurdity.  Government is taking almost half of our money.  This is why so many mothers work and do not have much of a choice to stay home with their kids.  It is why so many Americans struggle to pay their everyday expenses.  Government spending is out of control.  Americans must withdraw their consent to government.  Americans must stop relying on the government.  Americans must realize that their lives will be much better off with a dramatically smaller government.

Whether people want to admit it or not, government education is a form of welfare.  Most people think of welfare as going to poor people, such as food stamps.  But there are all kinds of welfare.  Social Security and Medicare are forms of welfare.  Corporate bailouts are welfare, mostly for the rich.  Wars and the military industrial complex involves welfare.

Of course, everyone in America could be accused of being on some kind of welfare.  We all get some kind of “benefit” from the government.  We have to drive on government roads.  With education, you don’t have much of a choice in having taxes taken away from you, although you do have the choice of not sending your kids to government schools.

I don’t fault anyone for collecting Social Security.  They had to pay taxes previously and are still paying taxes in other ways.  You may as well get back some of your money that is being confiscated.  The same goes for education.  I don’t fault anyone for using the government school system, at least as far as getting some of your money back.  If you are to be blamed at all for sending your kids to government schools, it is only because of the brainwashing and lack of actual education that your child is receiving.

Aside from whether it is a good decision to send your kids to government schools and whether you can even afford it, that is not the real issue here.  The real issue is this: are you an advocate of having government run schools?

I don’t see hypocrisy for being against government schools, yet using them because you are forced to pay for them.  I do see hypocrisy for those who criticize government welfare to a large degree, yet they are advocates of the public (government) school system.

Why is it any worse to be on food stamps than it is to use the taxpayer funded school system?  If anything, food is more of a need than education for your kids.  Without food, you can’t survive.  This is not an argument for food stamps from either a practical side or a moral side.  The point is, both food stamps and government schools are a form of welfare.

Of course, if we didn’t have to pay property taxes, then it would be easier to afford to pay for schooling for kids.  The same could also be said for someone on food stamps.  Despite what we hear, poor people do pay taxes.  They may not pay regular income taxes, but they pay payroll taxes, sales taxes, property taxes (often indirectly), corporate taxes (also indirectly), excise taxes, etc.  The poor also pay heavily for the worst tax there is.  It is the hidden tax of inflation.

There is absolutely no reason that the government should be funding education.  It should not be happening at the federal level.  But it should also not be happening at state and local levels.  People who have children should pay for their own daycare or schooling, or else they should find someone who voluntarily will.  We don’t hold a gun to someone’s head to make them pay other expenses for parents.  If the government is going to take people’s money to pay for schooling, why not clothing, food, furniture, and family vacations?

If education were left to the free market, we would see innovation and cost cutting.  Schools would get cheaper and the learning methods would get better.  Until then, let’s call government schooling what it really is: a form of welfare.

There continues to be a tug-of-war between a mini inflationary boom and a recession and/ or depression.  The stock market has been quite strong in the last couple of years after tanking in late 2008 and early 2009.  With the Fed’s aggressive monetary policy since that time and with massive government spending, it was bound to create more asset bubbles.  It is always a question of which assets will boom the most.

Of course, if we are in a mini inflationary boom, it is mostly an illusion.  Real growth is based on savings, capital investment, and technological innovations.  While there might be a little of that, most of the boom is illusory, caused by a loose monetary policy and massive government spending.

The last few days have been bad for the stock market.  The Dow has retreated well below 13,000.  It will be interesting to see where it goes from here.  The 10-year yield has dropped back below 2%, meaning that either the Fed is buying more government debt or investors are running to perceived safety.  Of course, U.S. government bonds are only safe as long as people still perceive them as safe or as long as the Fed keeps buying and pushing down rates.

It really does seem to be a struggle between inflation and recession right now.  This doesn’t mean that we can’t have both at the same time.  The Keynesians were proven wrong in the 1970’s when there was high price inflation and high unemployment at the same time.  With that said, I think one or the other will be more dominant.  In the last 6 months, I was leaning more towards a mini inflationary boom (artificial) before we saw another recession.

Americans understand right now that something is not right with the economy.  In fact, the pessimism has helped keep prices in check as more people try to save more and spend a little less.

What Americans don’t understand (or at least not many) is that there are going to be some hard times in the near future no matter what.  Even if Ron Paul were elected president and the Congress turned libertarian overnight, there would still be some pain.  A drastic cut in government spending and regulations would probably cause a recession, but that would be the best case scenario, as the recession would likely be over quickly.

On the current path, we are headed for much worse.  While government spending, regulation, and debt are major problems, that is not the worst of it.  It also isn’t the massive unfunded liabilities.  The major problem for the short-term economy is all of the past monetary inflation that was used by the Fed to prop things up.  It has not allowed for the previous malinvestment to correct and it has made things far worse by misallocating resources on a grander scale.

We actually need a recession to correct all of the previous malinvestment.  We need a realignment of resources that coincide with actual consumer demand.  Until that happens, the economy will not be on a solid footing.  We will have to continue to endure these roller coaster ups and downs.

Let’s see where the stock market goes from here.  If it continues to go down, we may be headed back into recession.  Then we will have to fear more monetary inflation by the Fed.  If the stock market bounces back up, then it is more likely that we will continue in an illusory boom period.  Either way, we will eventually see a major bust.

There was an article on LewRockwell.com today about peak oil.  The author of the piece gives some history on the subject and the lack of accuracy by those who have warned about peak oil in the past.  He also gives some statistics about oil production and oil reserves that seem to refute the peak oil proponents.

I can’t confirm or dispute the numbers.  I don’t really have any criticisms of the article, but I do want to add some comments about the subject.

While I found the article interesting, in the long run, it doesn’t matter all that much whether peak oil is real or not.  It doesn’t matter all that much how many barrels of oil are being produced or how much is in reserve or how much has yet to be discovered or how much demand there will be in the future.

The thing that matters most is that governments get out of the way and stay out of the way.  The oil market is already heavily regulated.  Governments tax oil and gas.  Governments regulate oil drilling and refineries.  Governments own land with oil, almost everywhere it exists.  I could go on for pages about different ways that governments interfere in the energy markets.

Most things done by the government restrict the supply.  Most Republicans think that the U.S. government should drill in ANWR and other places.  The problem is that it shouldn’t be up to the government.  The U.S. government should either return the land to its proper owners or else sell it to the highest bidder.  Then the owner or owners of the land could drill.

It would also help if the U.S. stopped running an empire around the world.  Whether the motives involve control of oil or not, bombing Iraq and Libya, and threatening to bomb Iran, does not help the situation.  It causes disruptions in supply or fear of disruptions.

As long as we live in a relatively free market system, then peak oil does not matter much.  If the world really is running out of oil, then prices will go up to reflect the situation.  They will go up in anticipation. Higher prices will encourage people to cut back on demand.  It will also encourage an increase in supply.  Higher prices are the best solution to high prices.

If there is concern about peak oil by the market and prices go up, then the market will turn to other alternatives.  Perhaps the oil in tar sands will be extracted.  This is a more expensive process, but it may be worth it if the price is high enough.  Also, the market will most likely respond with other technologies.  Maybe electric cars are viable, but they shouldn’t need to be subsidized by the government.  If gas gets expensive enough, then consumers will voluntarily switch to other forms of energy if they find it is worth it.

There is one thing I may disagree with on the article regarding peak oil.  The author states, “for at least the next hundred years, oil will remain our primary energy source because it is abundant, inexpensive, and reliable.”  While he may turn out to be right, it is impossible to know right now.  If the government gets out of the way and stays out of the way, there are endless possibilities for providing energy in the future.  There may be things that don’t exist right now that we can’t even fathom.  How many people could have fathomed the internet and text messaging 50 years ago?

In conclusion, don’t worry about peak oil.  Instead, worry about the government interfering with the free market.  If the market is left free, then peak oil will not be a problem, if it even exists.