The $128 Trillion Rip-Off
by Virgil 20 Jan 2014, 10:10 AM PDT
The biggest theft in world history is occurring right here, right now—literally, right under our feet. It’s a theft of wealth that measures in the 15-digits—wealth that’s being taken away from its rightful owners, the American people, and being sacrificed, in effect, to the Green Gods of Austerity and Sacrifice.
The exact size of the loot? It totals $128 trillion in recoverable oil and natural gas, according to the Washington, D.C.-based Institute for Energy Research (IER). To put that $128 trillion sum in perspective, we could use a mere 13 percent of it to pay off the entire US national debt. Indeed, that $128 trillion is almost 35 times greater than federal expenditures for fiscal year 2014, and more than seven times the annual US GDP.
We might note that IER’s $128 trillion estimate includes only oil and gas; no one has any real idea how much more wealth—in the form of coal, rare earth elements, and who knows what else—is to be found in the the 28 percent of land in the US that’s owned by federal government.
At present, there’s no plan whatsoever to do anything to utilize this wealth as the Obama administration is seeking ever-tighter federal regulations, and, beyond the Keystone Pipeline, Republicans hardly ever raise the issue.
In fact, the IER study was released more than a year ago, and nobody seems to have noticed. Since then, we’ve had endless negotiations over some sort of “grand bargain” to raise taxes and cut earned senior entitlements—and in the meantime, we’ve been ignoring the grandest bargain of all: abundance.
Seems more than a little ridiculous, doesn’t it? That is, for the U.S. to be scraping along, fiscally and economically, while leaving fallow such gargantuan natural resources?
Moreover, to get at this wealth, we don’t need to drill in Yosemite or other National Parks; we simply need to access the vast federal lands on and offshore in the "Lower 48," Alaska, and the many overseas U.S. territories in the Caribbean and the Pacific.
So how did this wealth freeze-out happen? How did so much treasure get locked up and unused? Here’s how: in the early 19th century, the federal government sold off or gave away most of its lands in the east. Then, in 1862, came the first of a series of Homestead Acts, which led to the glorious privatization of much of the Midwest. Yet the mostly arid lands west of the Mississippi were generally not seen as viable property for homesteading, and so Uncle Sam continued to hold title. Then the environmentalists came along and realized that they could gain de facto control of more than a quarter of US territory. Congress repealed the Homestead Act in 1976, and after that, the environmentalists happily proceeded with their no-growth plans.
However, the Green land-grabbing did provoke a pro-growth backlash in the West, the so-called “Sagebrush Rebellion,” dedicated to opposing enviro-liberalism. The Sagebrush Rebels helped Ronald Reagan carry every Western state, save Hawaii, in the 1980 presidential election; the hope was that Reagan would open the West to development. Unfortunately, their point man in Washington, Interior Secretary James G. Watt, turned out to be bit of a kook with a nasty sense of humor; he was forced out of office in 1983, and that was the end of the Sagebrushers as a force.
In the decades since, Green Democrats, joined by more than a few Green Republicans, have banned drilling everywhere they could. The bans on offshore drilling are a nice perk for rich people who treasure their ocean views, but it’s not so great for everyone else who needs money or a job.
Meanwhile, other countries have charged ahead. Norway, for example, eagerly drills in the waters outside of its scenic fjords; that’s why the Norwegian Sovereign Wealth Fund is worth $783 billion—not bad for a country of just five million people. When the oil is gone, the oil wells will be gone, and Norway will still be rich because of all that money in the bank.
So in the spirit of Norway, what could the US do with its God-given wealth? With its $128 trillion? The first thing we could do is eliminate any thought of tax increases. After that, we could have a round of tax cuts—after all, $128 trillion works out to more than $403,000 per person in the US—and then we could think about spending money to cure disease, build new infrastructure, establish missile defense, maybe even go to Mars. And we’d still have plenty of money for a rainy day.
Would the Greens resist such big new resource production? You bet they would. They’d fight it to the last trust-fund liberal. But the prospect of $128 trillion in wealth and growth makes it worthwhile for the rest of us to take up this fight.
Indeed, we might further note that a 15-digit number would be way more than enough to pay for a cool way to sequester carbon, such as turning CO2 into plastic or building material. And once the US mastered such sequestration technology, we could share it with the world, which would make us heroes to most of those worried about climate change—although, of course, the hardcore Malthusians would hate the sequestration process all the more if it actually helped poor people.
Yet such Green opposition is, as they say, a feature, not a bug. That is a plus, not a minus. How so? Because conservatives and libertarians need an issue that binds them politically to job-hungry Middle America.
If the pro-growth forces got into a bidding war with the anti-growth forces, the right could make an opening bid of $128 trillion. That is, $128 trillion to rebuild the lives and life-prospects of recession-ripped Americans.
Try as they might, there aren’t enough liberal trust-funders in the world to top such a bid.
Indeed, once the American people figure out how rich they are—and how the Greens have conspired to cloak that wealth and keep them poor—there will be genuine hell to pay.