Friday, January 27, 2012

Paying for Electrification and Increased Rail Capacity

Creating a parallel non-oil based transportation needs to be built.

It needs to be built for national defense.

It needs to be built for economic growth.

It needs to be built for re-balancing the trade deficit.

How can it be financed?

"Countries facing balance of payment difficulty may apply import restrictions under provisions in the GATT 1994 agreement and under the General Agreement on Trade in Services (GATS)." SEE World Trade Organization website for details :

Alan Drake in "A Citizen's Guide to an Oil Free Economy," notes the following:
"World Trade Organization (WTO) rules allow a nation with a long term structural trade deficit (And the USA certainly qualifies!) to place a unilateral tariff on all "non-essential" imports so long as the proceeds from the tariff are used exclusively to reduce the structural trade deficit and there is no preferential treatment in the application of the tariff."

"Oil imports are a major part of the "long term structural trade deficit" of the United States of America. This plan (electrification) will reduce US oil imports by substantial amounts. Therefore, a substantial fraction of the governmental costs to implement this plan could be financed by a 1% to 2% tariff on a broad range of imports."

"The initial reaction from foreign governments may not be positive, but our diplomats can assure them that this new tariff:

1.) is according to WTO rules. In fact, this is precisely why this exemption exists.

2.) will be effective in reducing US competition for available oil exports, which is very much in the self interest of oil importers and even oil exporters.
3.) will be effective in reducing US carbon emissions, which is in everyone's interest."

And furthermore, it is the only politically possible way that the US will do anything meaningful about either oil consumption or Climate Change. Thus, it is in their enlightened self interest to not object to the US financing part of the program with a broad but small tariff on imports. And, if the tariff is implemented according to WTO rules, they have no other recourse under international law."

See Association for the Study of Peak Oil and Gas - USA, Alan S. Drake:

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