The White House plan to trim the national debt includes selling off half of the nation’s emergency oil stockpile and the entire backup gasoline supply, part of a broad series of changes proposed by President Donald Trump to the federal government’s role in energy markets.
Trump’s first complete budget proposal, released Tuesday, would raise $500 million in fiscal year 2018 -- and as much $16.6 billion over the next decade -- by drawing down the Strategic Petroleum Reserve.
“We think it’s a responsible thing to do," Mick Mulvaney, head of the White House Office of Management and Budget, told reporters. The “risk goes down dramatically when we have increased domestic production like we have today.”
Gosh, how many different ways is this stupid and fiscally irresponsible?
1) You don’t buy high and sell low. Oil/gas prices are at record lows and this reserve was stockpiled when prices were much, much higher. This is Business Econ 101 and you would think a “business man” would know that, but I guess this would explain all of Trump’s bankruptcies.
2) Dumping that much oil on the market will drive down prices which will not make the domestic industry very happy with him.
3) Driving down the cost of oil and gasoline while popular in the short term, will not be very helpful to the environment in the long term (yeah, I know, that’s a feature not a bug).
4) At some point that oil will have to be replaced, probably in a time of “strategic emergency” (hence the name “strategic oil reserve”) at which time we will have to buy it back at anywhere from ten-fold to one hundred-fold what we sold it for.
This is the kind of move that only Trump would think is smart.