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Is It Time To End Oil Subsidies?

Flickr Photo/Gage Skidmore

While policymakers debate the government’s budget, the Brookings Institute, a private nonprofit research organization, decided to host their own brainstorming session. They asked experts from all different fields to submit ideas for responsible deficit reduction.

One expert, Harvard professor Joseph Aldy, drafted a proposal eliminating oil and gas tax subsidies. A move Aldy estimates would save the US government $41 billion over 10 years.

In 2011, the big five oil companies earned a combined record profit of $137 billion. The price per barrel of oil is at a steady $100. Supporters of Aldy’s proposal say the oil and gas industry doesn’t need our help anymore. Opponents say eliminating tax subsidies could threaten jobs and put our energy security at risk.

Ross Reynolds talks with self proclaimed libertarian economics professor, Steve Horwitz, about the state of subsidies in the US.