I need honest answers for this question...

So, I'm doing my normal morning routine... reading the articles and news of the day as I drink my standard pot-o-coffee breakfast while waiting for Liz and the 7-year-old to roll out of bed after a late Saturday night of fun and excitement at our friend's party... and I come across an article from Pulitzer-prize winning columnist Thomas Friedman of the NY Times.

I'm not a fan of Friedman, by any stretch of the imagination. He is far too liberal in his views for my tastes, so I can only imagine what Ryan must think of him. None the less, living as I do in the Northeast US (or at least in the Atlantic States), the man has a following here in PA that is undeniable and many of my friends here are huge fans, indeed.

His latest editorial was about the failings of the Tea Party, and how he would fix them, if he were so inclined. It is this thought that prompted my post.

He suggests a $10 per barrel tax on all imported crude oil into the US, and that the revenue from this tax be used to pay down the national debt and decrease our dependence on foreign energy sources.

Now, like anyone else that calls themselves "conservative", I automatically begin to dismiss the idea as just another "tax and spend" plan by liberals to generate revenue for a Government that is already far too intrusive and expensive for its own good. When I took a break from my reading and went to the porch to have another cup-o-joe and a "gurt" (that's a cigarette, for those that don't know Mr. C. Joe White), I pondered the thought some more.

The US imports 11 million barrels of crude oil every single day. The math here is relatively simple: 11 million barrels times $10 comes to $110 million per day, or just over $40.1 billion dollars every year. That is a LOT of revenue, isn't it? Staggering, in fact.

Now, we all know who pays this sort of tax: the consumer. We know that the ratio of crude oil prices to gasoline prices is pretty nearly .035 per barrel of crude cost, so at yesterday's national average for oil prices of $81 per barrel, we see a gasoline average of $2.86. Raising the price of crude to $91 dollars takes the price of gas to $3.18 or so. That's high, no question... far more than I want to pay at the pump. But let's consider for a moment more...

With the increased price of gasoline in the past, we have seen a contraction in the national economy... but it has never NOT been strictly temporary and quickly adjusted for, relatively speaking. Furthermore, with increased gas prices, we have typically seen a reduction in crude oil demands in the US (also temporary in nature, but measurable).

If this oil tariff were to become reality (and a tariff it would be), two important factor would come into play that we have NOT seen with past increases in gasoline prices: increased demand for domestic sources of oil and increased viability of such sources as profitable resources. When the global price of a barrel of crude alone dictated the cost of domestic production, it couldn't compete with what the rest of the world was selling oil for... domestic production wasn't instantly profitable, thus it wasn't a course oil companies were willing to follow. Who can blame them for not wanting to throw away money on the very real chance that global crude prices would fall of their own accord before the first NEW domestic well pumped its first barrel of oil? With an artificially inflated oil price, coupled with vast new sources of instantly-available revenue, real progress could be made to substantially increase our domestic energy production.

I would also propose that by implementing such a tariff, we would lower our demand for foreign oil, initially because of the higher price, but in a more long term sense through the reduced need of supplemental sources outside of our own production. This shortage in global demand would require that foreign sources reduce their price per barrel to maintain current or projected revenue levels, which eases the burden (relatively speaking) on the American consumer.

Now, given what I have said here, I need to clarify something: I am NOT advocating a new tax simply for the purpose of giving the Feds more dollars to spend. However, imagine what could happen if this tariff-generated revenue were bound by law to be applied ONLY to increasing our own domestic ability to produce energy AND/OR reducing the Federal deficit. That is a cool $40 BILLION every single year that is going exclusively towards solid, long-term investment in America's future ability to remain economically sound and safe no matter what the global environment dictates. By my estimations, even with what Obama has already carved into stone here in the US, we would see a balanced budget (obviously depending on how much we spent on domestic energy production year-to-year) well before the end of THIS decade.

This is a purely intellectual exercise, I understand. Our current administration would never allow that much revenue to be that limited in how it can be spent, although it would JUMP at the chance to implement that kind of revenue-generating tax, I'm sure. My question is simply this:

What are the down-sides to a tariff such as the one I describe above, given that all my requirements are met (limiting spending to energy production/deficit relief, etc.)? Are the short-term costs in increased consumer costs (say a 10% increase in the average cost of gasoline) enough to negate the long-term benefits? Have I missed something in my musings that makes the whole idea worthless? Is this the sort of tariff/tax that a conservative agenda can support, given that it will reduce the need for future tax costs by reducing the deficit and/or limiting our risk of foreign pricing impacting our economy negatively?

I am really looking for input here... please don't dismiss this out-of-hand.