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Balance the Budget with Energy Taxes
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Sun Feb 17, 2008 8:48 pm    Post subject: Balance the Budget with Energy Taxes Reply with quote

Balance the budget with taxes on gasoline and imported oil.

Raise them to whatever level is necessary to do it.
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Kuros



Joined: 27 Apr 2004

PostPosted: Mon Feb 18, 2008 6:03 pm    Post subject: Re: Balance the Budget with Energy Taxes Reply with quote

Joo Rip Gwa Rhhee wrote:
Balance the budget with taxes on gasoline and imported oil.

Raise them to whatever level is necessary to do it.


I have a proposal. We should pass a bill demanding that funds for the war in Iraq be levied in only one manner: at the gas pump.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Mon Feb 18, 2008 6:13 pm    Post subject: Reply with quote

Quote:
October 5, 2003
The Real Patriot Act
By THOMAS L. FRIEDMAN
This is a column about the war of ideas -- but first a word about gasoline prices and Hummers.

In case you missed it, OPEC just decided to slash its oil production to keep gasoline prices high. I guess it would be foolhardy to expect that maybe Saudi Arabia or Kuwait would use its influence in OPEC to hold down prices at a time when Western economies are struggling to climb out of recession. Everybody's just looking out for themselves. So why don't we?

There's all sorts of talk now about how to finance the $87 billion price tag for the reconstruction of Iraq. I say, let's make OPEC pay -- indirectly. Let's have a $1 a gallon gasoline tax and call it the ''Patriot Tax.'' We could use the revenue it would raise -- about $110 billion a year -- to finance the entire reconstruction of Iraq, with plenty left for other good works.

Here's the logic: The two things OPEC hates most are falling oil prices and gasoline taxes -- and the Patriot Tax would promote both. The reason that OPEC hates gasoline taxes is that if anyone is going to benefit from higher prices at the pump, OPEC wants it to be OPEC, not the consuming countries. It drives OPEC crazy that the Europeans pay roughly twice as much per gallon as Americans do, because their governments slap on so many taxes.

A $1 a gallon gasoline tax, phased in, would not only be a huge revenue generator (even with tax rebates to ease the burden on low-income people, farmers and truckers) but also a huge driver of conservation and reduced oil imports. Not only would it mean less money for Saudi Arabia to transfer to Wahhabi clerics to spread their intolerant brand of Islam around the world, but it would radically improve America's standing in Europe, where we are resented for being the world's energy hog.

President Bush could even say that this tax is his long-promised alternative to Kyoto, because the amount of energy conservation it would produce would result in a much greater reduction in U.S. energy consumption, and greenhouse gas emissions, than anything Kyoto would have mandated.

In short, a tax that finances the democratization of Iraq, takes money away from those who would use it to spread ideas harmful to us, weakens OPEC, makes us more energy independent, reduces the deficit and overnight improves the world's view of us -- from selfish, Hummer-driving louts to good global citizens -- would be the real patriot act. (It would also encourage Iraq not to become another oil-dependent state, but to build a middle class by learning to tap its people's entrepreneurship and creativity, not just its oil wells.)

''Until we raise energy prices we really aren't fighting the war on terrorism, because we're doing nothing to deny the countries who fund terrorists the cash they need to destroy us,'' says Philip K. Verleger Jr., the energy expert. ''We could use the excess revenues to fund a true Manhattan Project to cut U.S. oil consumption in half by 2007, thereby permanently making OPEC irrelevant. That would be a truly patriotic move.''

Yes, yes -- I know, the Bush team would never even consider such a tax. But that's my point. When you have an administration that will not even consider undertaking the most obviously right course -- a gasoline tax -- that would produce so many strategic, economic and political benefits for America, then how do we win this war in the long run? Because this war on terrorism is not simply a military fight. That's the easy part. More important, it is a war of ideas. And to win a war of ideas we need to do two things:

First, we need to successfully partner with Iraqis to create a free, open and progressive model in the heart of the Arab-Muslim world to promote the ideas of tolerance, pluralism and democratization. But second, and just as important, we need to set an example ourselves, in order to get others -- both potential allies and longtime adversaries -- to buy into our war, to believe that we are not just out to benefit ourselves or protect ourselves, but that we really are out to repair the world.

Unfortunately, this president -- for ideological reasons, because of whom he is beholden to economically, and because he knows that the American people never demanded this war, so he cannot demand much from them -- will not summon Americans to set that example. He will not summon us to be the best global citizens we can be. The Bush war cry is: ''Do as we say, not as we do. Good ideas for Iraqis, gluttony for Americans.''

That is so wrong. We may not get a better Iraq out of this war, but let's at least make sure we get a better America.


http://query.nytimes.com/gst/fullpage.html?res=9F06E5D8153CF936A35753C1A9659C8B63&sec=&spon=&pagewanted=print
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Mon Feb 18, 2008 6:30 pm    Post subject: Reply with quote

Instead of a subsidy for US oil companies why not tax imported oil.

By the way if you are not going to tax imported oil then the oil companies ought to keep getting subsidies.

By the way

If you don�t tax imported oil AND you don�t give subsidies to oil companies they will just look for oil in the Mideast where it is easy to find and to get instead of the US.


So eliminating subsidies for oil companies by itself is not a good idea.

If Hilllary and Obama really know what they are talking about they won't just advoctate eliminating subsidies for oil companies.

They seem to think that the oil companies are a bigger enemy than mideast regimes.

The Democrats are clueless when it comes to national security. I sure hope their dumb ideas aren't cause they don't care about it much. Idea
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Czarjorge



Joined: 01 May 2007
Location: I now have the same moustache, and it is glorious.

PostPosted: Mon Feb 18, 2008 7:56 pm    Post subject: Reply with quote

Yeah, those stupid Democrats, thinking that companies should be successful on their own merit rather than relying on government subsidies. Those stupid Democrats and their application of free market principals.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Mon Feb 18, 2008 8:08 pm    Post subject: Reply with quote

Czarjorge wrote:
Yeah, those stupid Democrats, thinking that companies should be successful on their own merit rather than relying on government subsidies. Those stupid Democrats and their application of free market principals.


Oh they will be successful and make a lot of money the only difference is they will get the oil from places like the mideast and Venezula where it is cheap to get instead of the US or of shore where it is expensive to get.

Way to make the US energy independent Czargeorge. Rolling Eyes

Right even though Barrak and Hillary oppose the FTA with South Korea they have no problem giving OPEC free trade in the US.

See what I mean the Democrats are clueless on national security .

They would rather kill the oil companies than kill OPEC. Idea
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Kuros



Joined: 27 Apr 2004

PostPosted: Mon Feb 18, 2008 8:46 pm    Post subject: Reply with quote

Joo, I'm not against some sort of energy tax. Americans have paid $20k/family for the Iraq/Afghanistan wars.

I think it'd be interesting if we stuck that price at the pump.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Mon Feb 18, 2008 11:07 pm    Post subject: Reply with quote

Kuros wrote:
Joo, I'm not against some sort of energy tax. Americans have paid $20k/family for the Iraq/Afghanistan wars.

I think it'd be interesting if we stuck that price at the pump.


That is a good start but why not tax imported oil as well?


Make imported oil as expensive as oil found in the US or offshore.

If those things are done then the US can end subsidizes to oil companies. No problem.
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Kuros



Joined: 27 Apr 2004

PostPosted: Tue Feb 19, 2008 12:08 pm    Post subject: Reply with quote

Joo Rip Gwa Rhhee wrote:
Kuros wrote:
Joo, I'm not against some sort of energy tax. Americans have paid $20k/family for the Iraq/Afghanistan wars.

I think it'd be interesting if we stuck that price at the pump.


That is a good start but why not tax imported oil as well?


Make imported oil as expensive as oil found in the US or offshore.

If those things are done then the US can end subsidizes to oil companies. No problem.


That sounds like price controls to me, Joo.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Tue Feb 19, 2008 2:29 pm    Post subject: Reply with quote

Kuros wrote:
Joo Rip Gwa Rhhee wrote:
Kuros wrote:
Joo, I'm not against some sort of energy tax. Americans have paid $20k/family for the Iraq/Afghanistan wars.

I think it'd be interesting if we stuck that price at the pump.


That is a good start but why not tax imported oil as well?


Make imported oil as expensive as oil found in the US or offshore.

If those things are done then the US can end subsidizes to oil companies. No problem.


That sounds like price controls to me, Joo.


More or less the same price as domestic oil. I didn't think of it as price controls. The price would not be reset every day.

But price controls I dunno but OPEC and imported oil is not only an economic problem it is also a national security issue. OPEC is far more sinister entity than any big IS oil company. Given the choice who would you throw yourself at the mercy of?

But if there was ever a case for price controls oil would be it. Oil from the mideast costs somewhere between two and four dollars a barrel so it will always will be cheaper than domestic oil.

Of course the real price of mideast oil when one considers national security is much higher.






Quote:


THE HIDDEN COST OF OIL

� U.S. oil imports: $309.4 billion in 2006, over three times the 2001 level.

� Cost of oil-related defense expenditures: $137 billion in 2006.

� Loss of current economic activity outflow: $117 billion in 2006. The money Americans spend on oil imports is not repatriated through international trade.

� Loss of local, state and federal tax revenues: $43 billion in 2006.

� In 2003 it was estimated that our import dependence deprived the U.S. economy of828,400 jobs.

� Economic toll of periodic oil supply disruptions over the past three decades: between $2.3 trillion and $2.5 trillion.

� Amortized costs of supply disruptions: $133 billion annually.

� The grand total of all oil-related external or �hidden� costs stands on $825 billion per year. This total is nearly twice the figure authorized for the Department of Defense in 2006.� To put the figure in further perspective, it is equivalent to adding $8.35 to the price of a gallon of gasoline refined from Persian Gulf oil, making the cost of filling the gasoline tank of a sedan $214, and of an SUV $321.




http://www.setamericafree.org/saf_hiddencostofoil010507.pdf


Last edited by Joo Rip Gwa Rhhee on Tue Feb 19, 2008 2:36 pm; edited 1 time in total
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stillnotking



Joined: 18 Dec 2007
Location: Oregon, USA

PostPosted: Tue Feb 19, 2008 2:35 pm    Post subject: Reply with quote

I'm going to commit the venial sin of posting another blogger's article in its entirety, because a) it's so damn appropriate and true, and b) because everyone here should get the full benefit of IOZ's inimitable prose style

http://whoisioz.blogspot.com/2007/11/your-miserable-preview-of-failure-for.html

Quote:
Every month or so, and lately about twice a week, someone--usually a Democratic something-or-other, a think-tank centrist, an Aspen Institute drone, an East-Coast University placeholder, or Tom Friedman--rears back, opens his gaping yawp-hole, and howls a panegyrical tribute to the panacea of an increased gas tax. Today, it's Friedman. He'll do as an example of the form, and we'll get to that in a minute. The usual number bruited (as you'll see) is a buck a gallon, and the idea (charitably speaking) is that this increase will coerce changes in American driving habits, which will in turn decrease our "dependence on foreign energy," a signifier, as our English-department aphasiacs might put it, that lacks a signification. This, in turn, will lead inevitably and in a direct line to peace on earth, good will to men, the repair of the hole in the ozone, the reinvention of New Orleans, the lion laying down with the lamb, the light fantastic tripped, and various and sundry other boons to men, women, children, and cute animals of all sizes, types, and varieties. The self-evident absurdity of these claims is no less preposterous when stated more modestly by their advocates. Thus, Friedman:
Quote:
As a higher gas tax discouraged oil consumption, the Harvard University economist and former Bush adviser N. Gregory Mankiw has argued: �the price of oil would fall in world markets. As a result, the price of gas to [U.S.] consumers would rise by less than the increase in the tax. Some of the tax would in effect be paid by Saudi Arabia and Venezuela.�

But U.S. consumers would have known that, with a higher gasoline tax locked in for good, pump prices would never be going back to the old days, adds Mr. Verleger, so they would have a much stronger incentive to switch to more fuel-efficient vehicles and Detroit would have had to make more hybrids to survive. This would have put Detroit five years ahead of where it is now. �It�s called the America wins program,� said Mr. Verleger, �instead of the petro-states win program.�

We simply cannot go on being as dumb as we wanna be. If you hate the war in Iraq, then you want a gasoline tax so you can argue that we can pull out of there without remaining dependent on an even more unstable region. If you want to see us negotiate with Iran, not bomb it, you want a gasoline tax that will give us some real leverage by helping to reduce the income of the ayatollahs.

If you�re a conservative and you believed that the Iraq war was necessary to drive reform in the Middle East, but the war has failed to do that and we need �Plan B� for the same objective, you want a gasoline tax that will reduce the flow of wealth to petrolist leaders who will never change if all they have to do is drill well holes rather than educate and empower their people.

If you want to see America thrive by becoming the most energy productive economy in the world � a title that now belongs to Japan, which doesn�t have a drop of oil in its soil � you want a gasoline tax, which will only spur U.S. innovation in energy efficiency.

President Bush squandered a historic opportunity to put America on a radically different energy course after 9/11. But considering how few Democrats or Republicans are ready to tell the people the truth on this issue, maybe we have the president we deserve. I refuse to believe that, but I�m starting to doubt myself.


This is almost a self-refuting argument. If, in fact, a higher gas tax resulted in decreased consumption--a false assumption, as we'll see--which in turn resulted in lower wholesale prices--also a false assumption--which, again in turn, resulted in consumer-end increases of less than the initial increase represented by the tax, then it would be a very short matter of time before driving returned to and then exceeded its current levels. There's a why in there. I'll get to it in another moment. In any event, the root proposition here, that a dollar-or-less increase in the per-gallon cost of gas will substantially decrease America's gas consumption was soundly refuted when gas prices first leapt from the mid-twos to the over-threes last year, which had the effect of . . . no measurable effect.

Friedman goes on to his usual series of groundless assertions. One of my favorites is the idea that decreased oil revenues will constrain "the ayatollahs." The ayatollahs, of course, have very little money. Iran is poor. Venezuala is poor. Saudi Arabia, in fact, is poor. The fact that the oligarchs of these nations are in some cases able to amass billions of dollars in fortunes impresses the rubes, but is really irrelevant when you consider that Saudi Arabia's GDP is still a mere 1/37th of the United States' and that the Saudi Royal Family is nevertheless in the realm of the private fortunes of America's computer-industry barons, but just a line item in the national budge of the United States. Beyond the fact that these countries are poor by our admittedly exceptional standard, there is the plain fact that depriving, even if only potentially, presumtively dangerous autocrats of their sole source of sustaining income will hardly make them more amenable to US interference in their domestic affairs, nor yet more "predictable" or "rational" or whatever adjective expresses the opposite of what they're currently supposed to be. In the short term, anyway, it should be clear that the destabilization of their economic bases would make them more prone to act rashly, even if the hoped-for long-term effect would be to make it more difficult for them to mount military challenges to American hegemony. Let us also note that they are not now capable of mounting such challenges, because, again, they're poor. In that sense, the consideration is moot even as a hypotehtical. It is one thing to propose some great global benefit--environmental, social, cultural, economic--to the reduction of fossil fuel consumption; quite another entirely to suggest that concerted economic warfare will make us safer.

The same ridiculous principles underly the assumption that by depriving a nation like Saudi Arabia of its sole revenue we can somehow cajole it into "educating and empowering its citizens." In the first place, there's the obvious question of how a hypothetically money-starved nation would pay for all that educatin' and empowerin'. More meaningfully, there is the question of why an essentially totalitarian, theocratic monarchy would want an educated and empowered--rather than a bribed and cossetted--citizenry. Bourbons are not in the business of printing jacobin pamphlets.

But I said I'd talk about the whys, and I will. There is a very fundamental reason why the gas tax idea will simply represent an additional, regressive, wealth-transferring domestic tax with no effect on the economies of Saudi Arabia, less yet Iran, and it is this. Americans have to drive. We have embarked upon a fifty-year project of national development to this effect. Our entire national infrastructure demands it. Friedman and the like look to Europe and see higher gas taxes and less driving, but Europe (and Japan as well) has spent a commensurate period building a transportation infrastructure that obviates the necessity of excessive driving. Americans, meanwhile, built interstates and big box stores and strip malls and far-flung suburban and exurban housing stock, effecting massive transfers of population and wealth out of our already less-dense-than-average urban centers. The reason that Americans didn't decrease their driving at $3/gallon is that they had no choice but to commute to work every day, unless they chose to sell their homes and move into near suburbs serviced sporadically by public transit or else--horror of horrors--back into cities with high property taxes and bad schools--the results, one might add, of the initial period of government-subsidized flight.

This is the white elephant in any discussion of American energy consumption. As a society we are physically unable to reduce our per capita energy consumption because we have spent a half century and trillions of dollars to create a nation wherein personal automobile ownership is necessary to most of the population's economic well-being and survival. Now I am all for a radically different social arrangement, for the re-agrarianizing of exurban and even suburban lands and the repopulation of urban centers, for the reconstruction of rail and subway and trams and trolleys, for walkable communities, for local-level commerce, for full-service neighborhoods in our cities, and for full-service towns in outlying and rural areas. I am not, however, naive enough to believe that this sort of reimagination of America at its most basic physical level can be incentivized through what's effectively a fifty-cent-per-gallon increase in fuel costs.

And that, as they say, is the way it is.


Read IOZ's whole archive if you can. He is one of the best, and you'll laugh yourself sick.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Tue Feb 19, 2008 2:42 pm    Post subject: Reply with quote

Quote:
This is almost a self-refuting argument. If, in fact, a higher gas tax resulted in decreased consumption--a false assumption, as we'll see--which in turn resulted in lower wholesale prices--also a false assumption--which, again in turn, resulted in consumer-end increases of less than the initial increase represented by the tax, then it would be a very short matter of time before driving returned to and then exceeded its current levels. There's a why in there. I'll get to it in another moment. In any event, the root proposition here, that a dollar-or-less increase in the per-gallon cost of gas will substantially decrease America's gas consumption was soundly refuted when gas prices first leapt from the mid-twos to the over-threes last year, which had the effect of . . . no measurable effect




Whether or not they will drive less is debatable, though when something is more expensive people tend to use it less. That part is not debatable. A higher gas will encourage people to drive more fuel efficient vehicles.. It would also provide the govt. With funds to invest in alternative energy. Both of which would lead to less energy use.


Quote:
One of my favorites is the idea that decreased oil revenues will constrain "the ayatollahs." The ayatollahs, of course, have very little money. Iran is poor.


Yep and if they get alot poorer they just might collapse.







Quote:
February 2, 2007
Op-Ed Columnist
The Oil-Addicted Ayatollahs
By THOMAS L. FRIEDMAN
MOSCOW

There may be only one thing dumber than getting addicted to consuming oil as a country � and that is getting addicted to selling it. Because getting addicted to selling oil can make your country really stupid, and if the price of oil suddenly drops, it can make your people really revolutionary. That�s the real story of the rise and fall of the Soviet Union � it overdosed on oil � and it could end up being the real story of Iran, if we�re smart.

It is hard to come to Moscow and not notice what the last five years of high oil prices have done for middle-class consumption here. Five years ago, it took me 35 minutes to drive from the Kremlin to Moscow�s airport. On Monday, it took me two and half hours. There was one long traffic jam from central Moscow to the airport, because a city built for 30,000 cars, which 10 years ago had 300,000 cars, today has three million cars and a ring of new suburbs.

How Russia deals with its oil and gas windfall is going to be a huge issue. But today I�d like to focus on how the Soviet Union was killed, in part, by its addiction to oil, and on how we might get leverage with Iran, based on its own addiction.

Economists have long studied this phenomenon, but I got focused on it here in Moscow after chatting with Vladimir Mau, the president of Russia�s Academy of National Economy. I mentioned to him that surely the Soviet Union died because oil fell to $10 a barrel shortly after Mikhail Gorbachev took office, not because of anything Ronald Reagan did. Actually, Professor Mau said, it was �high oil prices� that killed the Soviet Union. The sharp rise in oil prices in the 1970s deluded the Kremlin into overextending subsidies at home and invading Afghanistan abroad � and then the collapse in prices in the �80s helped bring down the overextended empire.

Here�s the story: The inefficient Soviet economy survived in its early decades, Professor Mau explained, thanks to cheap agriculture, from peasants forced into collective farms, and cheap prison labor, used to erect state industries. Beginning in the 1960s, however, even these cheap inputs weren�t enough, and the Kremlin had to start importing, rather than exporting, grain. Things could have come unstuck then. But the 1973 Arab oil embargo and the sharp upsurge in oil prices � Russia was the world�s second-largest producer after Saudi Arabia � gave the Soviet Union a 15-year lease on life from a third source of cheap resources: �oil and gas,� Professor Mau said.

The oil windfall gave the Brezhnev government �money to buy the support of different interest groups, like the agrarians, import some goods and buy off the military-industrial complex,� Professor Mau said. �The share of oil in total exports went from 10-to-15 percent to 40 percent.� This made the Soviet Union only more sclerotic. �The more oil you have, the less policy you need,� he noted.

In the 1970s, Russia exported oil and gas and �used this money to import food, consumer goods and machines for extracting oil and gas,� Professor Mau said. By the early 1980s, though, oil prices had started to sink � thanks in part to conservation efforts by the U.S. �One alternative for the Soviets was to decrease consumption, but the Kremlin couldn�t do that � it had been buying off all these constituencies,� Professor Mau explained. So �it started borrowing from abroad, using the money mostly for consumption and subsidies, to maintain popularity and stability.� Oil prices and production kept falling as Mr. Gorbachev tried reforming communism, but by then it was too late.

The parallel with Iran, Professor Mau said, is that the shah used Iran�s oil windfall after 1973 to push major modernization onto a still traditional Iranian society. The social backlash produced the ayatollahs of 1979. The ayatollahs used Iran�s oil windfall to lock themselves into power.

In 2005, Bloomberg.com reported, Iran�s government earned $44.6 billion from oil and spent $25 billion on subsidies � for housing, jobs, food and 34-cents-a-gallon gasoline � to buy off interest groups. Iran�s current populist president has further increased the goods and services being subsidized.

So if oil prices fall sharply again, Iran�s regime will have to take away many benefits from many Iranians, as the Soviets had to do. For a regime already unpopular with many of its people, that could cause all kinds of problems and give rise to an Ayatollah Gorbachev. We know how that ends. �Just look at the history of the Soviet Union,� Professor Mau said.

In short, the best tool we have for curbing Iran�s influence is not containment or engagement, but getting the price of oil down in the long term with conservation and an alternative-energy strategy. Let�s exploit Iran�s oil addiction by ending ours.



http://select.nytimes.com/2007/02/02/opinion/02friedman.html?_r=1&oref=slogin&pagewanted=print

Let OZ deal with this.
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stillnotking



Joined: 18 Dec 2007
Location: Oregon, USA

PostPosted: Tue Feb 19, 2008 3:26 pm    Post subject: Reply with quote

Joo Rip Gwa Rhhee wrote:
Whether or not they will drive less is debatable, though when something is more expensive people tend to use it less. That part is not debatable.


Gas prices haven't affected American driving habits since the 1970s, and even that downturn was caused by a lack of supply rather than a lowered demand. When gas gets more expensive, people don't stop driving. They just complain, suck it up, and try to save money somewhere else.

We're addicts. Do junkies stop shooting up when the price of heroin skyrockets? Nope. They just steal a few more TV sets. And the drug dealers don't go out of business, either.
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Joo Rip Gwa Rhhee



Joined: 25 May 2003

PostPosted: Tue Feb 19, 2008 4:42 pm    Post subject: Reply with quote

stillnotking wrote:
Joo Rip Gwa Rhhee wrote:
Whether or not they will drive less is debatable, though when something is more expensive people tend to use it less. That part is not debatable.


Gas prices haven't affected American driving habits since the 1970s, and even that downturn was caused by a lack of supply rather than a lowered demand. When gas gets more expensive, people don't stop driving. They just complain, suck it up, and try to save money somewhere else.

We're addicts. Do junkies stop shooting up when the price of heroin skyrockets? Nope. They just steal a few more TV sets. And the drug dealers don't go out of business, either.


Well maybe the price hasn't gotten to pain threshold.

And higher gas prices would encourage people to switch to more fuel efficient vehicles. Notice how GM and Ford suffered.
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stillnotking



Joined: 18 Dec 2007
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PostPosted: Tue Feb 19, 2008 5:31 pm    Post subject: Reply with quote

Joo Rip Gwa Rhhee wrote:
stillnotking wrote:
Joo Rip Gwa Rhhee wrote:
Whether or not they will drive less is debatable, though when something is more expensive people tend to use it less. That part is not debatable.


Gas prices haven't affected American driving habits since the 1970s, and even that downturn was caused by a lack of supply rather than a lowered demand. When gas gets more expensive, people don't stop driving. They just complain, suck it up, and try to save money somewhere else.

We're addicts. Do junkies stop shooting up when the price of heroin skyrockets? Nope. They just steal a few more TV sets. And the drug dealers don't go out of business, either.


Well maybe the price hasn't gotten to pain threshold.

And higher gas prices would encourage people to switch to more fuel efficient vehicles. Notice how GM and Ford suffered.


There probably is no pain threshold as such. I'm not sure you understand just how fully dependent our economy is on oil. To cite just one example, if the price of gas went to $20/gallon, every supermarket in America would close. Not adapt, not make less money, not change their business model -- close. What they'd be replaced with is difficult to envision, but they'd take most of the processed-food industry with them.

Encourage people to switch to more fuel-efficient vehicles? Sure. It'd probably encourage them to buy more local goods and ride more bikes and a ton of other laudable but essentially inconsequential things. To continue the heroin analogy: tripling the price of heroin would encourage junkies to buy more grapefruit juice and Tagamet, but they'd still be junkies.
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