Gas Prices in the United States

^ Yes and no. Yes in the sense that it will cause a significant price spike on everything. No in the sense the economy will adjust in the sense demand will crumble (gasoline has proven it has an L-shaped elasticity curve where it suddenly becomes elastic when gas hits about 4.00 a gallon), inventories will rise and the net result is the people saying it was too low getting a slap in the face by real world economics as the price plummets in relation to demand.

Exactly. I'm of the belief that the shock in demand at around $4 per gallon would mean that a $2 increase in gasoline taxes would probably leave pump prices around $4.25 to $4.50, with a sharp decline in demand leading to the pre-tax price falling by $1-$1.25.

Of course, the gasoline tax would be offset by cutting taxes in other places, so it is fair to say that the total impact on the tax would be a lot less than it would appear at first glance.

Why does that still not sound like a good idea, since America is very much so a car nation, and is so by necessity, since it's fucking huge?

^ Because it isn't. Unless you like a big unwashed swathe of abject poverty from California to Virgina and everything in between.

Ok, good, just making sure... 0_o

Of course it sounds like a bad idea, and of course it's going to hurt. But until we get over the mindset of 'America as a car nation' and Americans having a God-given right to drive Hummers getting 12 mpg, sprawling 5000 and 6000 sq ft. Mc Mansions, and other wasteful and inefficient gas-wasting lack-of-technology, the country isn't going to take the next great leap. Better to tax now and let the market decide how to progress than to find out that there is chronic scarcity in 50 years and have to live through that.

^ But we are a car nation. Do you know how much of the country lives in areas which have no practical public transportation of any kind (and is unfeasible to implement)? Do you know how long it takes to walk from town to town in many areas? (Hint: it's measured in days.)

He has a point. We are a car nation, but we choose to use very inefficient cars. Hell, you can make an SUV efficient, after all. It's not like you can claim that all hybrids are shitty European/Japanese nonsense. It's only that way, if it's at all true, because we refuse to make better, larger hybrids...

I'm well aware, and I live in one of those places that has very limited public transportation. I fully accept that we cannot hope for those changes to take place overnight. However, we should start steering the market toward those paths, and to do so sooner rather than later. Smaller homes and fuel-efficient cars are steps we can take. I believe that a massive high-speed rail system much like the interstate highway system is something the US should undertake, as soon as some politicians grow a spine (but I'm dropping that subject, as that's a topic for another thread).

It won't be easy. I expect there to be pain. But sometimes it's necessary to take pain now to make things a lot easier later.

What do you take us for? Japan? We have room for huge houses.

Do we have unlimited electricity to heat them and unlimited gas/oil to heat them? Do we have unlimited gasoline to drive between the sprawling suburbs that these oversized houses demand?

Do we have the willpower to clean a house four times bigger than what we actually need? (That last one was a joke.)

edited 24th Aug '11 7:30:19 PM by DarkConfidant

^ Gas/oil are not the only means of heating. (The cheapest is merely use the Sun which applies to everywhere but northernmost Alaska in the winter.) And yes we can make unlimited electricity by way of nuclear, solar, and countless other sources.

But you see, that's just the point I'm making. If we have these technologies in place, then house size isn't a constraint. When fuel cell technology becomes efficient, we can drive all the SUV's we want. But we'll never find the political will without the economic impetus of high fuel prices, at least not until scarcity forces us to that point.

...nobody is investing in any of those things.

Sadly, (and I really hate this) the Republicans have come to associate "alternative energy" with "some Democrat bullshit," when it would actually be really nice to have...

Political will? It wasn't political will that doomed the H3 in 2008. It wasn't political will that saw the rise of the Tesla Roadster, or Honda Leaf.

It was $4.54 gas prices in August 2008 brought on by a speculator's market. (Really, there was no legitimate reason for petroleum commodities to be trading at $144 per barrel.)

But does that trading price really increase the price of production?

Transportation to distributors?

So why would it change the price at the pump?

^ Because the commodity price is the price of unrefined crude subject to the open speculation of the market. The base ingredient needed to produce fuels in the first place.

A lot of products are victim to this. Grains, assorted metals (including gold, silver, iron, steel and copper), cotton, hell even cattle and hogs are subject to the commodities markets.

And that's the point I'm making. If taxes on gasoline and petroleum products were increased, there would be a lot of research and development into ways to move beyond a petroleum based economy entirely.

Better to do it in a controlled environment when we can provide subsidies to those most affected than to wait until the market sees these prices (or higher ones) on its own.

: Because if speculators drive up the futures prices for crude oil, producers and suppliers will hoard it to sell it at that higher future price.

edited 24th Aug '11 7:47:03 PM by DarkConfidant

The time to implement a carbon tax was 8 years ago back when gas was cheap, the economy was booming, and Detroit was giving away gas guzzlers. It's harder to do it now because the economy is in such a terrible state.

edited 24th Aug '11 8:24:39 PM by storyyeller

This is because they approached it as an environmental issue instead of a technology/economical issue.

A little from column A, a little from column B.

What would happen if Americans had prices of $1.40 per litre? (about $6 per gallon?)

^ Not a single politician who enacted that price via taxes would keep their job. Not. A. Single. One. Of. Them.

edited 25th Aug '11 5:03:49 AM by MajorTom

So the only stopping the USA from having normalised petrol prices is the fear of losing their job?

Thats pretty shitty imo.

^ The secondary effect is a massive economic hit. The effect on the economy was already bad enough at $4.54 three years ago. Imagine how bad $6.00 would do based on the exact effect as 2008.