May 21, 2024

Silly Reasoning When it Comes to Gas Prices

Fuel 1 This is quite the interesting bit of logic:

Eliminating the federal tax, about 18 cents a gallon, would encourage more driving, putting added pressure on supplies, and driving the underlying price of gasoline higher. Since gasoline taxes go to pay for rebuilding crumbling roads and bridges, this is probably not a good time to do away with them.

And making gas cheaper will only postpone progress toward developing alternative ways of fueling cars. Better to just give everyone a tax rebate (coming soon to a mailbox near you) to help ease the pain at the pump.

Do you see the flaw in reasoning?

Ok, so I have a Dodge Caravan SE that has a 20 gallon tank.  The government goes out and lowers the cost by 18 cents a gallon.  That means that what I save on a total tank full is… $3.60.  Or a difference between paying $75 and $71.40.

See it now?  I’m not likely to change my driving habits simply to save $3.60.  Cutting the federal tax on gas is a band-aid to be sure, but it won’t make people, all of a sudden, feel encouraged to do more driving.  What it would do is take a little bit of the sting out of the price for those that are commuting long distances to work.

Now, have the discussion about whether to not people should live closer to work– a valid discussion indeed.  Talk about mass transit.  Don’t talk about ethanol– that’s just plain ridiculous when there are food shortages because we’re using food for fuel.  Talk about drilling in ANWR.  Why in the world are we trying to increase our dependence on Saudi Arabia, Senator Schumer, by asking them to give us more gas when we have plenty right here in America?!

But don’t talk about how $3.60 on a full tank of gas is going to somehow magically encourage me to take more road trips.  My trips are planned and I budget for the gas as well, but the trips are going to happen or not happen regardless.

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8 thoughts on “Silly Reasoning When it Comes to Gas Prices

  1. I have to disagree completely. First of all, your individual situation isn’t a good model for the entire U.S. Fleet users (like trucking companies, etc.) will absolutely drive more if gas prices are lowered. Second of all, gas taxes should be increased, not lowered. Here’s why:

    Higher gas taxes raise prices and reduce demand. People will either cut back on their miles or they will go buy something newer and smaller that gets better mileage. Reduced demand will inevitably lead to lower prices.

    We’ll also enjoy being slightly less dependent on foreign oil and we’ll be helping the environment by reducing the amount of gas people use. It’s a win-win.

  2. @Jason: Glad to hear a differing point of view, Jason.

    Why will the U.S. Fleet users drive more if the gas price is lowered 18 cents a gallon? If I’m correct, packages still need to get to their destinations, people still need their produce, and the costs are being passed on to the customers.

    I’m arguing that the size of the drop (18 cents) is not enough to make the difference that those who make your argument are making.

    As to your second point, we already have people complaining about not being able to afford food and gas and pay their bills. Raising the gas tax will only exacerbate this problem. Sure, in a perfect world model this would happen, but if we’re talking about people who are already having to choose what to buy and what not to, and the foreclosure mess, etc. the reality on the ground is that if you raised this amount you’d end up with a worse economic mess than we are in.

    So, the person takes out a loan to buy a car that he doesn’t have, and cannot sell his current gas gussler because no one wants it. That raises his bills. He also has to spend more on gas. Or if he wants to relocate, he has to sell his house, but who wants to buy a house so far away.

    And then there’s less for disposable income. Because gas costs more, I may not go shopping as much (and online isn’t an option, because the companies have to pay more for shipping, and they’ve passed along the cost of gas– or have fewer shipment options because of less fleet size). So, less disposable income means less discretionary spending which equals layoffs. So, fewer jobs. More unemployment.

    Higher gas tax prices will reduce demand– because people won’t have a job. The tourist industry will collapse as fewer people take trips. And demand alone will not control the price of gas, since it’s global. America has reduced its gas intake, but developing countries have increased– and at alarmingly cheap rates. For example, Saudi Arabia has like 19 cent a gallon gas. The gov’t subsidizes it, and it’s eating up demand.

    To reduce reliance on foreign oil, we need domestic oil, not crippling our economy by allowing other countries to eat up oil and forcing our people to go without. We can’t just be looking nationally here, we have to look internationally. And 18 cents a gallon really isn’t going to make that big of a difference.

  3. “Don’t talk about ethanol– that’s just plain ridiculous when there are food shortages because we’re using food for fuel.”

    Ethanol can be produces by more than just grains and edible foods. A company has recently found a way to make ethanol out of any bio-degradable substance; aka our compost will soon be fuel.

    Unlike many other “new fuel options” with an upgrade in the fuel-injection chip even old cars can run on 100% ethanol. As a result we do not need to throw out every car on the road just to convert to the new fuel type.

    From what I understand the shortages in food “due to ethanol” has had to do with stupid government incentives. Much of the ethanol has been made from corn which is no where near the best crop for ethanol yield… yet from what I understand that is the product we offered government incentives to turn into ethanol.

    Not to mention… we’ve had earthquakes in Ohio and other random places… nations are rising against nations… so all we need now is pestilence and famine?

    I think its a good time to get a large pantry and stock up on the staples. Food is not going to get any cheaper, especially if pestilence starts kicking in.

    Mat 24:7 “For nation shall rise against nation, and kingdom against kingdom: and there shall be famines, and pestilences, and earthquakes, in diverse places.”

    Dlogans last blog post..Simple Solution to reduce spam on the server

  4. @Dlogan: Actually, Dlogan, we are also facing a shortage on fertilizer! Believe it or not, farmers in the midwest are having to do without getting all of their fertilizer order (your compost and other chemicals) because there’s more demand than supply.

    However, ethanol isn’t a good fuel source– especially in light of the fact that there is plenty of oil– the government just won’t let us get it.

    And you’re right about the corn incentive. The government is subsidizing corn for ethanol production. That’s making it more profitable for farmers to change their fields over to make this stuff, and cutting into our food supply.

    As to your Bible reference, stocking up may or may not be a good idea, but it’s definitely a good time to be witnessing, for I feel the end may be nearer than we imagined.

  5. A good majority of American’s do not compost at all. I would estimate that at least 90% do not compost. Should it become profitable to collect compost you will see composting just like recycling is offered in many cities.

    Most fertilizer’s are not compost but are a mixture of different nitrate’s, which is heavily dependent on the oil production. It was my understanding that this is why there was a shortage, not because they’re not getting enough substance from their cows.

    Certainly we should be witnessing more. However, it doesn’t take a brilliant person to realize that oil is going to continue going up in price. Since all the foods we eat require oil for production and delievery, food prices WILL go up in price.

    If you are running a tight budget, or simply trying to be a good steward of what God has given you so you can invest more in the church and missions, it would be a wise decision to stock up on non-perishables that you will need in the future.

    I’m not talking about some doomsday philosophy here. Clearly Christ will be coming relatively soon, but before he does there will be more of the signs. Since one of the signs is famine, its only logical that as Christian’s we should be following God’s word and preparing for such a time. If for no other reason but because we will be able to afford to feed our families and other families due to the money we saved in our food supply.

    Just think of it this way, if you had a 2,000 gallon tank 3 years ago and you had filled it with gas, just imagine how much you could be saving now on fuel prices.

    The same thing is and will continue to happen with food. As oil goes up in price, food will go up in price. If pestilence kicks in and their is also dwindling the food supply the effect will be further compounded.

    Dlogans last blog post..Simple Solution to reduce spam on the server

  6. This is some really good information about how to deal with gas prices. It is good to know that you will want to consider how much a gallon will really get you. It might be smart to do some research on what type of fuel will be best for your car as well.

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