You’ve probably noticed that gas prices here in the United States have been at “historic” high levels for quite a while now. What that means is that they’re super-high compared to what we’ve gotten used to, but not quite as high as they were under Jimmy Carter when prices are adjusted for inflation. Everyone’s moaning and whining about how much they’re paying. Right now it’s an average of an extra $500 per vehicle per year compared with a couple of years ago, and that’s a shock. It’s counteracted some of the benefits of the Bush tax rebates, it’s breaking the back of the working man, it’s going to lead to runaway inflation, and so on – or so they tell us again and again.
Here’s the truth. Gas prices have been artificially low in the US for decades. It’s been great for the auto industry, and it has helped keep other consumer prices down, but it’s also built up hugely false expectations, led to dangerous complacency in a number of industries, devastated our balance of trade, and cost us a good measure of our economic independence. People in every other country around the world are paying about twice what we pay for gas, and they find a way to live with it. Right now we only see the short-term cost, but maybe it’s time to look at the long-term benefits of higher gas prices, finally embrace reality and encourage them to go even higher.
Yes, lower gas prices do save us gas money and let us drive bigger and more expensive cars. They also slightly reduce the prices of most consumer goods, which are distributed nationwide by truck. Here’s what low gas prices have also done.
• They’ve destroyed our domestic oil industry by making it unprofitable to exploit the massive oil resources here in the US.
• They’ve destroyed the railroad industry because they make trucking goods cheap enough that trucks can outperform railroads, which are by nature a more cost-effective and efficient means of transporting goods.
• They’ve encouraged stagnation in the auto industry. Better, more efficient engines have been designed, but because gas prices have been so low the market demand for them is low, so they aren’t being produced with much enthusiasm.
• As a side-effect of this, low gas prices also contribute to higher levels of pollution because they encourage us to drive more than we really need to and not use alternatives.
• They increase the tax burden for everyone because high levels of traffic increase maintenance cost for highways.
• They’ve encouraged urban sprawl, which has spread people out too much and made urban mass transport impractical and expensive.
• Dependence on low gas prices has put us at the economic mercy of terrorist nations in the Middle East, which we depend on for our supply
• They’ve even been a large factor in the near-disappearance of the family farm, because with cheap trucking it’s easier to bring in produce from outside of the country or from huge agrobusinesses than to buy from small local producers.
The list goes on and on. Low gas prices are at the root of many of the long-term economic problems we face today.
Yes, high gas prices hit us hard in the wallet. But what’s the natural response to an unexpected expense? You look for ways to economize. You don’t like paying so much for gas for your Hummer? Go out and buy a smaller car. Go out and buy an electric car. Go out and buy a hybrid car. Drive a car that runs on a non-petroleum fuel – they do exist. Ever heard of Ethanol or Biodiesel? You might even take a look at public transportation. Your parents and grandparents probably used it and they survived.
Low gas prices discourage innovation and the introduction of new technology Did you know that a company called UQM Technologies has developed a hybrid engine for the Hummer? But because gas prices have been so low, it hasn’t been planning to make it available to the public and is just selling it to the military. Similarly, Dodge has a high-efficiency hybrid pickup that can run on biodiesel — a brilliant combination — but they aren’t marketing it to consumers because cheap gas keeps demand down. Several companies even have viable electric cars ready to go to market as well. They’ve just held off from major distribution because they couldn’t compete with regular cars because gas prices have been so low.
Similarly, distribution of alternative fuels for the already existing vehicles which can run on them has been slow because it was hard to compete with gas on price. Biodiesel sells for about $2.75 and pure Ethanol for around $3. The gas price has to get higher than that before they’re competitive. Until then they’re just much lower-polluting and cooler than petroleum.
Higher gas prices would change all of this. Higher gas prices mean that you might soon be able to buy a Hummer which gets better gas mileage than a mid-size sedan does now. Higher gas prices would mean:
• Instead of buying foreign oil we could use our vast domestic resources of harder to access oil like oil shale, which would create lots of jobs and business revenue
• Reducing our trade deficit and making the economy stronger by importing far less gas at a disadvantageous price.
• A rebirth of the failing railroad industry so we wouldn’t have to bail it out every few years.
• Giving the lazy car companies a kick the right direction and putting new and more efficient technology on the fast track.
• The return of farmers markets, farm cooperatives, a boom in small farms and the end of farm subsidies – all because it would become more economical to produce locally than trucking produce nationwide. Not to mention the huge growth in agriculture for the production of biodiesel and ethanol.
• Less endless highway construction to accommodate the ever-growing numbers of cars.
• Lower state and local taxes for road maintenance on roads that will handle less traffic.
• New and better transportation networks, making attractive but impractical systems like light rail a truly viable option.
• Reduced pollution, first from people driving less and ultimately from increased use of more fuel-efficient and less-polluting vehicles.
• A much stronger economy because all of these things would create jobs and opportunities to make money and start new businesses.
Every additional cent you pay for gas is an investment in strengthening our economy, improving our environment, and making our nation more independent. Do you like paying money to oil shieks who pass it on to terrorists?
Realistically, our current gas prices around $3 a gallon aren’t quite high enough to cause all these changes quickly – that’s actually still a relatively low price compared to other parts of the world. We’re getting closer and things are slowly changing, but to see real change we need to head for $4 a gallon or break the $5 barrier.
What we really need on top of this increase in gas prices is a whopping big federal gas tax. Don’t expect to see such a move from the Bush administration, but a $1 a gallon tax on gas would push the price high enough to bring about immediate change, plus it would put enough revenue into the federal coffers that they could balance the budget and pay for the War in Iraq and maybe even keep lowering our taxes at the same time. Another quarter or so in state taxes would solve state budget problems just as quickly.
Conservatively, with a $1 tax on each gallon of the almost 300 billion gallons of gas we consume each year we’d be looking at close to $300 billion in added revenue for the federal government per year. That’s enough money to solve a lot of problems. Here in the State of Texas a quarter a gallon would be at least $4.5 billion for the state each year. That’s more than we need to solve our education funding problems and turn the border with Mexico into some sort of futuristic video game arena.
So, embrace higher gas prices. They’re good for you and good for the country. Write your congressman, write your governor, write the president. Tell them you’re ready to see gas at $5 a gallon and the sooner the better. Pay more for gas, stick it to the Arabs and see our economy boom.Powered by Sidelines