LET’S RAISE PRICES ON A GALLON OF GAS!

SAMMUELSON (2005) NEWSWEEK, 9/19. 41.

It won’t happen, but by raising the price of gas per gallon, Americans will begin shifting toward cars that get more mileage per gallon. The extra money COULD go to reduce the debt. However, given the spending patterns of many past administrations, the money could go to pet projects. We are acquiring a substantial debt that is owned by the Chinese, Indians, and Japanese.

It takes about 15 years for the fleet in America to be turned over to car collectors, the poor, and junkyards. Further, American car companies (who have junk bond status) have invested in SUV’s and Trucks. That is where the money is at the moment. However, you see this, expensive gas changes numerous priorities that MAY release us from dependency on gas from the Middle East. About 60% of gas consumption goes to autos.
There are really some beautiful small cars and they can over the long run cost less than the sticker price.

High gas will also impact the trucking industry. On the other hand, they can move from over the road to being rail car beds on wheels and little travel is required to the wholesaler or retailer.

The taxes should be raised gently. High prices now will probably go down and then move upwards again. Cheap oil that comes easily out of the ground is now on the downswing.