Oil Tidbit

Discussion in 'Politics, Religion, Social Issues' started by Desertrat, Jun 3, 2008.

  1. Desertrat macrumors newbie

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    #1
    From a Doug Casey newsletter comes this item. It might make for a better understanding of the fact that blaming oil companies and speculators for the rise in oil prices is quite foolish.

    "Last week, Indonesia’s Minister of Energy and Mineral Resources, Purnomo Yusgiantoro, announced that his nation would not renew its OPEC membership.

    Indonesia no longer has the ”E” to stay in OPEC (Organization of Petroleum Exporting Countries). It had been a net importer of oil since 2004.

    Casey Research's Energy Division attended the recent oil and gas show in Jakarta, and it’s plain to see where the new oil demand is coming from. Greater Jakarta, Indonesia’s capital, hosts 23 million people, and while ten years ago the majority of them rode bicycles, now nearly everyone has a new 2-stroke Honda motorbike. Those who were riding motorbikes are now driving cars. (And those who were driving cars have moved to Australia to escape the smog.) In this light, it’s not surprising that Indonesia’s oil consumption has more than doubled since 1990.

    As to their slumping oil production, it is no doubt partially due to a lack of reinvestment. Foreign oil companies are tired of paying 85% of their revenue into government coffers, and are looking to areas of the world where the fiscal regime is not as severe.

    The main problem, however, is an extremely common one. Indonesia has exploited its fattest hydrocarbon targets, and the remaining exploration sites cannot make up for the decline from its existing oil fields. There’s certainly plenty of oil left to be found in Indonesia’s archipelago, but it’s equally certain that they’ll never regain their peak production rates of 1,600 barrels per day."

    Note that the aforementioned "reinvestment" comes from those oil company profits that some whine about. Also note the implications of the final paragraph: The "fattest", the good stuff, is in decline. Only some 25%, worldwide, of crude oil is "light, sweet"--which is the most suitable for transportation fuel.

    Mexico, one of our main sources for imported oil, is expected to be in this same condition by around 2012 to 2014--unless they change their Constitution to allow foreigners to actually own some percentage of oilfield projects. There's deepwater offshore oil, but Mexico lacks the know-how technology to develop it. Oil companies won't bet on the come to act as contract hired hands. Mexico's history makes payment problematical.

    'Rat
     
  2. Ugg macrumors 68000

    Ugg

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    #2
    You forgot to mention Venezuela and Russia, Saudi Arabia, Iran, Iraq, Nigeria, Indonesia... They're all controlled by despots who are only too eager for the price of oil to stay high.

    Anyone who thinks we can rely on them to relieve our pain....

    I've said it before, the only way out of this mess is to pump a lot of money into alternative transportation research in order to show the world the US is serious about curing its addiction. If we expect to remain on top, it's time to make some sacrifices. The ICE has to be at the top of the list.
     
  3. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #3
    And anyone who thinks we can relieve our pain by taxing oil companies' modest profit margin...
     
  4. Ugg macrumors 68000

    Ugg

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    #4
    Can you point out where I made such an inane statement?

    I have stated any number of times that I think it would be a really good idea if the Executive Office and the oil industry in the US were separated from each other. Also, that corporate welfare for oil companies is really, really stupid.

    Once again, oil is NOT our future. The sooner we get that into our thick little heads, the better.

    Bush begging the sheiks of Araby to lower the price of oil is really, really sickening. Threatening Chavez who, IMO is a twat is just as bad. Much less Ahmadinejad.

    Had we spent the money that was spent on invading Iraq on mass transit and alternative energy, we might not be paying $4+ a gallon right now.

    Oh well.
     
  5. Desertrat thread starter macrumors newbie

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    #5
    Ugg, not you on the tax thing. Hillary.

    If the subsidies are ended, the cost of doing business rises for the oil folks. Ergo, they raise their prices. The demand for their product is relatively inelastic.

    "Had we spent the money that was spent on invading Iraq on mass transit and alternative energy, we might not be paying $4+ a gallon right now."

    To some extent, that's similar to the idea that nine women can have a baby in one month. Billions of dollars are being spent on alternative transportation power sources and fuels, and there is not an unlimited supply of brilliant minds for that one purpose.

    Even without the Iraq war, mass transit money would not have been available from the feds in any meaningful quantity. The direct costs, over and above "normal" military spending, still only run to about 1/3 of the annual federal budget deficit.

    Interesting times...

    'Rat
     
  6. ert3 macrumors 6502a

    ert3

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    #6
    Its not a modest profit margin until you just barely make above what is needed to pay all of your employees.
     
  7. Ugg macrumors 68000

    Ugg

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    #7
    That sum of money would have built a lot of new subway/light rail lines.

    I think it's also fair to say that the amount of fuel the US military is using has helped push up oil prices. Much less the resultant deficit spending from the war that's pushed the dollar lower and increased the price of oil.

    We can go back and forth but in the end, oil is no longer a long term solution for our transportation needs. The sooner we accept that, the better off we'll be as a country and as a planet.
     
  8. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #8
    And where did you get this definition?
     
  9. CalBoy macrumors 604

    CalBoy

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    #9
    You don't tax the oil producers, you tax the oil consumers. ;)

    If we had been using a 25%-35% tax on petroleum since 2001, consumers would have long ago stopped buying larger and larger cars, and would have made demands for more public transit.

    It isn't a coincidence that those nations with the highest petrol taxes (ie Japan) have the lowest per capita consumption of petroleum.

    If we act quickly we can still build the infrastructure necessary to be largely independent of oil and secure a brighter energy future for our posterity.

    We might go through growing pains for five or ten years, but that's a small price to pay for future generations who wont' have to deal with the mess that the previous generations created.
     
  10. Desertrat thread starter macrumors newbie

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    #10
    "That sum of money would have built a lot of new subway/light rail lines."

    True. But as I said above, that money is not available. The direct annual cost of the Iraq war, over and above other military spending, is roughly $100 billion a year. The federal deficit is roughly $300 billion. Absent Iraq, that $200 billion precludes spending on infrastructure. And if we left Iraq, the Maxine Waters claque would call for another "Peace Dividend" to be spent on social assistance.

    My understanding is that the military use of transportation fuel is the largest single identifiable user in the US. In Iraq, of course, it's purchased mostly from Kuwait.

    ert3, "modest" is not subject to your opinion or mine. Generally, the smaller the business, the higher the profit must be in order to keep the doors open. Grocery chains operate at somewhere around four percent, last time I paid attention. The recent Exxon profit ran roughly seven percent. Fast food chains run ten percent and more. (If you're a small independent with sales of $100,000 per year, you'd better make a 100% profit, minimum.) And all those financial firms that have been going broke were previously profiting by well over twenty percent--and where were the complaints from Congress, then, about "obscene" and "windfall"? Financial corporation bonuses to employees were greater than the gross profits that Exxon made.

    If an employer (yours?) were invested in a retirement program, would you not want him to seek profitable stocks? Would you maybe advise him to buy Exxon? It's only your retirement pay that's involved. How about the middle class and their 401ks, etc? Shouldn't they hold profitable equities?

    High profits = comfortable retirements. Beats hell out of Social Insecurity, for sure.

    CalBoy, punishing consumers as public policy sucks. It also loses elections. But, yes, adding $1.25 to today's $4.00 gasoline would definitely reduce usage. It would also cause a helluva lot of bankruptcies, at this point in time. The tourism business is one of the largest service groups in the U.S. We're in deep doo-doo for money now; where's the money for unemployment compensation supposed to come from? A casino hotel in Vegas is 1.5 jobs per room. Then there are the motels and the various business which cater to folks on the road. Car repair shops, etc. And don't forget Winnebago's employees.

    TANSTAAFL.

    'Rat
     
  11. CalBoy macrumors 604

    CalBoy

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    #11
    It doesn't always have to.

    California has had a higher gas tax than any state in the union for decades now; I seem to recall incredible longevity for most of CA's legislators and its governors (3 governors have been reelected in the past 6 election cycles-or 100%).
    I don't mean to come off as callus, but who cares? Only those industries that are incapable of adaptation and flexibility would suffer. True business innovation would still thrive, as it has in every other economically advanced democracy.
    Why should we care about industries that are undoubtedly environmentally irresponsible?

    If Winnebago can make a good product, it will always attract a certain clientele regardless of fuel prices. To say that we should base economic and tax policy because of a few industries is absurd, especially given the grave consequences of inaction.

    Car repair shops probably wouldn't suffer any more than they do at the moment, and even if they did, we could argue that this is part of the "creative destruction" that is economics. At every point in time the advancement of technology causes some businesses to fail and others to thrive. This is the same thing.
     
  12. themadchemist macrumors 68030

    themadchemist

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    #12
    I think 'Rat's got a point that drawing these direct connections is flawed. Budget reductions in one place do not directly translate into budget increases in others, and budget increases do not necessarily create cuts. In an environment in which we deficit spend to the hilt, there isn't a "closed system" where budget items necessarily impact each other. Without firm restrictions, Congress doesn't have to operate budget choices like a zero-sum game, though I wish they would.

    That said, I agree that the war is a huge waste of money and that that money could be put to many better uses. But this is three separate arguments. One, we're wasting money. Two, we should be spending money on things X, Y, and Z. Three, we should be applying common sense to our budget such that spending on the latter requires a decrease in the former.

    I strongly doubt that oil use by the US military has had any impact on oil prices. I have seen a couple of estimates of US war-time attributable military oil consumption, ranging from about 56,000 barrels per day (http://karbuz.blogspot.com/2006/06/military-oil-consumption-in.html) to around 100,000 barrels per day (http://www.army.com/blog/item/1292). I don't have an official source on this, but let's assume for a second this is in the ballpark. US oil consumption is about 20 million barrels per day (https://www.cia.gov/library/publications/the-world-factbook/print/us.html) and world oil consumption is about 80 million barrels per day. That means that war-time attributable oil use accounts for .28% of US oil consumption and just .07% of world oil consumption. It's less than rounding error. Even if we want to take total US military oil consumption, around 300-400k barrels/per day, (and here's another source: http://www.npr.org/templates/story/story.php?storyId=16281892) we're talking about 2% of US oil consumption and .5% of world consumption. To be sure, the US military consumes massive amounts of oil, but war-time increases are very unlikely to have anything to do with oil prices now.

    Now, one might try to attribute the rising cost of oil to the war on the basis of oil production in Iraq. While this might have made some sense during much of the war, oil production in Iraq is now up to pre-war levels (http://news.bbc.co.uk/2/hi/business/7144774.stm).

    I do think there is truth to your second contention. The war has done a number on the US economy, especially when combined with misguided tax cuts and a overall weak economy. This has in turn hurt the dollar significantly. The falling dollar, plus increasing demand for oil from the developing world (particularly India and China), have caused an increase in oil prices. Now if OPEC decides to shift pricing to euros, we'll all really be screwed on this front.

    While I agree that we have to move away from oil or risk facing serious environmental and geopolitical consequences, oil consumption globally will continue to rise for quite some time. There is simply no other fuel that will keep the Indian and Chinese economic booms (and consequent rises in overall consumption) churning along, based on current infrastructure and technological capability. We need to plan for the future but recognize that things will get bad before they get worse.

    And if oil supply or demand dries up, we'll be seeing huge and tumultuous shifts in the political alignments of the Middle East. I think this is probably inevitable, but our patterns of consumption will have an impact on the timing of this occurrence, if nothing else.
     
  13. nbs2 macrumors 68030

    nbs2

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    #13
    I think you misunderstand the concern. Corporate bankruptcies on a small scale - absorbable; personal bankruptcies on a small scale - absorbable; coroporate bankruptcies on a large scale - lead to personal bankruptcies on a large scale as many are out of work and cannot afford the basic costs of living and thus bad.

    I'm not sure how the tourism industry is "undoubtedly irresponsible," but car service centers would be heavily hurt as people operate their vehicles less and less. In fact, I wouldn't be surprised to see people simply neglect to service their vehicles - creating more dangers than we have now. Additionally, the industry is large enough that you would see a significant number of people lose their jobs - less service work means less shops and less parts which means less demand for parts and fewer factories.

    If you have ever watched a frieght train, you'll notice that you can hear it sounding the horn on intersection approaches long before you can see it - by the time you can see it, it is too late for it to stop. When trains do try to stop as fast as they can, you can end up with a fair bit of damage to the goods it is carrying, and the occasional derailment. Momentum, inertia, and all that other physics goodness is just too magical. That's the American economy. Can we ease into change? Yes. Trying to make an immediate turnaround would require grinding to a halt, and the economy is a lot bigger than a freight train.
     
  14. CalBoy macrumors 604

    CalBoy

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    #14
    I think that's stretching it a bit too far.

    Gas taxes would have impact, but I doubt very many more people would suddenly fall into bankruptcy. In all likelihood, the reaction would be similar to the current problem of escalating gas prices: people would consume less.
    And that's why I didn't include that generic category. ;)

    However, as a whole, the tourism industry has been about as irresponsible as most other industries because until recently (as in few years), gas was immensely cheap for everyone in this country. So the tourism industry is on par with the average industry in regards to environmental policy.
    Yes, but it would not be an overnight sensation. The decline in customers would follow a roughly proportional line to gas prices, and, over time fewer and fewer repair shops would enter the industry and vastly more will exit.

    It isn't going to suddenly collapse under its own weight.
    And if we move quickly, we can retrain those workers to be public transit workers, driving buses, light rail lines, etc.

    It's very much a false economic argument to suggest that the end of the automotive industry will spell doom and gloom for the American economy; it is merely part of the propaganda which has kept Americans in their cars for so long.
    I don't care for this analogy; it's fraught with logical problems.

    To imply that an economy and a nation's livelihood is analogous to a train is quite false. Economies aren't "headed" in any particular direction, and unlike trains, don't need to be on one set of tracks.

    The American economy, as diversified as it is, should be more capable of changing direction than any other economy. In fact, it is more than capable of becoming oil independent within 25 years. The only question is, are we willing?
    I don't think I said an immediate change was necessary. I do, however, think that a higher gas tax is necessary NOW. Incremental increases based on the price of gas need to be put into effect, and those revenues need to be put into building more mass transit for urban centers and for the creation of more housing units closer to urban areas via subsidization (so the mass transit can be used at or near capacity).
     
  15. Ugg macrumors 68000

    Ugg

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    #15
    Perhaps I should have written "could" instead of "would".

    I'm no fan of the spend til you drop policies of the bush administration but weaning us from our addiction is going to take a few bucks.

    The instability in Iraq is partially what has caused oil prices to rise along with 3-4 years of lowered Iraqi production during a time of increased demand.

    I definitely hope that the current high prices aren't a bubble. China will have to do something about their fuel price controls. My guess is that it won't happen until after the Olympics. China's demand for oil has been affected by the lack of supply. It'll probably take off even with the inevitable higher prices.

    India is also on a roll forward and the cachet of automobile ownership will only increase demand.

    Couple those two countries 'increased demand with lowered production in the North Sea, The Gulf of Mexico, Nigeria, etc and there will have to be a lot of new and extremely productive wells drilled in order to make up the difference.

    However, if the US has the balls to show the world that it's serious about reducing its gluttony for oil, prices may not skyrocket.

    Since we consume ~25% of all oil produced, the only way to rein in global prices is to reduce our demand significantly.

    The US still has a lot of influence around the world. We better make use of it before it disappears.
     
  16. Desertrat thread starter macrumors newbie

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    #16
    From me: "But, yes, adding $1.25 to today's $4.00 gasoline would definitely reduce usage. It would also cause a helluva lot of bankruptcies, at this point in time."

    Calboy: "I don't mean to come off as callus, but who cares? Only those industries that are incapable of adaptation and flexibility would suffer. True business innovation would still thrive, as it has in every other economically advanced democracy."

    That sounds good, but people actually do have jobs in restaurants and motels. Not to mention booking agents and others in the world of tourism. Concession people in parks, e.g. Jobs in the mom'n'pop groceries and such. In a contracting economy, that means not paying on the time-payment plans that a high percentage of all people are using. I'm not into "Let them eat cake," myownself. A Marie Antoinette I'm not.

    Me: "Then there are the motels and the various business which cater to folks on the road. Car repair shops, etc. And don't forget Winnebago's employees."

    CalBoy: "Why should we care about industries that are undoubtedly environmentally irresponsible?"

    How is a motel or car repair shop environmentally irresponsible? Or Winnebago, for that matter? The RV crowd tends to go somewhere and then stay parked, driving around in a towed-behind Honda Civic in local travel. They drive many fewer total miles per year, and use less electricity than most homes.

    You can carry this environmental purity thing just so far before it becomes ridiculous: http://wondermark.com/d/404.html

    When high prices in a certain sector of the economy lead to job losses, this is a mix of monetary loss to the private sector and the public sector. Given that our entire society has been built upon the availability of both cheap electricity and cheap liquid transportation fuel, it seems obvious to me that a high cost of liquid transportation fuel is seriously bad news.

    Restaurant chains are already going broke. Independent truckers are parking their rigs. The costs of anything that must be delivered to your local grocery is going up via transportation surcharges. Or to your clothing store or to your outdoor sports store.

    Petrochemical products are going up; Dow Chemical by 20%. That's the plastic in an econocar or your cellphone. I imagine that DuPont will raise prices about as Dow--which means ripstop nylon and Sweet Thang's undies will cost more.

    That's less disposable income, nationwide.

    You add a gas-tax hickey on top of what's already happening, and your job might well be next.

    By the bye, it is my understanding that the gasoline tax in California is a percentage tax, like the sales tax. Other states have flat-rate taxes as do the feds. Sales taxes are regressive on the poor, although that giant corporation called "government" is benefitting. :) However, I doubt the increase in the sales tax on higher-priced gasoline offsets the cost of state usage.
     
  17. CalBoy macrumors 604

    CalBoy

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    #17
    Again, you speak as if 100% of these jobs will disappear with a gradually increasing tax-they won't.

    A percentage of the industry will suffer because those particular companies were probably not being responsible to begin with. Those that adapt quickly and make sufficient changes to their business model to accept the fact that gasoline is expensive will survive and retain their employees.

    It's also short-sighted to imply that all American travel agents will loose their jobs because of a drop in American tourism; there are other places in the world to see.

    And, for the coup de grâce, every other industrialized economy has already done this, and their tourism industries are still going quite strong (aka France, the UK, Japan, and many others).

    We've got to start somewhere, and it must begin with a gradually increasing consumption tax, for that is the only effective way to curtail demand.
    And yet the irony is that by not implementing a gas tax, you would leave the people to suffer at their own stupidity. What happens in ten years when gas has hit $15/gallon? What solution are you going to pull from your magic hat to appease the people?
    Motels and repair shops form the auxiliary car industries. Their survival means that we will continue to consume unhealthy amounts of fuel.

    They have the potential to have a place in the non-petrol economy, but only if they are willing to adapt themselves to that economy. At the moment, they encourage increased consumption of both cars and fuel, and are thus irresponsible industries because of their strong tendency to drive bad forms of consumption.
    Yes, because most RV owners don't ever return home. :rolleyes:

    Many, many people (I'd argue close to half or possibly more-though I wouldn't know where to get such information) use their RVs as a means to a vacation. This style of consumption is going to lead to more energy waste than a standard method of traveling around.

    I also wouldn't try to justify an RV by comparing it to an inefficient home. American homes have a lot of room for improvement as well, but that is neither here nor there.
    I'm glad you're willing to have an honest and frank discussion about this, since I clearly want the American economy to denigrate back to 14th Century standards. :rolleyes:
    Well then, I have bad news for you: it's going to happen either way.

    Question is, one whose terms? Yours (aka ours as a nation) or theirs (aka oil rich nations, India, and China)?

    Seems pretty unpatriotic to me to give that choice to the enemies of freedom.
    That's because most of them serve horrible food. Don't blame that on gas prices. :p
    Yes, and we have to be willing to make that sacrifice in the short term for long term protection.

    Think of it as buying your first home; it takes sacrifice in the beginning, and you give up a few luxury items, but within a few years you're building equity and have a secure future.

    Doesn't matter to me; I'll be school. ;)
    Yes, and there's little reason why that's the way it is (oil companies paid handsomely to secure that advantage in DC and most states).
    Sales taxes are regressive, however, the point of this tax would be to control demand, not to fund government. The funds set aside with this money would only build and improve public transit, thereby helping the poor and anyone else who may find it difficult to drive their car.
    I'm not sure what you mean by "state usage," but read my previous statements. The key the tax is the effect it has on consumption, not government coffers.
     
  18. Desertrat thread starter macrumors newbie

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    #18
    CalBoy, I'm not claiming "all", in this job loss thing. Not "all" lost their jobs in the 1930s. ("Only" 25% did.) What I'm saying is, we're in a recession that's going to get worse because of ongoing job losses in those sectors which can't deal with the higher costs of petroleum-related inputs.

    You might not have meant it the manner in which I read it, but your comment about job losses in "environmentally impure" businesses implied, "Yeah, well, tough stuff, fella. I don't care if you go broke, you shouldn't have been working there." I don't suggest saying that face-to-face to a guy who's just been laid off.

    "Sales taxes are regressive, however, the point of this tax would be to control demand, not to fund government. The funds set aside with this money would only build and improve public transit, thereby helping the poor and anyone else who may find it difficult to drive their car."

    While you may well want it that way, it won't happen that way. California now has a deficit of some $17 billion. Any new income will go into the general fund. You go ahead and guess how long it will be before that deficit is overcome.

    'Rat
     
  19. CalBoy macrumors 604

    CalBoy

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    #19
    Then provide more solid quantification of your estimate of job losses.

    What impact do you think a gas tax will have on the economy?

    I don't want generalizations like "some industries will suffer" or "people will loose their jobs!" because these don't advance the discussion any further.

    Or perhaps it's best to be honest and simply state that you don't know the extent to which the economy would "suffer" under a gas tax. I think that is a far more reasonable answer, seeing as how for the moment you're grasping at straws by throwing out the motel industry, repair shop industry, the RV industry, and the travel agent industry.
    Well isn't that something. I suppose you know better than the First Quarter results that were released a few days ago?

    We saw very, very weak growth in the economy last quarter, not a contraction. So, the earliest anyone, including you, could know that we're in a recession is December.
    Again, if we do things correctly, we can foster new industries that will not only show older industries how to survive without gas (or with less of it), but we can usher in a new set of industries all together.


    It seems that so far your position is based off of jobs that "could be" lost, as opposed to dealing with the certain crisis that is staring at us in the face right now.

    Out of curiosity, what exactly would you suggest to wean the country off of oil and reduce per capita consumption?
     
  20. shu82 macrumors 6502a

    shu82

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    #20
    Caliboy, what you don't understand is that fuel use is "inelastic" in the short term. Example:

    I burn 10 gallons of gas a week going back and forth to work, exactly. This now costs me $40/week or about 2K a year. Your tax would raise my expenses up to $2.5k a year. Now how would me spending $500 more a year, would make me or anyone in America change the way we do things.

    Change is expensive. I could keep driving the car I already have paid for that gets 30 mpgs. Lets say I can buy a car that gets 60 mpgs, with my current one as a trade in for 10K with no interest(just for ease). That would make my payment with a 5 year note about 2K a year. Now do the math. For this decision to become economically feasible I would have to be spending $4K/year on fuel. In other words gas would have to be $8.00 a gallon!

    Now here is what this tax would really do:

    Joe makes 30K a year. 7K goes to taxes. Joe takes home 23K a year. His mortgage and bills total about 1500/mo. or 18K/yr. Joe has 5k/yr. or 415/mo. to feed/clothe his wife and kids. He already has his $160/month gas cost worked into his budget(1500/mo.). Your tax raises his fuel expense to go to work by $40 a month. This reduces the amount of money Joe has to feed/clothe his family by 10%. He does not have the ability to do any change to affect the amount of gas he has to buy to earn a living. He just has to deal with it.
     
  21. Ugg macrumors 68000

    Ugg

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    #21
    Why did you choose to live so far from where you work?
     
  22. shu82 macrumors 6502a

    shu82

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    #22
    Simple cost/benefit analysis. It is the same decision people have been making for the past 50 years. My commute (30 minutes/miles) is on average with most americans. Most city schools have turned to crap, didn't want to worry about crime, the "safe" area's of the city are out of reach for most middle class families. So, to the burbs we go! We are the one's feeling the pinch, not the inner city poor and of course not the rich.
     
  23. CalBoy macrumors 604

    CalBoy

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    #23
    We're not talking about the short term; we're talking about the medium to long term. I don't doubt that some will suffer in the short term, however, their minor suffering and growing pains will be far less than the suffering of those in 10 years when oil has gone to even more record highs and this country still hasn't done anything to address that issue.

    Discuss the long term. There has to be some mechanism to make people consume less oil and adopt other means of transportation that aren't oil-reliant. Seeing as how (and this would be the 3rd time I've mentioned this now) EVERY OTHER economically advanced democracy in the world already does this and has successfully weaned most of their populace off of dramatic oil consumption, there's no reason why the US can't do the same.

    Giving me some sob story about hypothetical Joe (does he work in the RV industry as well? :rolleyes:) doesn't change the fact that the gas tax is the right way to go.

    Unless of course you value political pander over results, in which case, I understand your position quite well.
    What car do you drive? If it's a standard sedan, that means you're working roughly 25 miles away.

    If so, why don't you drive a more economical car? Or carpool? Or take public transit?

    If there isn't any good public transit where you are, why don't you get the ball rolling and bring it up at your next county meeting (or city council meeting, whichever happens to have authority)?

    Well not exactly. The tax would be partially based on locale so as to reward public transit users and punish urban drivers.

    The Bay Area, for example, would have a high gas tax because public transit exists in most areas, especially San Francisco, Oakland, and San Jose. Alabama doesn't have a sufficiently large urban center to support similar systems, so those drivers wouldn't be taxed as severely in the short term. In the long term, however, the rate would slowly creep up so as to constantly encourage drivers to live closer to work and drive more efficient cars.
    The fact is, it does change behavior quite dramatically. When people are forced to vote with their wallets, they seem to make the decisions that are in their best economic interest.

    For example, if there was a bus that could take you to work (hypothetically-although I bet there is one currently running that route isn't there?), and you've avoided it for the moment because it takes 20 minutes longer and doesn't save too much (maybe only 50 cents per trip), you wouldn't bother with it. If, however, the bus ride would suddenly save you $2 per trip, you would undoubtedly be more inclined to take the bus as it would save you upwards of $20/week.

    That's the same behavior one sees on a macro level in every other wealthy nation. It isn't coincidence that the wealthy nations with the fewest MPG requirements (called CAFE standards in the US) are those with the most fuel efficient cars. The reason? The government doesn't need to pass regulations when gas taxes accomplish the desire.

    If you want to know more about the phenomenon, I suggest you find out more about David Vogel.
    Never said it wasn't.

    But, not changing will be deadly.
    This isn't about trade-ins, it's about when that car becomes too old for use. At that point in time, you're going to choose a more fuel efficient car because you know you must.

    Joe needs to take the train once in a while. ;):p

    Seriously, I don't dispute that it will create a short term contraction for some, but, it is a worthwhile investment for the future. If Joe cares about his kids, he'd be more than willing to put up with the tax and drive less (or more efficiently).

    Gee, thanks for the patronizing remarks. :rolleyes:

    For whatever it's worth, I do commute on a daily basis, but I don't have to worry about gas prices because I take the trains. And, as a fairly young person, I'm glad that gas prices are rising and hope that they rise even faster than they are now. It seems to be the only way to get people to stop driving large SUVs and take more public transit (I've seen a lot more people on the trains the past few months).

    I don't want to deal with this issue in ten years when it will be much harder to fix; it's time for America to take its medicine.
    I've likely taken more economics classes than you have, but again, thanks for that patronizing remark.
    That's ok, I don't blame you for your shortsightedness either. ;)
    Is it standard for parents to not want something better for their children?
    I was going to ask this as well, and then saw that shu82 has given us the answer.

    I'll just say that white flight was at one time possible (from an economic and transportation point of view); it no longer is. The sooner that's learnt, the better.
     
  24. Ugg macrumors 68000

    Ugg

    Joined:
    Apr 7, 2003
    Location:
    Penryn
    #24
    Add bad schools to the list of casualties of cheap oil.

    Had fuel been slightly more expensive since wwii, there's a good chance that most inner cities would have remained viable over the years.

    We reap what we sow.
     
  25. shu82 macrumors 6502a

    shu82

    Joined:
    Jan 10, 2007
    Location:
    Rocket City, AL
    #25
    Sorry about that last paragraph calboy, I tried to delete it but you caught it. Anyway I do have an MBA and have taken 15 hours of undergrad and grad level economics. I am not talking out of my behind. Also, I drive an eclipse, it gets about 30 on the interstate for my commute. And when my old roommate from college moves to Japan this winter, I am buying his Echo. Not for any higher reasons than that its just more economical and my car is getting old.

    But don't get me wrong, I would give my left nut to drive an electric car to work every day. Its something I have been following for a long time. Its just the premise that we must force taxes down peoples throats really bugs me. It just means more cheap, oil for China and India, boosting their economy while dragging us further down.

    These things work themselves out naturally. Just as I will purchase a more economical car when it is time for a new one, so will everyone else.
     

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