Sunday, April 1, 2012
Gas..Answer to Prices
This was an interesting article where Mr. Thaler is speaking on the topic that everyone talks about. Everyone always says "why does our president not just lower the price of gas?" Well it isn't economically smart, Mr. Thaler says that if we can just set a price for gasoline why would we not price set for other products as well. To lower our consumption of oil the government is speaking on the idea of imposing a tax on gasoline to give people who have fuel-efficient cars an incentive.
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4 comments:
I think that this is a good thing, however unpopular it may be. In order for us lower our dependence upon oil and begin to incrementally shift towards alternative energy uses we need to set up a disincentive for using gasoline or even producing products that use gasoline.
All of this gasoline prices talk gives me headaches! Hopefully we can come up with some other form of energy because these gas prices are making travel extremely difficult. I know I don't want to be paying over four dollars a gallon while making a thirty minute trip to work. It certainly puts a hurt on the wallet.
I think providing an incentive for people who have fuel efficient cars is regressive tax that will hurt the well being of the poorest in the economy that can not afford to upgrade there cars in this troubling economic time. By promoting more fuel efficient cars it will reduce the demand of gas and in theory will reduce the price of gas. But when we look at the market of fuel as a whole will improving the fuel efficiency really have that much impact on the price of fuel? At best this reduce overall oil use age by a few percentage point and will take months, even years for this effect to seen in the system. Gas prices have a huge effect on the average American's budget if the government is looking reduce the strains on Americans income they should look at ways to add to supply.
This perspective, although is different than other opinion, is reasonable to a certain degree. Other than supporting the oil industry and therefore make the oil price in control, to control the use of gasoline through pricing might be another solution of the current problem. In other words, the aggregated effect will alleviate both the burden of the government and the (economic) burden of the consumers.(If more people change to taking public transportation, they will save more money.)
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