Populism
Alright, so Mrs. Clinton has managed to piss me off, together with her alternate, John McCain... leaving only Obama standing, a concept I have been studiously avoiding.
Eliminate the gas tax?
What the hell?
I am not fervently waiting for the one politician who will stand up and have the balls to say that now, right now, is the absolutely perfect time to RAISE the gas tax. Oh yes.
Why?
A number of reasons.
One, Joe Q Public is already adjusting to lower consumption and higher prices. Lower consumption is good, I think everyone agrees. This country would certainly benefit from less SUVs. Of course higher gas prices aren't fair; I'll still be driving my 19MPG sports car even if gas doubled to $8. But those folks who are driving gas guzzlers just barely affording gas costs would be forced to ditch them, and the net effect will be quite positive. It's already happening, anyway, so why not accelerate the process? Furthermore, high oil and gas prices encourage alternative energy, and in particular, make nuclear look really tempting. And nuclear, especially if we build both conventional and breeder plants, is a solid way to make the future a bit easier (and make feeding electric cars actually feasible if done on a large enough scale). I would really hate to kill all this momentum.
Two, psychologically speaking, adding 50c per gallon when gas is at $4 is a lot easier than when it is at $2. Of course, tax-wise, the impact is more or less identical. But percentage-wise it's a lot smaller. So it might be easier to slip by Joe Q.
Three, the government is already bankrupt, but it has at least a few more years of pretending not to be. We need infrastructure projects, especially rail. What better way to fund them than with a gas tax hike? it won't decrease discretionary spending but at least give us some results while the dollar can still buy labor and materials. JQ would appreciate having more high speed trains and metros, especially if they are going to stop using the car due to higher gas prices. As a side note, not that any decrease can really do much at this point, in a strange sense increasing spending is logical if you expect to default soon. Consumers and businesses do it all the time. No, I don't think we'll see hyper-inflationary depression as some pundits predict, but the reason is not that they are fundamentally wrong, but that western economies are so intertwined at this point that (and I'm just guessing here) the leading ones - the G8 plus maybe a few others - will act in pretty radical ways to share the pain (debase their currencies, allow "structured" defaults etc). But that's another topic.
Four, if we raise taxes on gas at the stations, we will find it a lot easier to tax Exxon and co at the same time. It's a double whammy. They can't very well complain about having to pay more tax on their insane profits if at the same time consumers are also being made to pay more, now could they? just make sure the money is reserved in ironclad fashion for infrastructure - and sign those contracts quickly, before dollar devaluation and/or inflation erodes any of these tax gains. Yes, I still think the dollar will get stronger in the short term against certain currencies, especially the euro which is shaping up to be just as useless economically speaking (just lagging a bit), but long term, "third world" currencies (get used to dealing a lot with the Real and Yuan) will appreciate quite a bit faster. The same holds true for the peso, where a lot of the folks building those infrastructures will be converting some of their dollar earnings to. Thus, the quicker the better.
Five... well, isn't it always the trick to be a contrarian?
Eliminate the gas tax?
What the hell?
I am not fervently waiting for the one politician who will stand up and have the balls to say that now, right now, is the absolutely perfect time to RAISE the gas tax. Oh yes.
Why?
A number of reasons.
One, Joe Q Public is already adjusting to lower consumption and higher prices. Lower consumption is good, I think everyone agrees. This country would certainly benefit from less SUVs. Of course higher gas prices aren't fair; I'll still be driving my 19MPG sports car even if gas doubled to $8. But those folks who are driving gas guzzlers just barely affording gas costs would be forced to ditch them, and the net effect will be quite positive. It's already happening, anyway, so why not accelerate the process? Furthermore, high oil and gas prices encourage alternative energy, and in particular, make nuclear look really tempting. And nuclear, especially if we build both conventional and breeder plants, is a solid way to make the future a bit easier (and make feeding electric cars actually feasible if done on a large enough scale). I would really hate to kill all this momentum.
Two, psychologically speaking, adding 50c per gallon when gas is at $4 is a lot easier than when it is at $2. Of course, tax-wise, the impact is more or less identical. But percentage-wise it's a lot smaller. So it might be easier to slip by Joe Q.
Three, the government is already bankrupt, but it has at least a few more years of pretending not to be. We need infrastructure projects, especially rail. What better way to fund them than with a gas tax hike? it won't decrease discretionary spending but at least give us some results while the dollar can still buy labor and materials. JQ would appreciate having more high speed trains and metros, especially if they are going to stop using the car due to higher gas prices. As a side note, not that any decrease can really do much at this point, in a strange sense increasing spending is logical if you expect to default soon. Consumers and businesses do it all the time. No, I don't think we'll see hyper-inflationary depression as some pundits predict, but the reason is not that they are fundamentally wrong, but that western economies are so intertwined at this point that (and I'm just guessing here) the leading ones - the G8 plus maybe a few others - will act in pretty radical ways to share the pain (debase their currencies, allow "structured" defaults etc). But that's another topic.
Four, if we raise taxes on gas at the stations, we will find it a lot easier to tax Exxon and co at the same time. It's a double whammy. They can't very well complain about having to pay more tax on their insane profits if at the same time consumers are also being made to pay more, now could they? just make sure the money is reserved in ironclad fashion for infrastructure - and sign those contracts quickly, before dollar devaluation and/or inflation erodes any of these tax gains. Yes, I still think the dollar will get stronger in the short term against certain currencies, especially the euro which is shaping up to be just as useless economically speaking (just lagging a bit), but long term, "third world" currencies (get used to dealing a lot with the Real and Yuan) will appreciate quite a bit faster. The same holds true for the peso, where a lot of the folks building those infrastructures will be converting some of their dollar earnings to. Thus, the quicker the better.
Five... well, isn't it always the trick to be a contrarian?
posted by Blinkered at 10:38 PM
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