After reading a number of gas tax diaries, by Jerome a Paris, Dauphin, enrique avalos, and commenting in some, and getting lectured to for being an out of touch wealthy inner urban yuppie ...
Look, reality sucks. We are living in a country that is living beyond its means. Sure, much of the benefit of our country living beyond its means has been sucked up by the top 1%, and "we" haven't received it ... but its a national economy, and when the crash comes from the unsustainable external balances over the past fifteen years, you can be damn well sure that when its pain being distributed rather than pleasure, "they" are all of a sudden going to be eager egalitarians and make sure that even the poorest among us get to share in the pain.
Our leadership has screwed the pooch in so many ways over the past thirty years, that living in wishful thinking fantasy land is only an option if you don't give a damn about the country that we leave to our kids.
And the gas tax debate brings that out into very sharp relief.
Note: This Diary Augmented With Blagojevich Adjective Technology, so don't fucking read it if you can't take that kind of shit.
Can we afford this much sloppy thinking
This is not an argument over whether a blown call by a ref spoiled the season of a favored football team. This is an argument over whether we are going to continue to be among the high average standard of living countries in the world, or are going to collapse from great power to poor neighbor, as Spain did a couple of centuries back.
For the argument on putting on a gas tax and then "spending the money on useful stuff" ... give me a fucking break. If its really useful stuff, in the sense of being an investment in the recovery and rehabilitation of our economy, why in the hell would we need to fund it with a tax?
If you have not been paying any fucking attention, the Tuesday Treasury Bill auction say people accept a ZERO PERCENT return on Treasury Bills. Even the Wednesday 3-year auction saw a record $28b sold at an interest rate of 1.245%.
If we got something we can do that will benefit the economy over the long haul, just fucking do it.
The only gas tax that would make sense right now would be a gas tax where we give all the money right back as a social dividend. Since gas taxes are regressive, that social dividend would have to be just an equal amount to every citizen, "man, women, and child", living in the country.
We can't afford a gas tax? Like we can afford the current disaster?
For those arguing for the current situation, get real. In Europe, where they had more than 100% gas taxes during the ultra-dirt-cheap crude oil years, they saw their price of gas per gallon hit $10/gallon, after currency and metric unit conversion.
But when you are paying $7/gallon, and have adjusted the way you live and move around to $7/gallon, a jump to $10/gallon, while painful, is not going to cause the kind of massive pain I saw this summer.
By contrast, the US policy to massively under-tax gasoline meant that people who were had built a lifestyle around $2/gallon gas were already struggling when gas hit $3/gallon, and were in a world of hurt when it hit $4/gallon.
The policy to continue subsidizing car transport is a policy to make sure that we continue to experience this pain ... and worse when the price hits $5/gallon, and even worse when it hits $10/gallon.
And those of you who can both afford to buy a car and drive it will keep buying cars that in 2018, nobody will be able to afford to drive, even if they pick it up for free.
A gas tax adds to price when demand is limited, not when supply is limited
Who pays the gas tax anyway?
Well, in times like the present, when demand is the limit, and gas is selling for around the production cost of the marginal barrel, the gas tax is added on top of that production cost. So when gas prices are as low as they are going to be, the buyer pays.
And under a gas tax or crude oil import tax with social dividend, that means the price does not fall as far, so fewer people will get suckered into thinking that "the crisis is over, things are back to the good old days".
In times like this summer, when supply is the limit, the price has to be high enough to cut demand back to available supply. And it takes a really steep price increase to do that, because we are heavily addicted to oil as a society, and because even for those societies not as heavily addicted, oil is such a highly-concentrated source of energy to get things done.
And under a gas tax or crude oil import tax ... with a social dividend ... that means that the price is the same price. Its just that less of the price ends up as a windfall gain to the oil company, and more of the price ends up going somewhere else.
Obviously, where that windfall gain should go is to the American people who have to bear the burden of adjustment to that demand destruction. And the social dividend makes sure that this is exactly what happens.
But you, of course, live in X and have the money to do Y, and so ...
One thing that crops up when gas taxes are raised as an issue is people reacting to the "threat of gas taxes" by forgetting to play the ball, and playing the man instead.
I am not going to link to them, but just this past two days I have been lectured for looking down my nose at poor people, and for not understanding life for people outside my big city.
For people arguing against a gas tax ... stick to trying to understand the arguments, and address the arguments. Because if you start arguing your uninformed moronic stereotypes, you risk making attacks that are massive fail.
That is, when your target is laughing at you for how fucking silly your argument sounds, that is not a very effective point you made.
And let me hasten to stress ... I am not saying you are uniformed and moronic, I am saying your stereotype of someone who supports a gas tax or crude oil import tax with social dividend, that stereotype is uninformed and moronic.
That is, of course, a rhetorical bullshit trick, since all stereotypes are always uninformed and moronic. The stereotypes that you suburban types and you city types have about us small town and country folks, they are uninformed and moronic. The stereotypes that we small town and country folks have about you fat, lazy suburban slobs and effeminate, slick, sack of shit city folks ... are uninformed moronic bullshit.
That's what a stereotype is. A cardboard cut-out to replace finding out what someone's life is like and what their circumstances are, which is a lot of work, with a lack of thought that fills the same hole that a thought fills but requires much less work.
I grew up in exurbia before they got around to naming it. To get anywhere outside our small three street exurban development, I had to ride on the gravel and dirt shoulder of the state route to get to country roads, and then ride some more. We took the school bus to school because it would have been six hours walking to elementary school, and more walking to the three-township high school.
And on the stereotype supporters of gas taxes are all wealthy professionals who don't understand what its like for ordinary middle class Americans ... I'm incredible lucky that I have a small amount of work available in riding distance now, but last December I was riding a bike more than two hours in freezing weather to get to a minimum wage plus a quarter job slinging boxes and buckets of paint around to barely meet my college loan payment. If I could have afforded a car, I definitely would have bought one, but that wasn't an option. If I could have caught a bus there, I definitely would have done it ... but the only intercity bus goes a different direction, and the call-a-ride bus is for office workers, not factory or warehouse workers ... it doesn't start running until the first shift bell sounds.
So don't be fucking surprised if I tell you that you can take your city dwelling, Prius driving stereotype, shove it right back up the ass that you pulled it out of, climb into your draining the life out of our country's economy gas hog, and keep driving until you find somewhere to dump it that needs that shit.
Now, yes, of course there are people who moralize about the gas tax, and of course there are people who don't understand that a working family cannot just change their lifestyle at the drop of a hat, and of course some aspects of your uninformed, moronic stereotypes are correct for some fraction of the people you are talking about.
But tackling the people who support a gas tax without thinking it through completely doesn't lend you any credibility. The strength of an argument is not whether it knocks over the weakest, least well thought out, most reflexive opposing views, but whether it knocks over the serious opposing views.
A Gas Tax is not Enough
Putting a serious Gas Tax in place is an urgent necessity. We need to reduce the size of the swing in gas prices before the next oil price shock hits, because otherwise we are in a serious risk of a very rocky road indeed, with recovery leading to supply shortages leading to prices going high enough to throw us in recession, leading to surpluses and prices dropping back to cost of production, and around and around again.
Its just a rockier road we are going to be riding on, and we are basically driving on our springs with broken shock absorbers. We need to install stronger shocks.
But its just one of many urgently needed policies. Another urgently needed policy is to shift the price gap between newly produced gas hogs and fuel efficient vehicles. We need something like a 20% excise on all vehicles below current average fuel efficiency, and a 20% rebate on all vehicles with twice the current average fuel efficiency.
And even that is just a muddling through policy ... we also need policies that reduce the percentage of the population that cannot get by without driving for almost every trip. The gas tax is something that a car-dependent society urgently needs to be able to manage the oil price shocks that come with peak oil ... but over the longer term, we need to kick our oil addiction altogether.
We consume about a quarter of the world's crude oil, produce about a twelfth, and have about a fiftieth of total world reserves. So we are not only living beyond our resources, but also burning through our own resources faster than we are burning through the resources of the rest of the world. That is just not a sustainable long term picture.
So there is the electrification of STRACNET, reforming the zoning regulations that forbid walkable village clusters in most suburbs, construction of dedicated electric transport corridors within ten miles of 80% of the population, and all the rest of it.
The gas tax is not about that. The gas tax is about the short and medium term of keeping our economy together long enough so that we have time to build the new oil-independent, car-optional society.
UPDATE: "What fucking amounts you talking about, here, you fucking hick economist?"
NB. I should have fucking used Blagojevich Adjective Augmenting Technology(TM) for my fucking Current Account Blow Out diaries.
Say, start at a nickel, add a nickel a month, stop when it hits $4.00 (inflation adjusted), add another nickel any month as needed for inflation adjustment.
The US uses over 300 billion gallons of petroleum or petroleum products, or over 1,000 gallons per person. If its a wholesale tax, that would be a first month payment of around $4, rising to around $48 at the end of the twelfth month.
If forward finance of energy saving purchases cannot anticipate increases in social dividend payments, a four year loan at 8% financed entirely by $48 out of the social dividend payment would cover a purchase of over $1900.
By the time it reaches $4/gallon, the social dividend is around $300/month, which on a four year loan can contribute $12,000 toward a qualifying energy saving purchase. On a seven year loan for a qualifying high efficiency car, it would be over $20,000 contribution from the social dividend, at an interest rate of 8%.
Me, I'm buying a top of the line Schwinn electric bike, and then I don't know what more energy saving I can do, so I'll just have to spread the good cheer around the local economy. Unless I spring for a solar water heater for my mom's house, so they don't have to worry so much about natural gas prices spiking.