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Comment by donatj | Hacker News Reader

The price of gas is linked to the price of everything through shipping and transport. The lower the price of gas, the stronger your buying power. There's no upside to a high price of gasoline.

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That's why it should be revenue-neutral. Every dollar the government brings in via higher fuel taxes, it should offset by reducing taxes somewhere else.

The average fuel consumer breaks even. People with low carbon footprints come out ahead. People with abnormally high carbon footprints lose. Seems perfect to me.

Except for decreased usage of gasoline and thus a decrease in the externalities of using gasoline.

A decrease in gasoline usage is by definition a recession. It is people being unable to be productive.

No one stopped buying gas at $4 a gallon but they did stop spending money elsewhere to make up for it.

That's not true! I specifically remember reading, back when gas broke $4 a gallon, that we had finally discovered the price at which drivers change their habits. Below $4, rising prices just made them complain. But above that price, we started seeing statistically-significant changes in demand.

I think you're right there is a tipping point. I do feel that there is a flex point where drivers change recreational driving but they will still need to get to work and the grocery store. They won't go on fun trips though.

Vehicle miles driven went down during that time period. Additionally, there was an increase in the sale of more efficient vehicles, so people indeed did buy less gas.

You know what was awesome about $4 gasoline? $3.75 heating oil.

It will definitely strongly affect the type of car I buy next when I'm done running the current one into the ground.

To clarify or perhaps nitpick, if the price of gas included the cost of its damage to the environment (and all other current externalities), then there would be no externalities, and decreasing the usage of gasoline wouldn't be a desirable economic goal.

Right, but then, that's exactly the point of taxing it, which the parent commenter was recoiling from, because it raised prices. :)

There's some interesting evidence of gasoline being a giffen good for some segments of the market: budget constrained will spend less on vehicle maintenance when the price of gas goes up, thus lowering their vehicle's efficiency, and buying more gasoline.

You're mixing up price and value to an extent. The money's not being set on fire, it's going to other useful things. The question is whether those things are worth more or less than discount gasoline.

It's largely being set on fire through bureaucracy in practice. I would get much much more out of the money myself than I do from the government.

Let's say this costs me a thousand dollars a year out of pocket. I could get a new computer and add a lot of value to the economy. Or the government could buy a square foot of pavement.

it's your taxes that build the systems that allow you to buy that laptop

It's also affordable energy building and sustaining those systems.

Of course there is: the more people can't afford to meet their own needs, the more people will be dependent on government programs.

Oh, wait, you said "upside"...

"No upside to a high price of gasoline." This is not true.

In no particular order, and off the top of my head, the rapid disinflation in the price of oil is currently:

1. Wreaking havoc on the budgets of most oil exporting nations. 2. Destroying purchasing power through currency devaluation in Russia, Nigeria, across the Middle East and Latin America. 3. Crushing the economies of parts of Canada, Alaska, and the Dakotas. 4. Directly causing job losses in Texas. 5. Negatively impacting the Houston office markets. 6. Destroying earnings of publicly traded oil companies. 7. Reducing stock market valuations of said companies. 8. Reducing portfolio values. 9. Impacting earnings of banks that have extended credit to oil firms.

Yeah, but my portable building factory is shipping more often. People have less of a delivery fee to pay and it makes them more likely to purchase.

Additionally, my materials costs have been slowly dropping as their shipping costs are dropping.

Win - win!

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