Quote:
Originally Posted by trebuchet03
???
What they're arguing is what is taught in econ 101 basics. If we were to completely remove the gas tax, the demand curve will shift up - increasing consumption and thus increases the market value. Increase, the demand curve shifts down - this decreases consumption and market value decreases. The same thing happens when you tweak the cost per unit supply curves (such as the 70's gas crunch - note the number of econo-boxes that came out of that era  ). |
Actually, what is taught in econ 101 and higher courses is that for a given market item, if the demand is elastic, that increases in prices tend to cause a decrease in demand. What has been found, however, is that gasoline as a commodity is relatively inelastic in its demand--meaning that despite increases in price, the demand does not decrease in a direct relationship to the increase in price.
They have found in the study that I cited in an earlier post, that gasoline is
slightly more elastic than inelastic as previously thought.
What we did not see in the 1970's was a massive decrease in the amount of driving (unless you could not find gasoline due to rationing) was that people were suddenly interested in cars that got better FE. Which means that if the cars are available, and if the marketing is done to make them more attractive when compared to the SUVs (which did not effectively exist prior to the 1990's in the general public consciousness), there will likely be more of the FE cars purchased.
Generally speaking, I would agree with you, that as government services are provided on a
local level, they tend to be provided fairly efficiently. What I object to strongly, is a broad increase in taxation on INDIVIDUALS as they tend to have the least control or voice in the decision process, especially as the processes move away from the local level (ie. taxation and the spending of the ill-gotten gains).
I do believe in forcing the auto manufacturers by government mandate, to produce (and market) better and more FE cars -- notice, I am NOT saying smaller cars.
This is for a simple reason...these are corporations that exist as artificial "persons" by government declaration/license. Natural "persons" such as ourselves, exist and give the government existence.
Go after the manufacturers FIRST...and that is what the EU (actually, the individual countries) did first, but also decided to grab extra $$ from fuel taxes to fund other spending, not decrease the amount of fuel used...hence apples/oranges comparison between the US/EU.
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