Posted on 04/30/2008 8:17:37 AM PDT by Deek1969
A gas tax holiday proposed by U.S. presidential hopefuls John McCain and Hillary Clinton is viewed as a bad idea by many economists and has drawn unexpected support for Clinton rival Barack Obama, who also is opposed.
"Score one for Obama," wrote Greg Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers. "In light of the side effects associated with driving ... gasoline taxes should be higher than they are, not lower."
Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.
Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.
(Excerpt) Read more at news.yahoo.com ...
Again, it depends on the specific vehicle and speed. Driving slower does not necessarily produce better gas mileage. If we started off in the same type of car with the same amount of gas and you drove 5 MPH while I drove 75 MPH, who do you think would cover more distance before running out of fuel?
Not only does it grow the economy and make people's lives better, but it also makes the ethical lives better. No one disputes that is important to our future generations.
Additionally, no, I'd prefer not to pay a toll ever 5 miles, but I would like to see our dollars spent better on new roads and repairs than wasted away in social programs.
What you are missing is that supply is capped at the amount of gasoline that the oil companies can refine. They run their refineries at pretty much full capacity through the summer because demand remains high.
But why settle for my opinion: Fact-- when Illinois gave a "tax vacation" for SIX MONTHS in 2000 on their 5% tax, the price dropped initially by close to 5% then reached an equilibrium at a 3% reduction (due to increased demand)where it remained for the remainder of the period.
Reducing the tax in one state has a different effect, because the supply to that state can increase at the expense of gas being sent to other states in the region.
If you lower the tax in the states you might be able to pull some of the gasoline supply from Canada if the same refineries can effectively supply both. The oil industry in Mexico is nationalized, so it's less likely on that border.
Reducing costs would drive down prices in a competitive market if supply isn't capped and demand isn't constantly bumping up against that cap. That's not our situation.
Okay, I see where you are coming from now. I did note in my post that this could be the case if the demand were insatiable, by which I meant greater than total existing capacity. I did not think this was the case, but if the refining margin is that tight, then it may be. Since demand is only increasing, wouldn’t it be profitable for someone to build a new refinery?
Most likely, if they can jump through all the hoops required to build one.
There hasn't been a new refinery built in the US since 1976.
Our environmental laws have gotten completely out of hand. Following them is pretty much impossible. Even the existing refineries are almost always getting cited for something.
With not in my back yard attitudes, and the inevitable lawsuits that a company would have to overcome in order to build one, doing so becomes a very risky proposition because they could easily invest hundreds of millions if not billions of dollars and still not succeed in getting it built and operating.
Arizona Clean Fuels Yuma is trying to build a refinery in the Arizona desert. The price tag is estimated at $2.5 billion.
They are advertising it as the most advanced refinery, and therefore the least polluting in order to avoid some of the environmental backlash.
They have been trying to build it since 1999. According to their web page, they still haven't gotten all the permits they need in order to break ground. It will take them 3 to 4 years after they start building to get it up and running.
I wonder how many millions of dollars they have spent so far without even breaking ground.
Remember your own words, " Driving slower in fact does produce better gas mileage."?
But seriously, I was only making a point that the MPG of any auto is a curve and not linear. And I wouldn't even grant you that 60 mph produces better mileage than 75 mph. It really depends on the car. Many cars made before the late 80's were designed to be efficient based on the national speed limit of 55 mph. Those cars still on the road after speed limits went up in the mid 90's found themselves on the backside of the curve peak when running 75 mph. Newer cars are better designed to be operated efficiently at 75 mph with a higher curve peak.
The fuel mileage killer is not as much the difference in 10 mph. It's sitting still with the engine running (which is always 0 MPG) and acceleration. Especially from a stop where the lower gears produce less rotational output while the engine is consuming a higher quantity of fuel.
Again, every car is different. Just because someone is going faster than you, doesn't mean they are consuming more fuel or getting less mileage that the car is capable of.
Some of them may indeed be idiots, but not because they are passing you.
When the private sector is squeezed for money, it has to find ways to produce the same level and quality of products for less. Why can't the federal government do the same? In a multi trillion $ budget, can't they find a way to cut something-anything to the tune of $9 billion?
The plain fact is that there are serious forces that have a vested interest in the current state of affairs and they are not necessarily interested in the problems so much as they are interested in obtaining the funds. It is a not so pretty example of the state of humanity.
Sad, but true.
PennDot (PA Dept. of Transportation) has one of the largest budgets of any state, yet our roads are appalling. Ask any trucker and he'll/she'll tell you that of all the states on the eastern seaboard, PA's roads are the absolute worst. What are we getting for our money, but a bunch of bitten tongues, chipped teeth, worn shocks and blown tires as we bounce over the expansion joints and patches? If they can't produce a durable, smooth road surface (it's not rocket science), we're talking incompetence, not money.
That's state, not federal, but I've little trust that the federal DOT is doing any better.
The whole process should be bid out to a contractor who can get it right.
Exactly the same situation here in Michigan.
They simply pave and in a couple of years have to start patching. After a couple of years of this the roads need repaving again. States such as Wyoming and Colorado have even more severe Winters but have roads that endure it.
From this I can only conclude it is incompetence or fraud on the part of the Contractors and those who award the Contracts.
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