$4 Gas is a Good Thing!

Thomas Friedman points out in his op-ed column, that expensive gasoline is the only thing that motivates people to conserve. He points out the things a truth telling Presidential candidate would tell Americans. First thing is there are no quick fixes for gas prices. Rising global demand and poor energy policy in the United States are pushing up oil prices. The way to end our oil problems is to ensure high gas prices. The government should place a price floor on gasoline of $4. If the market price is higher than $4, then nothing needs to be done, but if the market price drops below $4 the gas tax should be raised to make the price $4. There should be tax rebates to offset this gas tax for the middle class and the bottom tax brackets. Gasoline at 4 dollars is the magic point where Americans drive less and buy smaller vehicles. When gas prices drop, as they did in the 1980s and 1990s, Americans buy larger and larger vehicles because they can afford to. The problem comes when gas prices rise and people can no longer afford the fuel for their large inefficient vehicles. The guarantee of $4 gas would cause consumers to avoid gas guzzlers because they would know the price of fuel would not drop. Car companies would need to make more fuel efficient vehicles to meet consumers’ expectations.

Source The New York Times