Don’t give Big Oil a free pass here. While the true cost of gas may indeed be more than 100% more than the current cost per gallon, it’s a helluva lot cheaper than that to simply extract it from the ground and ship it round the world. An industry doesn’t make 100 billion in profit each year by keeping prices artificially low. Why should the cost of political stabilization and defense be passed solely to the driver, who pays for this through his income taxes anyway? Shouldn’t the ones who are reaping the most direct benefits of our temporarily-stabilized world contribute to the stabilization costs? Instead of a windfall-profits tax, perhaps Sen. Specter could call his plan the We-Keep-the-World-Safe-for-you-to-Drill Surcharge.

Even if you don’t support an additional tax/surcharge on the industry, surely you can agree with correcting their artificially low tax burden by removing their custom-tailored tax breaks.

Urban sprawl is one prime example of how cheap oil has led us to make decisions that go against our own interest. The increasing prices are making people think again about conservation and alternative energy, which is a very big plus.

At the moment, I’m getting my laughs at the expense of idiots driving Lincoln Navigators back and forth to work in Atlanta, 40 miles each way, complaining about how much they’re spending. Is anyone REALLY surprised by what’s happening right now?

Oil underpins our whole economy. We need to try to anticipate all the ripple effects (actually more like a tidal wave) before we start playing with artificial pricing.

I agree that the oil spike hurts our economy, but most corrections aren’t painless. I agree that a gas tax, particularly a large one, is an adventure in artificial pricing that is dangerous. We could literaly stall out the economy, rather than smoothly transitioning to alternative energy means.

A good place to start would be big oil subsidies.

For those of you who aren’t old enough to remember the seventies, get a history book.

It was pretty tough – 18% interest and sky high inflation and unemployment. A result of high gas prices, unrest in the middle east and reactionary government policy changes.

The only thing I remember about the seventies is Seasame Street and and my brother’s afro …Anyway, I’m all for learning from history…What reactionary government policy changes are you referring too?

The reason that Sean’s suggestion is the correct one is that it allows the market to allocate gas and oil efficiently rather than obscuring the signals that are necessary to make that determination. I have no problem with taking specific action to ameliorate the effects for the poor, however. But that’s a different subject.

It’s not just gas prices that will go up – it’s also food, and deliveries, and plastics, and airfare. And taxes, of course. A lot of businesses are going to get rocked by this. And consumers will end up paying increased prices for almost everything.

Unfortunately, I don’t think there’s much that can really be done (and on most other issues, I’m usually a sunny optimist). If ordinary folks can organize effectively, we can try and make sure that the new tax burden gets placed on those who can handle it. We still need to try as many creative solutions as possible, but I expect some serious economic pain over the next decade or so.

If you’re interested in a discussion by people who know the oil industry and think the oil is starting to run out (AKA: Peak oil). Check out the theoildrum.com. They like to crunch the numbers and drill towards the truth.

When the political started talking about their “fix” for the current high prices it scared the experts over there into issuing a press release titled “The Politics of Oil: The Discourse Must Change” . (To my knowledge the first time they ever did such a think)
http://www.theoildrum.com/story/2006/4/26/121441/891

It’s an excellent site if you what to keep track of the reality of oil instead of the political spin.

I forgot to mention that we consume about 140 billion gallons of gasoline a year. So a high gas tax, besides reducing fuel consumption, would generate some serious cash. Any gas-tax bill should include language restricting the use of that money so it doesn’t just go into the general treasury and disappear.

It was pretty tough – 18% interest and sky high inflation and unemployment. A result of high gas prices, unrest in the middle east and reactionary government policy changes. Here we go again. And just like the last time, it’s mostly us ordinary people who will get hammered.

Oil underpins our whole economy. We need to try to anticipate all the ripple effects (actually more like a tidal wave) before we start playing with artificial pricing. Seems to me that the “natural way” (i.e. market pricing) is already creating the desired effects. Getting the government involved risks screwing everything up, especially since the politicians are just reacting to try to get votes rather than thinking things through.

One good thing did come out of all the government meddling – that great song “I Can’t Drive 55″.

Republicans and Democrats are vying to see who can come up with the stupidest pander to motorists � all part of a short-sighted election-year reaction to $3-a-gallon gas.

Truer words have not been spoken.

Would the gas tax be necessary if the subsidies dried up?

Great post, by the way.