

Why Gas in the U.S. Is So Cheap - michjeanty
http://finance.yahoo.com/family-home/article/104996/Why-Gas-in-the-U.S.-Is-So-Cheap

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ojbyrne
Sometimes I'm amazed by the innumeracy (or perhaps it's just being US-centric)
of people who seem to be in positions of importance.

"Everybody pays more, but the U.S. pays more in absolute terms," said Lee
Shipper, a visiting scholar at the University of California Berkeley's
Transportation Center. If you're already paying $4 in taxes, said Schipper,
then an extra $2 a gallon isn't that big of a deal."

From some random cruising around wikipedia, there's an obvious flaw with that
logic. Most fuel taxes around the world are sales taxes, and either based on a
percent of the underlying price, or if they are an absolute price per gallon,
they are adjusted periodically based on inflation.

So any price increase is going to be magnified by the increase in taxes -
people in countries with higher taxes will see the same proportional increase,
and a larger absolute increase.

In addition, in that quote above, he seems to have meant to say "relative"
where he said "absolute."

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r7000
I got the impression that the main point was that higher prices in various
non-US countries has led to societies that are structured less around the
availability of cheap gasoline: denser cities, a greater variety of
transportation options and so forth. Thus paying more for gasoline isn't as
big of a "lifestyle" hit whether it is "absolute" or "relative".

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ojbyrne
I just found the part of the article I highlighted to be kind of stupid,
especially coming from a Berkeley "visiting scholar." Though I'm not quite
sure how important that title is (random guess - not very), it's important
enough to be mentioned in the article.

~~~
ojbyrne
After reading over it again, I wonder if he was misquoted. Because, if you
take into account exchange rates, then the US probably is probably paying more
on an absolute basis. But it doesn't say anything about exchange rates.

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wumi
and Europeans have better public transport -- in the 200 miles it would take
me to get a major city from where I live, even driving a 20 mpg car by myself,
it'd be cheaper than public transport by a few dollars.

and with myself + n, it becomes increasingly cheaper to drive than public
transportation, where n equals traveling companions

for another example, for thanksgiving I traveled to Chicago in a group of
four. for about $180 of gasoline in said horrible gas-guzzling vehicle. price
per train ticket was $150, and the train takes 6 hours longer.

with public transport being so horrible, and this country being so spread
apart (obviously great masses of people live on both coasts, but even then
north/south travel is a long ways) it would take a lot more $/gallon for it to
make more economical sense to take bus/train vs. car.

~~~
Xichekolas
Public transport is a chicken and egg problem in the US. Since everything we
have is so spread out, we need a very comprehensive system before anyone could
use it for anything. A train or bus system is worthless if it doesn't get you
within a few blocks of where you need to go. In the US we seem to think that
public transportation means a train from the airport to the stadium, stopping
at a mall in between.

So you won't get any riders until the system goes everywhere decently
frequently. And you won't make any money without any riders. Since no one
wants to fund a public transport system that isn't self-sustaining, nothing
ever gets built, or worse, a 'trial system' gets built to 'test demand' ...
and of course since it only goes from the airport to the stadium with a stop
at the mall, it's a dismal failure.

The only way it's going to happen is a massive federal/state cooperative
infrastructure program like the Interstate Highway System built under
Eisenhower. And even then, with suburban lifestyle, it'd be too hard to cover
all that area.

~~~
kingkongrevenge
Public transport is simply not viable at the densities common in American
suburbia. Can't be done. So it's not quite chicken and egg.

More likely that a whole lot of suburbia is going to become ghetto cheap and
people will crowd into existing, older areas.

> The only way it's going to happen is a massive federal/state cooperative
> infrastructure program like the Interstate Highway System built under
> Eisenhower.

Totally unnecessary. The whole problem is from government in the first place.
Sell the highways off to the states and privatize AMTRAK. Within three years
the highways will be crumbling potholed messes and private investment will be
pouring into rail. The amount of money the government dumps into the highway
system is massive. It is hugely inefficient compared to rail. That's why
highways were fairly limited before the feds misallocated resources to them.

~~~
Xichekolas
Yeah I agree about the suburbia problem, but I still maintain the reason that
public transport has such a bad name in most of the US is because the only
contact we have with it is these 'trial projects' that don't actually go
anywhere and so seem totally useless. My argument was that if you want people
to actually try something new, it has to be useful to them, so you have to
build out a whole system on faith (faith that the public will use it). This is
probably why bus systems are more common than rail. Routes are more flexible
and you are less committed to mistakes since you can change them as you learn
where demand is.

> The amount of money the government dumps into the highway system is massive.

And imagine if all that money were instead dumped into rail transport? (Hello
Europe.) I don't think privatizing rail would lead to much innovation
regarding public transport. Rail _is_ vastly more efficient than highways
(over long distances), but the only place that private companies profit is in
freight, and they are already doing that. I think you could have private
companies own/operate the passenger trains themselves, but the actual track
would have to be built out by someone with billions to do it (on total faith
that it will someday actually pay off). Maybe Warren Buffet will get in on
that, but an easy solution is to spend some of that crazy highway money on it.

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thomasswift
People don't realize it is cheap here, mainly because it was SUPER cheap
before. I remember in high school paying a dollar or something for a gallon.
107 octane race gas was $3.50 a gallon and we thought that was outrageous. Now
we are paying more then that for 87 octane crap.

also, where is the rest of the list? I know by me gas is 3.75 a gallon now. I
know the US is 111 on the list but I'd like to see what a 30 cent increase
makes it.

~~~
jules
It's about $9.43 per gallon in the Netherlands, and it's still cheaper than
public transport (unless you are a student, then it's free).

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Prrometheus
Should be "Why gas everywhere but the US is so expensive". The base price is
set organically in the market, the price including tax is a result of external
government meddling.

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mynameishere
The gas tax bothers me less than any other tax. The roads are inevitably paid
through taxes--I doubt a libertarian scheme exists that could actually
privatize them. In addition, there's a non-trivial chance that the natural
price of gas will be very, very high in the future. Taxing it now heads off
any serious disruptions caused by that.

~~~
Prrometheus
>I doubt a libertarian scheme exists that could actually privatize them.

Private highways have been successful over the last several hundred years. The
earliest highways in the United States were built without tax dollars. If you
can't conceive of how roads could be privatized, I would say you lack
imagination.

I agree that the gas tax bothers me less than other taxes, since it tends to
be paying for use of the roads. However, if we were to tax it as much as other
countries I would be offended.

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kingkongrevenge
The US was the largest oil producer in the world for half a century. Things
evolved under the assumption of readily available oil, and that's why policy
is what it is. The rest of the industrialized world historically had no good
sources of domestic oil and always remained wary of becoming too dependent on
imports. The North Sea fields largely didn't come online in Europe until the
early 90s.

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sabat
Let's put this in straight, un-spun English: gas in other countries is taxed
heavily, and it is not in the US. Therefore, the US deserves for the multi-
national oil conglomerates to artificially jack up prices.

Yeah, that's logical.

