Is $3 Per Gallon For Gas A Good Thing?

Just yesterday we were paying $3.50 a gallon at the pump and were ready to pay $4 or $5 if necessary. No blessing has ever come more disguised.

2 minute read

November 25, 2005, 9:00 AM PST

By Chris Steins @planetizen


Washington Post columnist Charles Krauthammer proposes the unthinkable -- government-induced high gas prices:

"Put a floor at $3. Every penny that the price goes under $3 should be recaptured in a federal gas tax so that Americans pay $3 at the pump no matter how low the world price goes. Why is this a good idea? It is the simplest way to induce conservation. People will alter their buying habits."

Contributor Dan Zack evaluates the argument:

Gas taxes should be used to keep the price of gasoline AT LEAST $3 per gallon. Why is this a good idea? It is the simplest way to induce conservation. People will alter their buying habits. It was the higher fuel prices of the 1970s and early '80s that led to more energy-efficient cars and appliances -- which induced such restraint on demand that the world price of oil ultimately fell through the floor. By 1986 oil was $11 a barrel. Then we got profligate and resumed our old habits, and oil is now around $60. Surprise.

The worst part is that much of this $60 goes overseas to foreigners who wish us no good: Wahhabi Saudi princes who subsidize terrorists; Hugo Chavez, the mini-Mussolini of the Southern Hemisphere; and (through the fungibility of oil) the nuclear-hungry, death-to-America Iranian mullahs.

It makes infinitely more sense to reduce consumption, drive the world price down and let the premium we force ourselves to pay at the pump (which begins the conservation cycle) go to the U.S. Treasury. If the price drops to $2, plow that $1 tax right back into the American economy by immediately reducing Social Security or income taxes.

Thanks to Dan Zack

Friday, November 11, 2005 in The Washington Post

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