The Free Market, price of gas, class warfare or socialism?

[GTripp0012]

Originally Posted by skinsguy

If we sky rocket the price on something we are dependent on, it will cause a worse recession than the one we're heading toward. That is definitely NOT the answer. The law of supply and demand doesn't work in this case. What works is competition. The American people deserve to have choice of fuel for their vehicles. Competition will drive down price, dependency, and demand. It will also help to keep money in the American people's pockets, allowing them to contribute to the economy of the country. Which is good for everybody.

What your'e suggesting would only henge on the hope that the rate of living expense compensation would increase at a rate that would allow for such an increase. And believe you me, the fuel companies would never cap their prices at the end user PoP(point of purchase.) The moment the average income would "catch up" to the fuel costs, the gas companies would come up with some other excuse to raise the prices again.

The main idea is to cut usage. Competition would go by the wayside for a while, as every company would sell gasoline at the price floor mandated by the government.

As long as nationwide usage stays down, the gas will be there for those who do rely on it.

[Sheriff Gonna Getcha]

Fixing gas prices at $6 per gallon would be a disaster. If the economy is in a recession now, it would be in a tailspin with gas prices at $6 per gallon. Our economy runs on gas and if you double the price overnight, you'll wreak havoc on companies, people's lives, etc.

[BaltimoreSkins]

We don't have wide spread options now because the government failed to subsidize alternative fuel sources the way it has gasoline. Ethanol is the way we seem to be leaning as an alternative source, but the environmental impacts are questionable. They want to open a plant on the Eastern Shore, but that area produces less than half the corn that is necessary to run the plant.

[Daseal]

One thing to remember about gas, it's not just for your commuter cars. Does that go towards heating prices, which millions of people can't afford? What about all the companies that rely on tractor trailers and airplanes to do business. It would in turn make the prices of EVERYTHING skyrocket.

[BleedBurgundy]

Originally Posted by Monksdown

Exxon/Mobil makes roughly $.07 per gallon.

I'm not a conspiracy theorist, but I don't believe that for a second. Who puts out that information, Exxon and Mobil right? I just don't buy it. I don't see how the same companies that are selling a product that is continually going up in price, but supposedly not screwing us, are the same companies that are just so well run that they post record profits year in and year out. I wasn't born yesterday.

[BaltimoreSkins]

Last year, CNN stated that Exxon makes $1,000 profit every minute

[Schneed10]

Originally Posted by GTripp0012

The idea with a fixed price floor is that it steals a luxury from those who have other forms of transportation than by personal vehicle. The grand idea is to make sure there is enough gasoline to fuel cars for those who have no other options but to drive to their jobs.

This isn't about a free market vs. a socialist market, because the free market is better in 99% of cases. This is about mandating a change in usage habits, and doing it by forcing consumers to realign their values.

The free market would be totally capable of taking care of this issue on it's own, and that would be: the middle class can no longer afford to drive on a daily basis, people near the poverty line probably can't own or lease cars, and the combination of the two leads to less spending in the market, and rampant unemployment.

Then of course, we would innovate and figure things out as we always do, but I would prefer to pay double for gas now and be forced to alter my lifestyle a bit as opposed to being unable to participate in business affairs for some time.

This is quite possibly the worst idea I've ever heard of from an economic standpoint.

While we're busy "innovating" and "figuring things out", the following would happen:

- Consumer spending would drop significantly as the 100% increase in gas price cuts directly into discretionary spending.

- With lower discretionary spending, cyclical companies will undergo large layoffs and unemployment will rise above 7%.

- An inefficient market will be created, one in which gas will be available for $2 - $3 per gallon in Canada. A black market will be created in an attempt to buy gas cheaper in Canada and smuggle it across the border. Then you immediately have a national security crisis.

- Recognizing that drivers will begin to move away from the roads and towards public transportation and recognizing that demand for their services is increasing, public transportation systems will raise prices.

- Worker productivity will be drastically affected as many low-income workers will find it increasingly difficult to get to work.

- The drop in consumer discretionary spending will lead to lower profitability for our businesses, reducing the amount of taxes the government collects, thereby nullifying whatever they collect by enacting a floor on gas prices.

- Other countries will gain a competitive advantage against us as their citizens will only be expected to pay $3 per gallon for their gas, while we pay $6. This creates a scenario ripe for a bigger federal deficit, further weakening the dollar.

You're possibly talking consequences of epic proportions. Easily the worst idea I've heard in a long time.

[Schneed10]

Originally Posted by BleedBurgundy

I'm not a conspiracy theorist, but I don't believe that for a second. Who puts out that information, Exxon and Mobil right? I just don't buy it. I don't see how the same companies that are selling a product that is continually going up in price, but supposedly not screwing us, are the same companies that are just so well run that they post record profits year in and year out. I wasn't born yesterday.

No, that number is correct. It's validated by the SEC. And ever since the Arthur Anderson debacle, the SEC is all over everybody.

[Schneed10]

Originally Posted by Daseal

One thing to remember about gas, it's not just for your commuter cars. Does that go towards heating prices, which millions of people can't afford? What about all the companies that rely on tractor trailers and airplanes to do business. It would in turn make the prices of EVERYTHING skyrocket.

Exactly. Thereby resulting in massive unemployment and a reduction in tax revenue to the American government.

If you want more tax revenue, the best way to raise it is to have more people working and more companies earning. It is NOT to raise taxes.

[724Skinsfan]

Since 1995, gas prices have tripled (~$1 to ~3). Americans have kept up with their consumption. Doubling gas will have the same effect. At best you'll see a decrease in SUV purchases and an increase in economy cars. We like having the freedom to drive and will modify our spending on other luxuries until you take away our driving rights.

Hmm, maybe I'm still missing the point of this thread? Are we trying to force American dependency off of gas for other alternative forms of fuel/transportation? I think the part about killing off the middle class confuses me.

[Redskins8588]

Originally Posted by 724Skinsfan

Since 1995, gas prices have tripled (~$1 to ~3). Americans have kept up with their consumption. Doubling gas will have the same effect. At best you'll see a decrease in SUV purchases and an increase in economy cars. We like having the freedom to drive and will modify our spending on other luxuries until you take away our driving rights.

Hmm, maybe I'm still missing the point of this thread? Are we trying to force American dependency off of gas for other alternative forms of fuel/transportation? I think the part about killing off the middle class confuses me.

You are right about the price jumping from $1 to $3 from 1995 until now. So over 13 years the price of gas went up an average of $0.15 per year. However with that increase in gas each year, people's wages also went up. The idea in this thread is saying that our government should double the price of gas "overnight" from $3 to $6, not do it over 13 years. A big difference, with gas only going up $0.15 a year most people can cope with that.

[724Skinsfan]

Yeah, I guess the initial sticker shock will be extremely hard to cope with but I still think most people will adjust fairly quickly. I don't know the particular methods, but I stand by my belief that Americans will find a way to keep the pedal to the metal.

[BleedBurgundy]

Originally Posted by Schneed10

No, that number is correct. It's validated by the SEC. And ever since the Arthur Anderson debacle, the SEC is all over everybody.

Ok, so they're making a "fixed income" of .07 per gallon. Where are all these profits coming from then? The gov has to decide who to side with, big oil or the public. If they're making that much money, and it is hurting the average US Citizen, then something has to be done.

[TheMalcolmConnection]

Originally Posted by 724Skinsfan

Yeah, I guess the initial sticker shock will be extremely hard to cope with but I still think most people will adjust fairly quickly. I don't know the particular methods, but I stand by my belief that Americans will find a way to keep the pedal to the metal.

I agree, but I think that eventually America will say enough is enough and stop driving. Basically, people will be using their paychecks just to have a nice day out rather than going out a lot during the weeks and spending out at restaurants, stores and bars.

The stores also feel the pinch by their distributors charging more to bring the products to their store, so they have to increase prices to pay for the gas increase. I agree with the people talking about recession with a gas price increase. I have to say that, while I do my normal driving, the price on gas definitely has an effect on my weekends plans in general. I stay in a lot more now than I ever did thanks to the price on gas.

[dmek25]

Originally Posted by Schneed10

No, that number is correct. It's validated by the SEC. And ever since the Arthur Anderson debacle, the SEC is all over everybody.

i don't care if Jesus Christ said that number is right. i say no way. every quarter all the major oil companies are setting records for profits. how? the only increases they face are in wages for their workers. that's miniscule in the grand scheme of things. the government needs to grasp some sort of control of the price. those company ceo's will just have to be satisfied with a 10 million dollar bonus