Gas Prices

[Perfectlap]

Originally Posted by Giller

Higher gas taxes have worked just fine here in Canada. It costs us a bit more to fill up our car, but most of that money goes to keeping our bridges and roads in decent repair. Unfortunately, the money has to come from somewhere, so why not at least charge the people that use the roads/bridges through either a better toll system or gas taxes.

The Canadian consumer's mindset is entirely different to the American. When gas goes near $4 American wallets and pocketbooks stay closed. Since the financial crisis in 2009 we saw it replay time and time again. The economy would start to build some momentum and fuel costs rising would douse a cold bucket right onto the consumer, quickly. Americans have a great sensitivity to pricey fill ups. It affects all the spending that comes after driving off from the gas station. Gas prices were anchored into a very low range for an eternity before the rise of emerging markets created an expectation of greater demand. We got used to low fuel prices and when in a very short time gas jumped 30-40% it sent shivers down all our spines. Stagnant wages for over a decade means we simply don't handle abrupt changes, for the worse, in personal finance well. Taxes on gas works in continents that are used to high taxes, this isn't one them.

You can make a compelling case for greater investment on infrastructure, but opting to raise revenue from a consumer-sore spot is counterproductive. A flat national sales tax, closing corporate tax loopholes, maybe even the Buffett Rule, would all contribute towards that infrastructure without cooling consumer spending. And consumer spending is the make or break in lifting GDP.

[Giller]

Originally Posted by Perfectlap

The Canadian consumer's mindset is entirely different to the American. When gas goes near $4 American wallets and pocketbooks stay closed. Since the financial crisis in 2009 we saw it replay time and time again. The economy would start to build some momentum and fuel costs rising would douse a cold bucket right onto the consumer, quickly. Americans have a great sensitivity to pricey fill ups. It affects all the spending that comes after driving off from the gas station. Gas prices were anchored into a very low range for an eternity before the rise of emerging markets created an expectation of greater demand. We got used to low fuel prices and when in a very short time gas jumped 30-40% it sent shivers down all our spines. Stagnant wages for over a decade means we simply don't handle abrupt changes, for the worse, in personal finance well. Taxes on gas works in continents that are used to high taxes, this isn't one them.

You can make a compelling case for greater investment on infrastructure, but opting to raise revenue from a consumer-sore spot is counterproductive. A flat national sales tax, closing corporate tax loopholes, maybe even the Buffett Rule, would all contribute towards that infrastructure without cooling consumer spending. And consumer spending is the make or break in lifting GDP.

Bearing all that in mind - the price of gas as of a few months ago was extremely high - and in 2013 was about $3.50/gallon, slightly down from 2012. In all that, the US economy continued to grow and become dominate again in the world. So in the past few years, the price of gas has gone way up - but so has the US economy. A small increase to gas taxes would still keep the price under this magical $4, but also, the recent evidence shows that gas prices are not affecting consumer spending...at least not anymore.

[Slate 01]

Originally Posted by Giller

Bearing all that in mind - the price of gas as of a few months ago was extremely high - and in 2013 was about $3.50/gallon, slightly down from 2012. In all that, the US economy continued to grow and become dominate again in the world. So in the past few years, the price of gas has gone way up - but so has the US economy. A small increase to gas taxes would still keep the price under this magical $4, but also, the recent evidence shows that gas prices are not affecting consumer spending...at least not anymore.

The US economy has continued to go up? What planet has that occurred on? Wow. Please read my moniker at the bottom

[Joe B]

$ 2.99/gal. for diesel in Tucson (not for the Boxster !).

Someone please explain for me why diesel has become more expensive than premium in the last 10 years or so. It should be cheaper than regular!

[BIGJake111]

Originally Posted by Joe B

$ 2.99/gal. for diesel in Tucson (not for the Boxster !).



Someone please explain for me why diesel has become more expensive than premium in the last 10 years or so. It should be cheaper than regular!

To my knowledge it is because in America diesel isn't thought of Jetta fuel, rather peterbuilt fuel. The tax on diesel is much higher because the vehicles that use it are much heavier and account for more damage to infrastructure. To my knowledge that is, and what do I know.

[Porsche9]

Originally Posted by Slate 01

The US economy has continued to go up? What planet has that occurred on? Wow. Please read my moniker at the bottom

This mornings new reports indicated a 5% GDP growth in Q3. Pretty heady but we still have a ways to go to get out of the deep hole we were in.

[Perfectlap]

Originally Posted by Slate 01

The US economy has continued to go up? What planet has that occurred on? Wow. Please read my moniker at the bottom

Well we have recovered from -4% GDP growth rates in 2009 but we're still below the post war average of ~3.25%. And the first quarter of 2014 saw the first -2.0 decline since the crisis. Third quarter was 2.7% to the plus side but still it's a sensitive seesaw where fuel prices play a dominant role.

[boxster6354]

So back on topic.........

Houston area:


:dance:

[JayG]

Originally Posted by Slate 01

The US economy has continued to go up? What planet has that occurred on? Wow. Please read my moniker at the bottom

Planet earth!

Keep on listening to Rush, everything he says is the complete unequivocal truth 100% based on facts

[Timco]

Originally Posted by JayG

Planet earth!

Keep on listening to Rush, everything he says is the complete unequivocal truth 100% based on facts

Not as reliable as the No Spin Zone!

[JayG]

Originally Posted by Timco

Not as reliable as the No Spin Zone!

they drink the same kool aid as Rush and are just as good in creating facts to suit their needs

[Timco]

Originally Posted by JayG

they drink the same kool aid as Rush and are just as good in creating facts to suit their needs

Absolutely correct. Can't stand those "bloviating" talking heads.....

I'll stick to FOX news......Fair & balanced.

[Giller]

Originally Posted by Slate 01

The US economy has continued to go up? What planet has that occurred on? Wow. Please read my moniker at the bottom

Um, little place called Planet Earth. The information I get comes through my place of work (one of the worlds largest investment companies) and while I don't profess to be an expert - the US economy has grown fairly steadily since '09. Nothing crazy, but small, modest gains, putting it back in place as one of the worlds best. Heck, I can see it just by looking at my own personal stock portfolio!

[Porsche9]

Originally Posted by Giller

Um, little place called Planet Earth. The information I get comes through my place of work (one of the worlds largest investment companies) and while I don't profess to be an expert - the US economy has grown fairly steadily since '09. Nothing crazy, but small, modest gains, putting it back in place as one of the worlds best. Heck, I can see it just by looking at my own personal stock portfolio!

Wall Street is doing great. Heck, I see that in my portfolio too. Main Street not so much. I can tell you wages have not been of the trajectory they once were for the average wage earner. I'm the head of compensation and benefits at my company and there have been many years of no raises and in the years were there have been raises they are been very meager averaging around 2.5%. Well below historical averages. The big winners of this have been stock holders as companies recovered and were able to keep wage growth down.

The big drop in gas prices is the biggest equivilent to a raise that Main St has seen in years and hopefully is the final push to get the overall economy benefiting almost everyone and not just a few.