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Transport Subsidies Lead to Bad Decisions

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[quote user="oltmannd"][quote user="Samantha"][quote user="cordon"] [:)]It's a very attractive concept. We may as well throw into the "automobile costs" the costs for that portion of your police department and court system devoted to traffic safety.We don't have to speculate about politics here, but I don't think that the politicians will sign up to any new principle unless they understand how it will affect them in every detail.I also feel that some people are concerned with costs and benefits that we don't ordinarily measure in monetary terms.  For example, I frequently gladly pay more for a product "Made in the USA" than for an identical product made elsewhere because I see an American job at the other end of that product line.[:)]  [:)][/quote]The price of gasoline should reflect the cost of policing our highways; it should also reflect the cost of responding to an accident and cleaning up the mess.  Amtrak's costs include the cost of cleaning up a train wreck and repairing the equipment.Economics and politics go hand in hand.  After all, if it had not been for politics, Amtrak would not have seen the light of day.  That said, the probability of changing the current system is very slim.  It would not happen unless the U.S. hits a major economic crisis, and the politicans determined that rationalizing the price of transportation would be crucial to solving it.Today's paper carried an announcement by GM that it is shutting down four SUV and pick-up truck plants because people have stopped buying GM's big vehicles.  With $4 gasoline, many people realize that they cannot afford to drive them.  If gasoline had been priced properly, as per my argument, they would have realized this decades ago, and they would probably have opted for more fuel efficient vehicles.As I mentioned, cost is only one compenent of selecting a transport mode.  Other factors, such as convenience, safety, dependability, comfort, are equally important.  But most economic models suggest that cost is a major driver.  One only needs to look at the success of Wal-Mart to verify this fact.  Its business model is the envy of the retail and marketing world.  [/quote]...or look at what torture flying can be....the Walmart of transport!I read recently that it's not only the high price, but the persistence of it that gets changed behavior.  With that in mind, and knowing that these wild price variations are what we can expect in the future, it might not be a bad idea to tax production a varying amount in order to keep prices more or less stable - a negative price support - in effect.  That would do a couple of things:1. Give incentive for consumers to change their long term behavior.2. Reduce risk for development of alternate energy/fuels.The revenue could be used to fund basic research and expensive, long term development of alternate energy.Ross Perot's 50 cents per gallon deficit reduction tax he proposed about 20 years ago is seeming pretty tame, these days....[/quote]Spot on!  A couple of years ago I proposed to my elected representative pegging the cost of gasoline at $4 per gallon, using the federal gasoline tax to keep it there.  The tax would be adjusted inversely with the movement in the underlying commodity.  Needless to say, they did not agree with me.
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