Economic Literacy

[Elok]

He shows keen political literacy to match his economic illiteracy. It balances out, sort of.

[KrazyHorse]

Re: Re: Economic Literacy

Originally posted by Agathon


When did you start quoting from the gospel of efficiency?

A serious question, since I was obsessed with the concept for a while, and I noticed you mentioned some similar stuff in another thread.

Look, just because you want to redistribute wealth doesn't mean you should do it stupidly...

[Agathon]

Re: Re: Re: Economic Literacy

Originally posted by KrazyHorse

Look, just because you want to redistribute wealth doesn't mean you should do it stupidly...

I wondered if you'd been reading up on economics lately. Never mind.

[Kidlicious]

Re: Re: Re: Economic Literacy

Originally posted by KrazyHorse


Look, just because you want to redistribute wealth doesn't mean you should do it stupidly...

You do if you want to get elected in the US.

[KrazyHorse]

Re: Re: Re: Re: Economic Literacy

Originally posted by Agathon


I wondered if you'd been reading up on economics lately.

Yes, actually.

[Victor Galis]

Originally posted by PLATO


Why reduce dependence? The more we use then the quicker it will be gone and the quicker a replacement will be found.

So you favor a more sudden adjustment in consumption?

[PLATO]

Originally posted by Victor Galis


So you favor a more sudden adjustment in consumption?

I doubt that it would get there. Technology is advancing in several different areas that could easily fill oils shoes as a fuel for automobiles.

Plus, I really believe that the nuke issue is a ridiculous one as well. If they can build a reactor for a submarine that would fit in my closet, but still has enough power to light up a city...and does it with almost no emissions, then I think somebody is pulling the wool over our eyes on the energy issue.

[Agathon]

Re: Re: Re: Re: Re: Economic Literacy

Originally posted by KrazyHorse

Yes, actually.

What kind of stuff?

[SlowwHand]

Originally posted by Victor Galis


So you favor a more sudden adjustment in consumption?

Sudden?
How long have we know that we need an alternative?
Finally, at least hyprids are becoming a presence.
Finally, people are installing solar panels.
Finally, areas capable of wind are utilizing it. It certainly wasn't sudden.

[KrazyHorse]

Re: Re: Re: Re: Re: Re: Economic Literacy

Originally posted by Agathon


What kind of stuff?

A large array of things. Using econblogs as a sort of index of stuff I should look up.

[Skanky Burns]

Originally posted by SlowwHand
Sudden?
How long have we know that we need an alternative?
Finally, at least hyprids are becoming a presence.
Finally, people are installing solar panels.
Finally, areas capable of wind are utilizing it. It certainly wasn't sudden.

All of which reduce dependence on oil - the opposite of what Plato was recommending.

[Victor Galis]

Originally posted by PLATO
I doubt that it would get there. Technology is advancing in several different areas that could easily fill oils shoes as a fuel for automobiles.

But the problem is new technologies can't be adopted overnight. The sooner oil becomes too expensive to use, the sooner we start to switch. If oil isn't taxed heavily, the time from the point it becomes too expensive to the time it actually runs out is much shorter than if we help the price up a bit.

Plus, I really believe that the nuke issue is a ridiculous one as well. If they can build a reactor for a submarine that would fit in my closet, but still has enough power to light up a city...and does it with almost no emissions, then I think somebody is pulling the wool over our eyes on the energy issue.

I think people are genuinely worried about nuclear power. Think Chernobyl, disposing of highly radioactive waste that takes 10k years to decay, and terrorists getting their hands on nuclear materials. If that isn't enough Uranium prices have increased more than tenfold in the last decade, though granted prices were kept low by the decomissioning of a lot of nukes.

Sudden?
How long have we know that we need an alternative?
Finally, at least hyprids are becoming a presence.
Finally, people are installing solar panels.
Finally, areas capable of wind are utilizing it. It certainly wasn't sudden

If we keep using oil until the day it runs out, we'll have a very serious problem. None of those technologies are ready to take over completely. Keeping oil prices up is the only way to ensure that they become adopted. We were supposed to have alternatives to oil back in the 1970s, but then it got cheap again and everyone failed to follow through on those alternatives.

And quite frankly, I'd rather tax oil than income (though, I doubt an oil tax or even a carbon tax could be substituted for the whole of the income tax).

[Patroklos]

Eh, this is definetly a better way to go about giving away money we don't have than the current "rebate."

And for all you bleeding heart types, will help out the poor/middle class a hell of a lot more than the rich.

As for global warming, a three month tax cut will have no significant effect. What, do you think people will go out and buy more gase because it is $.20 lower per gallon? The certainly haven't been buying less because it was $2.00 more.

In any case, "rebates" of any kind

[Arrian]

This is true - it will help the poor (or lower middle class - I imagine most really poor people take buses) more than the rich.

Still, it's stupid.

-Arrian

[KrazyHorse]

Originally posted by Patroklos
Eh, this is definetly a better way to go about giving away money we don't have than the current "rebate."

No, it isn't. This is actually an example of just about the WORST way to shift money from the future to today (which is the effect of any move which increases the budget deficit). Pay attention:

1) The summer driving season is when the demand for gasoline and roads are at their highest

2) If you lower the taxes on gasoline then the quantity of gasoline (and the complementary good, roads) demanded will increase, given the same pre-tax price.

3) During high gasoline demand periods refiners are already operating near capacity. They cannot supply more gas quickly. The pre-tax price of gasoline will rise. If the domestic supply was perfectly inelastic and gasoline couldn't be shipped in from outside then in fact the post-tax price of gasoline WOULD REMAIN CONSTANT OR ELSE THERE WOULD BE SHORTAGES. In this case, where did the tax revenue you lost go? That's right, straight into refiners' pockets. It is a transfer from the general public to refinery owners. Since some gasoline can be shipped in from outside (though the market in refined products is not as developed as crude is) then the post-tax price of gasoline does drop slightly (though only a small fraction of the tax cut). In this situation "only" 80% of the tax cut goes to refineries. While the other 20% goes to drivers.

4) Let's assume that by some miracle the market for refined products now demonstrates perfect elasticity of supply; that is, the pre-tax price of gas will not rise. Well, congratulations! Post-tax prices are now cheaper by exactly the amount you cut taxes! What will the response of people be? Oh, right: to drive more. On publicly subsidized roads which are already experiencing seasonal traffic jams because of high summer road use. Good job.

Technically, roads are a complementary good to gasoline. Both gasoline and roads are inelastic-supply goods during summer driving season. Reducing taxes on inelastic-supply goods is a transfer to the suppliers. Since road use is already heavily subsidized the suppliers of gasoline are already getting subsidies.

Reducing gas taxes is just about the worst way to hand out money, and reducing gas taxes during the summertime is just about the worst way to reduce gas taxes. Anybody who's not a refinery owner who supports this is an idiot.