Lower pump prices increase fuel consumption
By Liza Field
Gov.Bob McDonnell’s proposal to cut motorists free of the gas tax, and strap our road-use costs onto the state sales tax seems, at first, helpful to no one.
Why would conservative policy encourage more gasoline waste, road congestion and deterioration, rather than less — and do so at more taxpayer expense?
Field teaches philosophy and English at the Virginia Governor’s School and Wytheville Community College.
February 13, 2013 - 6:15 AM
Liza, the conservationist and hiker, has a problem with big oil and big oil profits. Little does she know, big oil makes their $$$ on quantity, with a small profit margin.
The reason Gov. McDonnell’s proposal is good for Virginians is that it would lower my fuel costs. The new proposals only raise raise raise taxes.
If gas stations hate taxes, then why did the Virginia Petroleum, Convenience and Grocery Association endorse raising taxes on gas!
Liberal view everything else as an entitlement, why not include transportation?
Former Rep. Bob Inglis, R-SC says, “It’s not conservative to waste stuff.” That made me laugh. He undoubtedly know a lot about waste.
Big petroleum and big energy do lobby, but so does the National Education Association.
I like big oil…I want to work for them some day.
Well, no. Modern mainstream economic thought tells us that lower prices lead to reduced demand, because people are not going to buy gas because they will wait for the price to drop even more. Even, I guess, if it means running out of gas.
Modern mainstream economic thinking.
#2 Have to take some issue here, ‘Hoo. Greater demand does indeed result in higher prices, all other things (supply) being equal….as buyers “bid” for available supply.
Lower prices will result in greater sales, again all else equal.
In a product whose price is as relatively fluid as gasoline, there will be some marginal 2nd co-efficient hesitation as people see if prices will drop further (when dropping)….but the 1st co-efficient will still be positive, i.e., increased sales….the reverse respectively as prices rise.
A similar market in interest rates (if the market is alloweed to function).
3 – I was being facetious, Jim, pointing out the folly of Keynsian economics, which I’ve never advocated. Yes, as price drops, demand increases causing prices to rise again to a stable point of equilibrium. That’s how it works in the real world.