Re: OT/ What is the true cost of cheap gas?

Alan S wrote: 
Hi Confused

Because you are using much, much more than you are
producing. So you have to buy it overseas.

Certainly a simplistic view, Alan. There are other statistics that are important, not the least of which is a country's oil reserves. Japan has almost none, so it is dependent on imports. It is also a country with a high GDP, relatively small footprint, and high population density.

Oz has middling reserves, is about 3/4th the size of the continental US, but with only 19 million citizens. GDP appears consistent with other modern countries.

The US is a third larger than Oz, has significant reserves, and almost 15 times the population. Its GDP per capita is similar to Oz, but orders of magnitude greater in gross dollars.

All of the above is not meant as a slam at any country, but rather that, like diabetics, we are all in different situations. I suppose it is possible to massage the numbers with things like GDP per capita, population density, oil consumption per capita, etc., but then we would only get into arguments over the significance of the numbers derived.

Someday, the legislators (and motorists) in the USA are
going to wake up to the illogic of that. It's also the
reason why, when US supplies are threatened - my pump price
goes up too. When the biggest customer increases demand
quickly, everyone's prices rise.


We are truly in a world economy. If one is to believe the figures, that I snipped from this post, about the cost of a gallon of gasoline at the pumps, it is obvious that the major difference between the US and some other countries is the level of taxation imposed by our elected officials. If we don't like that tax burden, we need to elect different representatives.

As an example, a gallon of regular gasoline in the States has been between US$2.25 and $3.00 for the past six months or so. If the delivered cost to the pump is actually $2.17, then any difference must be taxes.

I was talking to a Brit friend today who reported his petrol cost as GBP 0.97/L. With current exchange rates, and translating US gallons to litres, he wants to sell his car because he is paying the equivalent of US$6.61 per gallon. I don't blame him. But assuming the delivered cost to the pump is similar, his government is imposing over 200% tax. That is a local choice. 

Consider side issues such as diabetes. Not related? How much
of a tax on gas prices would be needed to support a
fully-funded national health insurance scheme for the USA?
The UK, Norwegian and Australian models may not suit the US
- but the citizens of those countries have highly taxed fuel
despite self-sufficiency of supply - and they have
government-supported health systems. Coincidence?

Nothing coincidental, nor correlational, about it. Tea consumption is greater per capita in those countries than in the US, too, and about as relevant.

The fact is that the average American doesn't trust its government with his healthcare. We have decades of experience with what we call Social Security, and the fact is that it is a huge ponzi scheme and has been the subject of repeated financial misadventure. It has long been proven that paying premiums to a private insurance company in the amount of the mandatory SS tax would offer superior benefits.

More recently, we have added Medicare to provide some medical coverage to our elderly and disabled. Medicare fraud, by service recipients, medical professionals, and the government itself has been rampant. Not to mention that the docs aren't crazy about some poli telling them how much they are allowed to make. The HMOs are bad enough.

The other issue is timeliness and cost of medical care delivery. While NHS supporters might applaud the universality of benefits, with the availability of state, county, local, and charity hospitals, healthcare can be found at low or no cost when necessary. Those with insurance, usually as a fringe benefit of employment, do fare better. The timeliness under the US system seems to be superior, at least for non-emergency care, when compared to the NHS systems.

It's worth considering these numbers next time you're
watching the price rise at the pump - or when you are
deciding which car to buy and whether size and power is more
important than miles per gallon.


The whole issue of healthcare is very complex, just like the economics of energy, and the vagueries of taxation. I don't think anyone has it right yet, but using petrol prices as a proxy for the efficient delivery of healthcare is a specious argument at best.

Jim
.

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