Editore"s Note
Tilting at Windmills

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April 22, 2006
By: Kevin Drum

GASOLINE ALLEY....Atrios sez:

It's amazing how much time news stations can spend on showing people complaining about gas prices.

For obvious reasons, I was thinking the same thing last night. But then, in my usual wonkish way, I got curious about the subject.

It turns out that the average household uses about 1100 gallons of gasoline per year and has an average income of about $44,000. Take out 20% for taxes and that's a disposable income of $35,000.

So at two bucks a gallon that means the average household spends 6% of its disposable income on gasoline. At three bucks a gallon it's more like 10%. And that's only the average.

If your income is higher than average or your driving habits are lower than average, you'll spend less. Marian and I qualify on both counts, and my guess is that we don't spend more than 2% of our income on gasoline. Higher gasoline prices don't really affect us that much.

At the other end, though, are the people who make less than average and drive more than average. They probably spend 15-20% of their incomes on gasoline. That's a lot.

So there you have it. There's a substantial segment of the population that spends a very big chunk of their income on gasoline, and in the past 12 months they've seen gasoline prices increase by 50% and that's at a time when household income has been decreasing for five years running and household debt is already sky high. They're probably pretty pissed that that whole Iraq business didn't work out quite the way it was supposed to.

Kevin Drum 4:15 PM Permalink | Trackbacks | Comments (213)

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Comments

Gasoline taxes hurt middle income and lower income people hardest.

Posted by: Frequency Kenneth on April 22, 2006 at 4:18 PM | PERMALINK

That's a nice analysis. Really spells out the problem on the back of an envelope.

Posted by: Wapiti on April 22, 2006 at 4:21 PM | PERMALINK

Interesting post. I wonder if anyone has any figures on the shakeout from the 73 oil crisis?


For instance locally (Seattle area) our construction workers typically commute an hour or two per day in big trucks. Their standard of living must be under strain now, so I suspect an oil shock would send them under in droves. Of course, we're overbuilt from the frenzy of the last few years anyway.

Posted by: Sam Spade on April 22, 2006 at 4:26 PM | PERMALINK

Many of the folks hardest hit are redstate suburban churchgoers. If the Rapture doesn't happen soon those folks are going to feel betrayed.

Posted by: Ron Byers on April 22, 2006 at 4:26 PM | PERMALINK

Gasoline taxes hurt middle income and lower income people hardest.

Not in cities with good public transportation.

Just sayin'...

Posted by: Adam Piontek on April 22, 2006 at 4:27 PM | PERMALINK

That is why a gasoline tax is a non-starter. The people who would be the most affected can't front the money a gas tax would cost them while they wait for the rebate checks to come in. Even if it was monthly, which would cause a huge increase in the administrative costs. I just don't see a way to square those.

Posted by: Nathan Florea on April 22, 2006 at 4:28 PM | PERMALINK

Amazing the attempt to turn the topic to gasoline taxes. If you do away with gasoline taxes you are going to have to pay for road repair with some other form of tax. Any ideas?

Posted by: Ron Byers on April 22, 2006 at 4:32 PM | PERMALINK

If you remember Clinton's first tax legislation, the Western states were the biggest stumbling block in the Senate on the gas tax. If you have to drive more than 100 miles to the nearest supermarket you really don't like to see the price of gas increase. So there's some potential here to help take back the Senate.

Posted by: Bill on April 22, 2006 at 4:39 PM | PERMALINK

It may be misleading to look at these averages if rich people, who like toys (big SUV's), use a lot more gas. To take an exaggerated case, suppose rich people used 99% of all the gas used, then it makes no sense to divide total gas consumption equally across all people.

You probably want to see the curve of gas consumption vs. income, if there is a clear bump or correlation then you want to work from that as a starting point rather than the overall averages.

But even still it does sound like this is likely a pretty big chunk of people's money.

Posted by: mk on April 22, 2006 at 4:41 PM | PERMALINK

I am talking about the extreme gasoline tax of $1 to $2 or more that has been discussed at least a few times on this blog and others. It should be obvious from the context that I am talking about new taxes, not existing ones, and ones where there would be a progressive rebate for low to mid-income families (as discussed previously).

Posted by: Nathan Florea on April 22, 2006 at 4:42 PM | PERMALINK

The problem is that even though the government is collecting the taxes, they have the money funneled away from where I live, so the roads here don't get fixed anyway. It's like everything else, why pay to keep something up when they can put it off until they need to totally rebuild the road? I know it's not supposed to work that way, but we are talking about the government here.

Posted by: Keith Distel on April 22, 2006 at 4:42 PM | PERMALINK

I remember during the last election, I talked to a lot of very poor people in rural NC. All of them said that they wanted someone to get elected who would do something about gas prices. I was really surprised, since this wasn't on the radar at all for the media, but EVERYONE I talked to with a low income was saying that.

Posted by: J.B. on April 22, 2006 at 4:42 PM | PERMALINK

Brilliant.

Posted by: Einar Moos on April 22, 2006 at 4:48 PM | PERMALINK

The modern industrial states have the infrastruture to use energy more efficiently than the developing countries. Those Price rises hit Africa and parts of Asia the hardest.

I have been looking for data on the amount of GDP we can produce per unit energy. Someone quoted a timeline on this statistic, and I would be interested in a link.

Posted by: Matt on April 22, 2006 at 4:48 PM | PERMALINK

"...that whole Iraq business didn't work out quite the way it was supposed to." Kevin Drum

I've been out of the loop lately, and I'm wondering how much play and credence was given to Greg Palast's column a week or ago contending that everything has worked out just as planned: chaos in the Middle East to drive oil prices up, to a bit simplistically summarize. Could it be the great reality? Anybody buying it?

Posted by: Jones on April 22, 2006 at 4:50 PM | PERMALINK

I know it's not supposed to work that way, but we are talking about the government here.

Whereas private companies put all of their profits back into R&D and serving their customers. : ) Government can always be made more efficient, and it has definitely gone down hill in the last several years as far as bang for buck, but I think people hold governments to a much higher standard than they do every other human organization.
I'm a fan of markets, when there is enough competition to make them work properly, but, for example, I think it would be hard for our government be more inefficient than the big oil companies at distributing oil. Not that I want the government to take over that business, but any industry making that amount of profit is not an efficient market.

Posted by: Nathan Florea on April 22, 2006 at 4:50 PM | PERMALINK

That is why Bush is starting to sink in the rural red areas, and his support is dropping down to the mid 60's with republicans.

Working poor white conservatives in many of these areas will be able to afford a home, and land say 25-30 miles out of town. They are taking it through the nose right now. They aren't getting raises, and they basically need a truck, which is getting them 15 mpg. So they are spending around $250 just for work mileage. Instead of say $150. That $100 is the difference between being able to go out to eat a few times a month, going hunting, going fishing, going to the movies. The Beltway crowd doesn't get this.

People are staying home, doing nothing but work, go home, and getting pissed.

Posted by: trifecta on April 22, 2006 at 4:52 PM | PERMALINK

I know a couple of people who, since gas prices started rising, can only afford to drive to and from work each day, with perhaps one side trip to do errands on the weekend.

Where it's really hurting in my area (New England) is among people who cannot afford housing anywhere near where their jobs are, and bought houses or condos way far out in the boonies -- and are now seeing a good bit of what they saved in mortgage costs lost to paying for gasoline.

OTOH, for those of us lucky enough to work in Boston, there is pretty decent commuter rail service to some of the suburbs -- though most of us have to drive to get to it. Ridership has gone way up in the past year.

Posted by: quietann on April 22, 2006 at 4:53 PM | PERMALINK

people are already hitting the pawn shops for extra cash to fill up their cars to get to work. this is going to get much much worse for those families just now barely hanging on. in the meantime, we'll be entertained by the posturing of chuck schumer, dennis hastert et al as they demand! an investigation into price gouging. expect the ftc's report around the time gas hits $5.00.

Posted by: linda on April 22, 2006 at 4:53 PM | PERMALINK

The main page for those statistics is here, including more links and some graphs. Unfortunately, much of this data is from 2001, prior to recent increases. It would be interesting to see if annual mileage and consumption are still in these same ranges.

It looks like the Democrats are going to try to make this into a political issue.

They have to somehow connect the high prices with the actions of the current administration, while at the same time cover over the fact that their party has, over many years, been almost exclusively responsible for crushing every attempt to open new domestic supplies, not to mention the nightmare of many different fuel standards. Good luck with that.

More on pricing here.

Posted by: tbrosz on April 22, 2006 at 4:53 PM | PERMALINK

Yes, I so clearly remember my republican realtor explaining to me a little over 3 years ago (while we drove around in her brand new Lincoln SUV) that if we went invaded Iraq, gas prices would stay down, or drop, and interest rates would would stay down, or drop.

Posted by: little ole jim from red country on April 22, 2006 at 4:55 PM | PERMALINK

I don't know what's more amusing: Kevin saying "sez" or tbros saying anything?

Posted by: gq on April 22, 2006 at 4:56 PM | PERMALINK

Crushing every attempt? That's a strong statement.

In any case, the experts say that domestic supplies are not the answer. The Alaskan oil would run the country for about a month. Boy, that exciting.

Posted by: little ole jim from red country on April 22, 2006 at 5:03 PM | PERMALINK

Many of those low to moderate income SUV/megatruck commuters are paying $650 to $800 permonth in car payments or leases on vehicles that they could barely afford in the first place, seduced by the zero interest financing offered by dealers. I have a hard time feeling sympathy for people who make their transportation a cosmetic and then put on way to much makeup. It's apainful lesson that society must learn. Poor people can't afford a rich mans car any more.

Posted by: JL on April 22, 2006 at 5:05 PM | PERMALINK

Tbrosz,

Gasoline supply is finite. We cant drill our way out of the mess. If people drove smaller cars, demand would be smaller and prices lower. Its economics.

In the past five years, especially after 9/11, the burbs in my neck of the woods have become overrun with station wagons on steroids, that is, SUVs. Completely unnecessary, but they gave the drivers that "reptilian" sense of safety. No one thinks any more, just reacts to gut feelings.

Posted by: troglodyte on April 22, 2006 at 5:06 PM | PERMALINK

It looks like the Democrats are going to try to make this into a political issue. They have to somehow connect the high prices with the blah blah blah....

You wish.

All they have to do is sit back and observe while voters make the fundamental connection between an economic scenario that is hurting their ability to survive and the party that has controlled every organ of government for four years and has done nothing to remedy it and many things to make it worse.

Posted by: Windhorse on April 22, 2006 at 5:07 PM | PERMALINK

The average household spends between 14% and 20% of its income on transportation alone.

That's for the top 20 metropolitan regions.

Total transportation costs, not just gasoline.

NYC is at 14%, ranging right on up to 20% for the sprawliest cities.

Posted by: SombreroFallout on April 22, 2006 at 5:12 PM | PERMALINK

... not to mention the nightmare of many different fuel standards. Good luck with that.

quibble:

states like california and those in the northeast have their own particular and compelling interests in having stricter standards. there are a lot more cars there. neighboring states also benefit because air pollution tends to travel. don't like the nightmare of different standards? advocate for national adoption of a standard like that in california and other states like it.

Posted by: spacebaby on April 22, 2006 at 5:16 PM | PERMALINK

" . . . their party has, over many years, been almost exclusively responsible for crushing every attempt to open new domestic supplies . . ."

Only a simpleton would believe that increasing domestic oil production would have a significant effect on US oil prices. There just ain't enough oil here.

Posted by: Joel on April 22, 2006 at 5:17 PM | PERMALINK

Thanks for the link, tbrosz, and I discover what I expected. In general, we are geting more efficient faster than oil prices rise, at least up until the data ends. You are right, we want the latest data.

But, the conclusion still remains, the modern economies outperform the developing economies in efficiecy, which is the real cause for concern, for it is a major factor driving population migrations. A catch-22, the better able we are in coping with peak oil, the more immigrants arrive on our shore.

The economic trend is to pack more and more people into smaller and smaller industrial spaces for energy efficiency.


Posted by: Matt on April 22, 2006 at 5:18 PM | PERMALINK

Table 1. 2003 Household Expenditures
on Transportation by Metropolitan Area

Rank |MSA| Percent of H-Hold Spent on Transp

1 Houston 20.9%
2 Cleveland 20.5%
3 Detroit 20.5%
4 Tampa 20.4%
5 Kansas City 20.2%
6 Cincinnati 20.0%
7 Anchorage 19.9%
8 Dallas- Fort Worth 19.7%
9 Phoenix 19.6%
10 Miami 19.6%
11 Denver 19.2%
12 Seattle 19.0%
13 St. Louis 18.7%
14 Atlanta 18.7%
15 Los-Angeles 18.4%
16 San Diego 18.4%
17 Honolulu 18.0%
18 Boston 17.2%
19 Minneapolis- St. Paul 17.2%
20 Chicago 16.9%
21 Milwaukee 16.6%
22 San Francisco 16.6%
23 Pittsburgh 16.6%
24 Philadelphia 15.9%
25 Washington D.C. 15.4%
26 New York 15.4%
27 Portland 15.1%
28 Baltimore 14.0%
___________________
United States 19.1%
___________________

Source: Selected metropolitan statistical areas:
Average annual expenditures and characteristics,
Consumer Expenditure Survey, 2002-2003.

Posted by: SombreroFallout on April 22, 2006 at 5:25 PM | PERMALINK

I think it's humorous when the stock market gets all excited about inflation staying in place when they "take out expenditures for oil and food."

Posted by: pol on April 22, 2006 at 5:25 PM | PERMALINK

What are you talking about?

According to Glen Reynolds, Charles Johnson, Malkin, Hannity, Rumsfeld, etc., the war is going SWIMMINGLY.

I blame the press for the increased perception of economic hardship.

Posted by: tomboy on April 22, 2006 at 5:28 PM | PERMALINK

I hate to get snarky, but my friend Russ neatly skewered these people crying poor on his blog. If you're going to be dumb enough to buy too big and too far away when everyone knows that the cost of fuel is destined to go up, whose fault is that?

As to the economic fairness of gas taxes, is it that hard to come up with a bill that redirects the proceeds of a gas tax to a) increased welfare benefits, and b) tax cuts for the working poor and lower-middle class?

Posted by: Robert Merkel on April 22, 2006 at 5:30 PM | PERMALINK

Pol: I think it's humorous when the stock market gets all excited about inflation staying in place when they "take out expenditures for oil and food."

Don't forget rising education costs and the increased in health insurance premiums, deductables, copayments, etc. If you add up all the things the CPI doesn't cover, it is well over 25% of the economy.

Posted by: tomboy on April 22, 2006 at 5:31 PM | PERMALINK

"Thanks for the link, tbrosz, and I discover what I expected. In general, we are geting more efficient faster than oil prices rise, at least up until the data ends."

Not really, miles driven per gallon burned is going up, but miles driven per person day also going up. Since the 70's gas mileage has approximately doubled, but miles driven per person has also approximately doubled. We are getting a lot more efficient in one way but a lot less efficient in another and they are pretty much canceling out.

We have built more efficient cars and less efficient cities.

There are indications that we are starting to build more efficient cities in this country again, but it is just beginning.

Posted by: jefff on April 22, 2006 at 5:33 PM | PERMALINK

Imagine how it affects cab drivers and how that in turn affects you.

Posted by: Garry on April 22, 2006 at 5:35 PM | PERMALINK

I am astonished there hasn't been more pain with $3.00 per gallon gas, more visible economic consequences.

Of course, I don't believe any government statistic released by Bushco.

Posted by: PTate in MN on April 22, 2006 at 5:35 PM | PERMALINK

Not in cities with good public transportation.

Just sayin'...

Commie bastard.

Posted by: Tail Sniffer Joe on April 22, 2006 at 5:37 PM | PERMALINK

Do you ever parse out how much more you're paying for something because of the gas?

When we take our daughter to her twice-weekly ice skating class, that can cost from $3 to $6 a journey, depending on which car we take. That's $24 to $48 extra a month, in addition to what we "think" we're paying for the lessons.

I usually skip eating when we go to the mall, to save money, but it's best if I don't think about the $5 spent on the trip alone.

And if we head for a museum in L.A. (on the first Tuesday of the month, the Natural History Museum is free) --- 80 minutes to over 2 hours a way, depending on traffic --- jeez, that's at least $25 at current prices.

Posted by: catherineD on April 22, 2006 at 5:41 PM | PERMALINK

We hear that one reason for the high prices is the Gulf Coast (TX, LA)refineries knocked out by Katrina are still not all running at capacity. Who decided that these plants need to be in the way of hurricanes, and why are they not being moved to other port areas, such as Norfolk and calmer places like Wilmington, DE?

Posted by: Hedley Lamarr on April 22, 2006 at 5:43 PM | PERMALINK

A lot was left out.

Any trucker can give you an ear full on fuel costs. Any business that requires employees to travel is taking a hit. That means those businesses are cutting back, maybe on the amount of health care increases they cover for employees. Higher fuel surcharge for shipping and flying. Speaking of flying, wait till you turn in your rental car at the end of your summer vacation. Get ready to be shocked. Fill'n the tank will cost more than you have in your pocket. You'll have to put it on your credit card. The one you used to pay off every month but kinda got away from you lately. But what the hell, with every damn thing going up but your pay. etc. etc. etc.

Posted by: hadenough on April 22, 2006 at 5:44 PM | PERMALINK

Do gas prices influence to cost of goods and services? That is, if UPS has to spend more in gas, does that correspond to a need to increase their shipping prices? If WalMart or Target or Albertson's needs to spend more in gas to deliver their products to stores, does that correspond in the need to increase prices? If so, are these increases in prices reflected in "gas consumption"?

Posted by: gq on April 22, 2006 at 5:45 PM | PERMALINK

J.B. and Adam Piontek --

Fuel prices impact the poor disproportionately because cheap housing costs are driven by cheap land costs. So in North Carolina and Tennessee, access to cheap land has meant sprawling cities and beyond that, lots of homebuilding in rural areas.

Adam -- even in many cities, good public transportation & transit don't necessarily serve poor areas. Lots of places intentionally avoid doing so. Suburbanization and the rise of the polycentric city means growth in entry-level jobs occurs in the outskirts, out of the reach of public transit systems. And guess who and where the labor is for those jobs? Poor city residents -- who remain car-dependent.

Further, very often new transit facilities aren't sited for income-equitable access. Montclair, NJ has FIVE train stations. Wealthy suburbs fear siting public transit to poor central cores -- again, maintaining auto dependency among the poor.


Gasoline taxes hurt middle income and lower income people hardest.

Not in cities with good public transportation.

Just sayin'...

Posted by: Adam Piontek on April 22, 2006 at 4:27 PM | PERMALINK

Posted by: SombreroFallout on April 22, 2006 at 5:46 PM | PERMALINK

I have to drive 32 miles one way to work. Work 4 days, sleep in truck 2 nites a week. Cut my gas consumption by 40%, about 5 hours less drive time per week, customized schedule. Wal Mart parking lot is my second home,lol. If not gas costs would be about 20% of paltry take home.

Posted by: Michael7843853 G-O in 08! on April 22, 2006 at 5:47 PM | PERMALINK

I have a hard time feeling sympathy for people who make their transportation a cosmetic and then put on way to much makeup.

I hate urban SUVs and monster trucks as much as the next liberal, but you can understand why people on moderate/low incomes buy or lease them: lots of manufacturer and dealer discounts (including the ubiquitous cashback), maintenance handled under warranty, etc. It's a buy today, pay tomorrow approach (or, to be honest, an indeterminate long-term rental until it's repossessed) but that's a necessity for too many people.

Want a Civic or (especially) a Prius? Get in line and don't expect the dealer to give you a penny off. Add the fact that there's basically no market pressure in the small car sector (especially with diesel engines, given the crappy standards of DERV) and it's a seller's market.

Still, give a bit of time, and you might see Ford and GM importing their European models that do 35mpg plus.

Posted by: ahem on April 22, 2006 at 5:48 PM | PERMALINK

Not in cities with good public transportation.

Just sayin'...

And, where would those cities be??


Posted by: pol on April 22, 2006 at 5:50 PM | PERMALINK

I bought my Hummer so I wouldn't have to sit on a bus next to poor Blacks and Puerto Ricans.

Posted by: Republican on April 22, 2006 at 5:50 PM | PERMALINK

And, where would those cities be??

Portland, OR.

Definitely.

Posted by: Raj on April 22, 2006 at 5:53 PM | PERMALINK

Matt: from memory try pewclimate, oecd, imf, and world bank for GDP/energy use.

On $GDP/energy use, the US now stands at less than 50% of its energy use in 1975 at approx. $3.5billion/Mtoe, but UK at $5billion, Germany at 5.4billion, and Japan at $6.5billion. Wonder why?

Think the price in the UK was about $5/gallon this summer.

For all you believers in only free markets being able to respond to the demand, what makes energy prices move is mostly history--it's happened and it probably wasn't predicted. When the whole economy has such huge capital outlays, private business is not going to take the risk to head in any new direction without a push. With relatively inelastic demand a small shortage is way more profitable than any oversupply. See Enron's energy manipulation and California's power authority panic buy of futures.

The end of liquid and gaseous fossil fuels is predictable but for some (ideological?) reason we're frozen from action. Just like medical care, the US cannot/will not take any lessons from overseas. Guzzle on.

Posted by: notthere on April 22, 2006 at 5:59 PM | PERMALINK

pol & Raj,

Check upthread to the list.

While it's based on avg HH total transp spending, and so is inclusive of both SB-drivin suburbanites and non-car-owning downtowners, it's a good measure of the costs of urban mobility.

19 Minneapolis- St. Paul 17.2%
20 Chicago 16.9%
21 Milwaukee 16.6%
22 San Francisco 16.6%
23 Pittsburgh 16.6%
24 Philadelphia 15.9%
25 Washington D.C. 15.4%
26 New York 15.4%
27 Portland 15.1%
28 Baltimore 14.0%
___________________
The list was from most to least spent.


Posted by: SombreroFallout on April 22, 2006 at 6:00 PM | PERMALINK

Mtoe = million tons of oil equivalent.

Posted by: notthere on April 22, 2006 at 6:01 PM | PERMALINK

The Democrats stopped every attempt to open domestic supplies? When did Jeb switch parties?

Posted by: Tigershark on April 22, 2006 at 6:02 PM | PERMALINK

gq and CatherineD:

re cost of fuel on product and delivery prices...

Trucking Impacts. Congestion means longer travel times and less reliable pick-up and delivery times for truck operators. To compensate, motor carriers typically add vehicles and drivers and extend their hours of operation, eventually passing the extra costs along to shippers and consumers. Research on the trucking industry has shown that shippers and carriers value transit time in the range of $25 to $200 per hour, depending on the product being carried. The cost of unexpected delay can add another 20 percent to 250 percent.

Globalization has a bottleneck in its future.

Posted by: SombreroFallout on April 22, 2006 at 6:04 PM | PERMALINK

In general, we are getting more efficient faster than oil prices rise, at least up until the data ends..

Hmmm. I understand that oil prices were $29/barrel prior to invading Iraq; now a barrel of oil is about $73. I dont think I can buy a car that get 2.5 times the mileage it did a little over 3 year ago.

Posted by: little ole jim from red country on April 22, 2006 at 6:07 PM | PERMALINK

That list is interesting. But I'm shocked about Baltimore. Gas in Maryland is the most expensive in the middle Atlantic and they have fair to bad public transit. Perhaps everyone is making bank in Baltimore (that's sarcasm) or no one goes anywhere.

Personally, I have never found the idea of blood for oil a bad thing. I'd certainly rather fight over a scarce resource (water, oil, land) than over religion or culture.

But the idea of blood for NO oil is rather stupid to me.

Posted by: DC1974 on April 22, 2006 at 6:08 PM | PERMALINK

Would you accept $2,000 more per year in salary?

Read on...

The Puget Sound Regional Council (PSRC) says we spend about $26 billion locally, or 25 percent of our personal incomes, just for the privilege of moving around. And it's not light rail that's eating a hole in your pocket. We each paid about $5,400 in 1998 to drive a car, but only $690 to fund buses, ferries, and other public transit, the PSRC calculates.

Think the price is worth it for all that individual mobility? Those numbers don't even begin to get at the real costs of cars, says PSRC's Ralph Cipriani. "We pay for unprecedented mobility, comfort, and privacy in ways that are not always apparent," says Cipriani. "Most [people] generally consider the costs associated with maintaining and improving roadways, building sidewalks and bike paths, buying buses and operating transit routes. . . . In fact, these direct public expenditures by government are only a small portion of the total cost of transportation."

Parking is one of the biggest hidden costs of driving. In many cases, your car costs more sitting still than it does running down the street. A 1996 report from Northwest Environment Watch estimated that a parking space adds about 10 cents per mile to the cost of a daily commute. A typical commercial development dedicates more space to parking than it does to offices and stores. That drives up construction costs, in some cases as much as 18 percent, which means your rent, plate of pasta, and coffee cost more. But the cost of parking gets even more personal: Chances are your employer could pay you as much as $2,000 more per year for what it costs to hold a parking space for you.

Drivers can't even enjoy the smug satisfaction that they themselves are paying for the convenience of their cars. The U.S. Department of Transportation estimates that roadway-user fees and taxes (such as the gas tax and vehicle registration fees) pay for only about 60 percent of public expenditures for roadway construction and repairs. The rest has to be paid for by the public at large through sales and property taxes.

Residents of cities that have made heavy investments in public transit, such as New York City, pay $2,500 less per year for mobility than do residents of car-dependent cities like Houston, points out Peter Hurley of the Transportation Choices Coalition. Seattle's per-household costs are closer to Houston's than New York's.

from:
http://www.seattleweekly.com/news/0146/news-fullerton.php

Posted by: SombreroFallout on April 22, 2006 at 6:15 PM | PERMALINK

DC1974:

But where do Baltimoreans live?

Transportation costs are a function not just a matter of gas prices and quality of transit. "Bad" transit may not increase costs, as long as it goes where it needs to.

Costs are a function of gas prices + vehicle choice x VMT. But Vehicle Miles Traveled can be low, as long as housing is located near transit, and housing is located near jobs.

That may be the case in Baltimore, I don't know.

The shocker for me was Minneapolis, which is reeeaallly spread out. They placed fairly high for that reason alone. May be a combination of increasing transit ridership and compact, mixed-use infill. Dunno.

Posted by: SombreroFallout on April 22, 2006 at 6:23 PM | PERMALINK

Trucking may be taking a big hit, but the railroads are booming. They are also on a hiring binge to replace workers who will retire in the next few years.

Posted by: PhilW on April 22, 2006 at 6:23 PM | PERMALINK

Strange to say, a political situation is available, and not that hard to implement- if we wanted to.

Knock off that "safety regulation" crap and allow the import of small fuel-efficient cars. Set the national speed limit at 50 to protect small cars from the bullies in big toy trucks.

So, if we had a bunch of people who actually cared about the future of the country, it wouldn't be that hard. After WW II the British did without chocolate and butter for years because they cared about their country.

As for the Bush gang, I'm guessing they've already planned their getaway. They've skimmed the cream from the American economy. Now it's "So long, suckers!"

Posted by: serial catowner on April 22, 2006 at 6:27 PM | PERMALINK

At the other end, though, are the people who make less than average and drive more than average. They probably spend 15-20% of their incomes on gasoline. That's a lot.

Using the EIA statistics Kevin linked to by income bracket (pg 57), and the actual reported miles driven by income bracket, and the same 80% disposable income rule, you end up with the following gas expenditures by income bracket at $3/gallon:

Income % (Kmiles, gallons)
$0-5,000 na-47% (13.5, 620)
$5,000-9,999 49-24% (13.4, 647)
$10,000-14,999 24-16% (13.2, 644)
$15,000-19,999 20-15% (16.2, 788)
$20,000-24,999 15-12% (16.6, 794)
$25,000-34,999 14-10% (19.3, 940)
$35,000-49,999 13-9% (23.8, 1183)
$50,000-74,999 10-7% (28.3, 1393)
$75,000-plus 8-na% (31.9, 1549)

Posted by: has407 on April 22, 2006 at 6:28 PM | PERMALINK

I work in the insurance industry, and have always thought it odd that our prices are regulated and controlled by the government, while most other commodities aren't. There is way more competition in the insurance industry than the oil industry, yet we are the market they regulate. Go figure.

Posted by: exhuming mccarthy on April 22, 2006 at 6:29 PM | PERMALINK

KDrum:

"They're probably pretty pissed that that whole Iraq business didn't work out quite the way it was supposed to."

Et tu, Brute?

Finally, Kevin tips his hand and acknowledges what I've been web-broadcasting for ages: The American public acquiesced on the Iraq war because it promised to feed their appetite for cheap oil.

Note: Does this mean the American public as a whole is guilty of war crimes?

Or merely liquid lebensraum?

Posted by: koreyel on April 22, 2006 at 6:31 PM | PERMALINK

koreyel:

"Liquid Liebensraum" -- that's classic.

Bob

Posted by: rmck1 on April 22, 2006 at 6:33 PM | PERMALINK

"Kick Their Ass And Take Their Gas"

Sounded like a good idea at the time.

Posted by: SW on April 22, 2006 at 6:33 PM | PERMALINK

SombreoFallout: nice post on some of the $ involved.

After the fears of the early 70s subsided, Carter's nor any energy policy followed with a view to the future, CAFE regs pushed back until Bush's second energy policy in 5 years (excellent planning and foresight! Thanks for including us in the debate.), the apparently god-given right of US citizens to build how and where they like, drive anything they want, and pay more for bottled water than they do for gas coming halfway around the world, and without bearing the full costs involved, well, the chickens come home to roost. It's going to be more painful than it need have.

Posted by: notthere on April 22, 2006 at 6:35 PM | PERMALINK

As some have pointed out, there isn't enough oil under ANWR to solve all our energy problems. I am also fully aware that for many reasons we need to move away from burning oil for power, and higher prices are going to be an important part of that.

But much of the current oil prices are being driven by emotional market movements, spiking every time some refinery overseas gets stuck, or something happens in the Middle East. Drilling in new areas in the U.S., Alaska, offshore, and elsewhere, will have a positive psychological effect on the market long before the production is up to important levels. And the oil, however much there is, isn't doing anyone any good in the ground.

***

has407:

I suspect that the increased amount of total driving done by higher income brackets is more related to a larger number of multiple cars per family than it is to long driving distances.

It's interesting that those with incomes under $5,000 still have an average of 1.4 cars per family.

BTW, Tigershark is right that Jeb Bush has been among those standing in the road of new oil development.

Posted by: tbrosz on April 22, 2006 at 6:43 PM | PERMALINK

Railroads are booming largely because commodites, specifically coal, is booming. There is not, as of yet, a large scale move from trucking to rail. When was the last time you saw a new big box store within spitting distance of a rail line or with a spur going behind the store? I've not seen one.

Refineries were built in the Gulf of Mex because the original oil boom was in east Texas and hence the pipelines were there. Not to mention all the offshore wells in the GOM. Be kinda stupid to built one somewhere "safer" then have to spend billions on a pipeline to get it there.

Posted by: Alaskan Pete on April 22, 2006 at 6:44 PM | PERMALINK

But much of the current oil prices are being driven by emotional market movements, spiking every time some refinery overseas gets stuck, or something happens in the Middle East. Drilling in new areas in the U.S., Alaska, offshore, and elsewhere, will have a positive psychological effect on the market long before the production is up to important levels.

There you go again! Substituting marketing for policy! Great short term thinking!

And the oil, however much there is, isn't doing anyone any good in the ground.

Thats what red-blooded Americans have been saying about their home equity, too. Why sit on it when you can borrow against it? Wait a few more months to see how wise that reasoning was!

Posted by: troglodyte on April 22, 2006 at 6:53 PM | PERMALINK

tbrosz: It's interesting that those with incomes under $5,000 still have an average of 1.4 cars per family.

However, they don't specify whether or not the cars are working.

Posted by: has407 on April 22, 2006 at 6:54 PM | PERMALINK

Think the price in the UK was about $5/gallon this summer.

It's over $7/gal right now in the UK. Most of that goes in taxes, though, so at least Brits who pay through the rear end to fill up their car don't have to pay again when their credit card bill gives them a heart attack.

Posted by: ahem on April 22, 2006 at 6:54 PM | PERMALINK

Not in cities with good public transportation.
Just sayin'...
And, where would those cities be??

Portland Oregon, Green and Clean

Light Rail, Streetcars, Buses, Urban Area Planning

Posted by: JimPortlandOR on April 22, 2006 at 6:54 PM | PERMALINK

No, I went to Sombrero's link and read the thing.

It neglects to put a price on the convenience of a car.

Riding the bus adds another hour to your day, typically, and at $30/hour for wage earners; the savings are gone. The lost time alone is $6,000 per year.

So also is gone the ability to run short errands to and from work. Eventually one needs a car to go shopping.

If, as claimed, addition bus lines reduce transportation costs by three times, then we would have an industry of private bus lines. We do a litte, namely van pools, which can be cost effective but they are still rare.

The most eficient over all transportation system remains the two door, four cilinder, five year old car. I know, because whenever we have gas prices rise as they are, these cars get swept off the market.


Posted by: Matt on April 22, 2006 at 6:55 PM | PERMALINK

serial catowner:
Why take all the fun away?

All those little euro cars can zoom pretty well. Get on any motorway or autobahn. 85-90mph seems normal. I say regular speed limits for the boxes and 55mph for anything with a dry weight over 4000lbs.

It's spiteful but the SUVs might be close to their advertised 17mpg, and the boxes would still be getting 40+mpg!

And I'm not sure the oil price hasn't worked out exactly how the administration wanted it. Why else would you make such a hash of something the US has proven itself able to do in the past.

Posted by: notthere on April 22, 2006 at 6:55 PM | PERMALINK

"I hate urban SUVs and monster trucks as much as the next liberal, but you can understand why people on moderate/low incomes buy or lease them: lots of manufacturer and dealer discounts (including the ubiquitous cashback), maintenance handled under warranty, etc. It's a buy today, pay tomorrow approach (or, to be honest, an indeterminate long-term rental until it's repossessed) but that's a necessity for too many people.

Want a Civic or (especially) a Prius? Get in line and don't expect the dealer to give you a penny off. Add the fact that there's basically no market pressure in the small car sector (especially with diesel engines, given the crappy standards of DERV) and it's a seller's market."

Are you suggesting that a Civic, Corolla, or Sentra costs more than an SUV? They don't. People are *not* buying SUVs because they're so darn affordable.

Posted by: Cakesniffer on April 22, 2006 at 7:02 PM | PERMALINK

Hey, I didn't say you have to obey the limit. Most people would, most of the time, and that's enough to protect the small car from the rogue driver, and make a dent in how much oil we have to import.

That's why we had the first 55-mph limit- there was a gas shortage.

Posted by: serial catowner on April 22, 2006 at 7:10 PM | PERMALINK

Kevin:

Quite right. Higher gasoline prices function as a regressive tax. Anecdotally, I have a friend from high school who foolishly never went on to college who must drive 30 miles each way to work each day in a factory, where he makes $25,000 per year. A $1 per gallon rise in the price of gasoline really hurts his standard of living and means that he must eat now literally eat Hamburger Helper without the hamburger to get by. These are the people that bluenose plutocrats like Bush cannot possibly relate to or empathize with. However, he is the hardest working man I know and is one of those salt of the earth people who really make America the most productive country on the planet.

Posted by: Stephen Kriz on April 22, 2006 at 7:11 PM | PERMALINK

It looks like the Democrats are going to try to make this into a political issue. They have to somehow connect the high prices with the blah blah blah....

Wow, you must be on the same RNC mailing list as the "liberal" media. ABC and NBC both used almost the exact same wording in their national newscasts.

Posted by: F'in Librul on April 22, 2006 at 7:13 PM | PERMALINK

There's safety in numbers, and if you can need gas less than the average person, you'll get taken care of when they do.

Ride a bike, read a good book on the bus, and you'll be talking the language they understand- because the language they understand is us not buying.

Posted by: serial catowner on April 22, 2006 at 7:17 PM | PERMALINK

And I'm not sure the oil price hasn't worked out exactly how the administration wanted it.
Posted by: notthere on April 22, 2006 at 6:55 PM | PERMALINK

Yes, I'm sure prices aren't high enough for them. There's many a conservative who still complains about waiting in line to pump gas. High prices keep the riff-raff out, donchyaknow.

It's over $7/gal right now in the UK. Most of that goes in taxes, though, so at least Brits who pay through the rear end to fill up their car don't have to pay again when their credit card bill gives them a heart attack.
Posted by: ahem on April 22, 2006 at 6:54 PM | PERMALINK

That's really what this is all about though. Gas *should* be about $7-$10/gallon. The question is - do we, as a society, want this money going to fatcats like the Exxon CEO, who refuses to invest in expanding infrastructure or production capacity, so he can continue to milk a desperate market? Or do we want the bulk of this money going to pay for schools to educate our kids, or paying for public transportation, or sequestering carbon to curb global warming?
Somehow, I don't think the fatcats are going to spend it on something that's going to benefit me. (though, maybe I should brush up on my yacht-building skills, and change careers?).

BTW, Tigershark is right that Jeb Bush has been among those standing in the road of new oil development.
Posted by: tbrosz on April 22, 2006 at 6:43 PM | PERMALINK

Yes, the mafia often sends big tough guys around to the local shops to bust them up when they don't pay their protection money.

Note: Does this mean the American public as a whole is guilty of war crimes?
Or merely liquid lebensraum?
Posted by: koreyel on April 22, 2006 at 6:31 PM | PERMALINK

Yes - but if you suggest as much - you hate America. Don't you?

Posted by: osama_been_forgotten on April 22, 2006 at 7:19 PM | PERMALINK

Yeah, that's going to be a real tough job to connect high prices with the supersecret "Energy Plan by Enron", oil refineries getting blasted in the mideast, and the Texas president brought to you by Halliburton and the oil companies. The average guy has no idea that an oil company would screw him.

But maybe they're quick learners.

Posted by: serial catowner on April 22, 2006 at 7:22 PM | PERMALINK

"The most eficient over all transportation system remains the two door, four cilinder, five year old car. I know, because whenever we have gas prices rise as they are, these cars get swept off the market."

Huh huh, yea don't see many people buying busses when gas prices are high! Or train systems. Not one of my neighbors has started building a subway to take them to work. I definately don't see anybody down at the car dealership not buying a car when gas prices spike! Take that transit commies!

Posted by: jefff on April 22, 2006 at 7:22 PM | PERMALINK

Poor use of statistics. You took the MEDIAN household income of $44,000 to compare to the MEAN gasoline consumption, even though the mean household income of over $60,000 is shown right there on the website. The only purpose for this would be to bias your results. I would have no problem with using the median as an average (although it should be stated), but choosing to use it when comparing to a mean figur is deceptive. In addition, if you are trying to illustrate a point regarding current gas prices, the current average income, not 2004 figures should be used. These may not be available but we can estimate them fairly closely at approx. $48000-49000 (or $66000-67000 for mean). For gasoline usage, you used the average for households with a vehicle, not for all vehicles. I did not find the definite figure, but I believe only about 85% of households have vehicles.Gasoline useage may also have changed downward somewhat both because of better mileage and somewhat smaller household sizes but I do not know for sure. If we adjust only by 85%, we get approx. 950 gallons.

Now the average percentage of income with $3 gasoline(comparing mean to mean) and attempting to adjust for income growth and inflation) would be $2850/$66000 or about 4.3%, not the ridiculous 10% you came up with.

If you are trying to make a point with statistics, it would be more impressive if you tried to use them honestly.

Posted by: jeff on April 22, 2006 at 7:22 PM | PERMALINK

Jeb Bush changed his mind about oil drilling in the Gulf, and it's only a coincidence that he changed his mind after the 2004 election.

http://www.sptimes.com/2005/10/07/State/Bush_defends_gulf_dri.shtml

Posted by: Tracy on April 22, 2006 at 7:23 PM | PERMALINK

For real fun, think back to when you first entered the working world. What was your hourly rate of pay -- in gallons of gasoline?

What's your hourly rate of pay now, in gallons of gasoline?

Posted by: hank on April 22, 2006 at 7:29 PM | PERMALINK

The 55mph limit was brought in to save gas, but that didn't do much overall. Moreover, the dash to buy smaller, more economical cars soon went away. Eerily enough, the supercars were doing great business in Europe and the Middle East just before that crisis. Welcome Bugatti!

The need for a higher gas and energy prices is at least threefold. It gives greater emphasis to more economical vehicles, methods of distribution, production. It also encourages the development of alternative energy sources of all types that have utility in any way and become competitive. The greater overall efficiency contributes to environmental issues.

I think that some of the people who say its regressive against the poor are the same who propose flat tax or sales tax only. Of course there can be an adjustment in tax rates. There are poor all over Europe too and I have never heard this argument used in favor of lower gas prices.

Posted by: notthere on April 22, 2006 at 7:31 PM | PERMALINK

High gas prices at the pump are mostly just an annoyance. The ripple effect through the economy, vis-a-vis the airlines, trucking, and shipping are the real story. If the price of a barrel of oil stays around $70-75, just wait until a Cat 5 hurricane wanders up the Gulf this summer. $110 a barrell anyone?

Posted by: joe on April 22, 2006 at 7:37 PM | PERMALINK

"Huh huh, yea don't see many people buying busses when gas prices are high!"

A cab company would easily by a fleet of vans for van pooling if it were cost effective. Funny thing, it is in many instaces, and cab companies do buy up these vans. Van pooling works for hotels near airports, better than car rentals. There are private chauffer services that collect you from home and take you to the airport, all cost effective when costs are added up. So, contrary to your statement, yes indeed, private companies, owned by individuals do buy up vans and offer commuter services cost effectively.

There are numerous private bus lines that operate from airports to distant destinations. Tourist enterprises use buses in the private sector cost effectively.

So we have an economic model that shows when bus and van commuting is cost effective and when it isn't. Mostly, for work commutes, it is not.

Posted by: Matt on April 22, 2006 at 7:38 PM | PERMALINK

It is all so insane,

the last time we had anything close to energy policy was under President Carter, Kerry was accused of supporting a $$.50 tax per gallon some time ago.

Since then we built more suburban sprawl, moved furthe and further from jobs, got a tax break for huge Hummers instead of energy efficient cars, we now drive tonns of metal to work for hours per day, we refused to provide public transportation because we don't want to share anything with other people not even a ride to work.

And we expect to get it all for pennies.

Now the chickens are coming home to roost, so stop whining, you asked for it.

And our oh so competent liar in chief tals about energy solutions 20 years or never down the pipeline. No comon sense solution for the short term, like taxing the cars based on size, blue book value, public transportation and energy efficiency. All that is just too simple, we will go with sience fiction, like star wars.

Posted by: Renate on April 22, 2006 at 7:42 PM | PERMALINK

jeff
Yeah, statistics are darn hard to use precisely, especially. In this case it looked like all figures were rounded and possibly KD missed the difference of Median and Mean, whether through ignorance or oversight.

However, he netted out taxes which you did not. Can we assume a higher tax rate for your Mean people or not? Anyway, it significantly changes your figure of 4.3%.

Posted by: notthere on April 22, 2006 at 7:47 PM | PERMALINK

Contemplating the gasoline cost situation makes me feel that we are a pampered society.

Our parents and grandparents generation had to deal with REAL adversity. All we are bothered with is whether or not we may have to "carpool". Perish the thought!

Is anyone on this thread REALLY facing economic ruin because of gas prices?

Posted by: sportsfan79 on April 22, 2006 at 7:47 PM | PERMALINK

The assumption that a typical American family pays 20% of their income in taxes is faulty from the getgo. If you plug $44,000 into a tax calculator, like this one at H&R BLOCK:

http://www.hrblock.com/taxes/tools/2005_quickcalc/frameset.jsp

you see that a typical family of four would pay only 4.5% of their income in federal income taxes, even less if they itemize. As federal taxes are by far the largest chunk, there is no way the rest of taxes add up to 20%.
.

Posted by: VJ on April 22, 2006 at 7:47 PM | PERMALINK

VJ
Boy, I don't expect to be defending KD, but talk about nitpicking. KD obviously approximated to make a point and have a rather broader conversation than the angels on a pinhead.

I don't know what the Mean or Median HOUSEHOLD is, but I bet it's not a family of 4.

You guys set yourselves up.

Posted by: notthere on April 22, 2006 at 7:52 PM | PERMALINK

It's obvious why median income is a much preferable metric than mean income. Can the same be said about using mean v. median gas consumption? I'd like some reason to believe that mean and median gas consumption are significantly different.

Posted by: gq on April 22, 2006 at 8:02 PM | PERMALINK

In Ireland I fill up my tank at the equivalent of $5.60 per gallon. My car averages 37.5MPG. The problem in the U.S. is clear, you spend TOO LITTLE for gas, and take it for granted. If you were paying the full price of oil. There wouldn't be a crisis, and you wouldn't be driving SUV's. And the world would be a better place. Less CO2, less pollution, better gas milage in your cars, and better public transport.

Posted by: Branedy on April 22, 2006 at 8:08 PM | PERMALINK

"As federal taxes are by far the largest chunk, there is no way the rest of taxes add up to 20%."

VJ -- You make the mistake many Republicans make. You confuse Federal Taxes with Federal Income Taxes. For most of us (the us who work for a living) withholding taxes--social security and medicare--are more than 4.5%. Our pay checks record them as being around 7.5% but that is only the half that isn't hidden. They are actually around 15%. -- The actual numbers are 2.9 for medicare and 12.4% for social serurity on earned incomes up to $94,200. Of course a big part of those taxes don't show up on your W-2 but are paid by your employer.

I just love it when people confound income tax with federal tax. I don't know if I am dealing with folks who don't work, or if I am dealing with folks who aren't honest. You got a job VJ?

Posted by: Ron Byers on April 22, 2006 at 8:13 PM | PERMALINK

How is it that Fuel can double in Value and the economists dont cry about that, but talk about raising Poverty Wages and they go into spasms about 'Increased cost of Goods'.

Increased Fuel price drives up the cost of every company that relies on Fuel [Plumbing trucks to Airlines] increases in price and they in turn pass that onto the consumer. Yet Min Wage stays the same, in reality it drops because of the fuel increase.

Posted by: Togarmah on April 22, 2006 at 8:15 PM | PERMALINK

VJ
2004 figures, US census 2.57/household overall).

gq
has407 quote above from EIA (have not confirmed but seem right:
income 35-50/- 1183 gallons
income 50-75/- 1393 gallons
so an almost 20% increase in comsumption for an income increase of 36%. Falls in line with marginal propensity to consume, which is why the fat cats are so much FFAAATTTTTTER than even the numbers show.

Posted by: notthere on April 22, 2006 at 8:20 PM | PERMALINK

Many of the folks hardest hit are redstate suburban churchgoers. If the Rapture doesn't happen soon those folks are going to feel betrayed.
Posted by: Ron Byers on April 22, 2006 at 4:26 PM | PERMALINK

Given the Discovery of the Pyramids in Europe, this week, they may have to rethink their Armageddon plans. In fact this MAY have consequences that pertain to the creation of the State of Israel.

Posted by: Togarmah on April 22, 2006 at 8:21 PM | PERMALINK

Who are these people who use 1,100 gallons of gas per year? I drive less than 15,000 miles per year, and own a hybrid, which means I need barely 300 gallons per year. Still too much, but honestly, it's hard to feel too sorry for anyone who owns a gas-guzzler and drives 30,000 miles per year. That's just wasteful.

Posted by: Hudson on April 22, 2006 at 8:21 PM | PERMALINK

Dunno Hudson, but I see alot of people here driving huge SUVS to work and back everyday alone. Looking around in traffic I see few cars with more than 1 person, the majority are SUVs.

I used all of 15 dollars, at these prices, of Gold, err Gas in the last two weeks.

Posted by: Togarmah on April 22, 2006 at 8:29 PM | PERMALINK

Sorry, Matt, but your observation that people are buying small cars when gas prices go up does not prove that the magical free market has determined that cars are the most efficient transportation system. It only demonstrates is that people respond to gas prices in thier car purchases.

"So we have an economic model that shows when bus and van commuting is cost effective and when it isn't. Mostly, for work commutes, it is not."

No, we have an example of a transportation system built assuming, subsidizing, and emphasizing the use of the car for over fifty years leading to most people using cars. You have been socially engineered by your government to depend on your car.

It is all very complicated. One of the main reasons transit systems work relatively poorly here is that the US has relatively low density. The US has low density in part because it has a relatively large car/road transportation system. US cities devote a much larger portion of their land surface to transportation than european cities. Our roads are wider and more numerous, our parking lots and driveways larger. This means that every trip in the US is longer by whatever mode. A walking trip in the US is less efficient than in europe because on average you have to walk across more pavement to get to that non-pavement destination in this country (of course if you just want to find a particularly nice patch of pavement it is likely to be considerably closer). This affects all transport modes, but the reason it exists is that the car/road transportation system uses a lot more land compared with other transportation systems.

Motorcycles and bicycles are a relatively dangerous way to commute in the US, why? Because cars run into them. Similarly walking is dangerous to the extent that it is almost entirely because a car might run a person over over as they cross the street.

Posted by: jefff on April 22, 2006 at 8:33 PM | PERMALINK

Hudson

Should we take your post as a self congratulatory brag, or is your post a part of an elaborate mating ritual where you are trying to impress some member of the opposite sex of your good sense. :) Please take what I have just said in the good spirit with which it was intended. I hope you find the totally logical person of your dreams.

You ask where these people are who use 1100 gallons of gas a year? Well they are all about you if you live in Dallas, or Kansas City, or Los Angeles or Denver or any of dozens of other automobile oriented cities. Recently someone told me that because of a recent job change the husband in the family has to drive a full sized pickup truck 30 miles each way to work. I say "has to" because until the damn thing is paid off they are upside down and can't afford to trade for a Prius. Anyway, the folks using more than 1100 gallons are your friends and neighbors, and they are hurting.

Posted by: Ron Byers on April 22, 2006 at 8:34 PM | PERMALINK

Gasoline taxes aren't the problem. The tax per gallon is fixed. It's roughly $0.40 per gallon here in Texas. It was the same three years ago when I was paying $0.99 per gallon for gas as it was today when I paid $3.09 per gallon.

Notice that means the real price of gasoline before tax went from $0.59 to $2.69 per gallon, meaning it went up to 455% of its previous price here.

Someone has to pay the salary and retirement forthe President of Exxon. It takes a lot of gallons of overpriced gas to pay a single man over half a billion dollars. Then all his assistants, vice Presidents, and mistresses had to get paid in relation to what he did.

I don't care what he did. He wasn't worth the money. But then, neither are Bush, Cheney and Rumsfeld.

Then, since the gasoline taxes haven't gone up in years, we are being told that all the new roads in Texas will be toll roads, and some of the older ones converted to toll roads. These will be built by private contractors, half of which will rip off the toll payers and over charge for the shoddy work they will be doing - Haliburton, anyone? Brown and Root?

Libertarians and fiscal Republicans must be celebrating to beat the band.

Posted by: Rick B on April 22, 2006 at 8:37 PM | PERMALINK

'Ron' posted:

"VJ -- You make the mistake many Republicans make. You confuse Federal Taxes with Federal Income Taxes."

I made no "mistake", and I'm not at all confused.

.

"For most of us (the us who work for a living) withholding taxes--social security and medicare--are more than 4.5%."

FICA is not really a tax, in that the "contributions" are made to a quasi-governmental agency, not the federal government's general revenue coffers.

A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government.
.

Posted by: VJ on April 22, 2006 at 8:37 PM | PERMALINK

All they have to do is sit back and observe while voters make the fundamental connection between an economic scenario that is hurting their ability to survive and the party that has controlled every organ of government for four years and has done nothing to remedy it and many things to make it worse.

The driving force behind fuel price increases has been the increased economic growth of India and China. I am not sure how you blame that on Republicans or Democrats. It probably hurt a little that the Republican energy plan got bottled up in the Congress, but that's actually the fault of members of both parties, and was finally solved when some Republicans agreed to omit the provisions on exploring in ANWR. Politically, it looks to me like a wash.

However, Pres. Bush did try to push for increased investment in biofuels, and increased investment is indeed happening, though mostly at a slow rate.

If gasoline were not worth what it costs, people would quit buying. It just takes time to re-evaluate. It's true that many people have trouble covering the costs of driving to work, but it is also true that many people drive to movies, ball games, barbecues, soccer games, hockey games, and equestrian centers.

How many people here couldn't cut their fuel consumption by 25% by better planning?

Posted by: republicrat on April 22, 2006 at 8:40 PM | PERMALINK

togarmah
Federally, the minimum wage is not indexed in any way and only occassionally raised, so it is always eroding until they decide to raise it.

In Britain, I think the minimum wage is a little over $7/hr on the exchange rate. There are plenty of studies and data showing the effect of an increase on the economy. None of these come close to what the doomsayers say here. Although there is not Hispanic type illegal immigration, there has been a sizable flow from the continent, particularly Eastern Europe, some illegal.

What it really comes down to is lobby strength and idealogical convictions rather than facts.

What's this Discovery of the Pyramids in Europe? I missed that.

Posted by: notthere on April 22, 2006 at 8:40 PM | PERMALINK

I do lot of driving for work. A few years ago(about 2002) I used to spend at most $350/mo for gas. I now am lucky I if my monthly bill will be $750 and BTW I know I do less driving now than I used to. BTW I have gone through 3 cars of the same model so it's not the vehicle or the vehicle getting older. I don't think the SOB in the OO has a clue as to how upset people are at him.

Posted by: mai name on April 22, 2006 at 8:44 PM | PERMALINK

"FICA is not really a tax, in that the "contributions" are made to a quasi-governmental agency, not the federal government's general revenue coffers."

`When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

"A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government."

Ah, so the money I pay to my state that is based on my income is not an "income tax." And the money I pay to my city based on the assessed value of my home is not a "property tax."

Smarter trolls, please.

Posted by: Joel on April 22, 2006 at 8:45 PM | PERMALINK

Guys,

Whilst it hurts, I think its also very important to keep this in perspective of world oil prices. This is an Aussie oil industry site report that shows the oil price & tax component of OECDs here.

It shows that whilst, relatively, Americans have it bad right now with gas prices, you've pretty much got the cheapest gas on the planet.
Everyone else pays the same for the gas component, everyone else pays more with tax. Yet.. many of these countries seem to manage. Why can't the US?

=A bit of international perspective

BC

Posted by: BC on April 22, 2006 at 8:48 PM | PERMALINK

VJ

FDIC is not really a tax? That's funny. It is collected like a tax. The Congress uses the money collected like other tax revenues. Nobody can opt out of it without an Act of Congress. The IRS publication concerning it treats it like a tax. http://www.irs.gov/publications/p54/ch02.html

As I recall the US Supreme Court has held it is a tax.

Your hair splitting is to laugh. I know you have a job and it is working for the CATO institute. Right?

Posted by: Ron Byers on April 22, 2006 at 8:50 PM | PERMALINK

"A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government."

That's ridiculous.

Main Entry: tax
Function: noun
Usage: often attributive
1 a : a charge usually of money imposed by authority on persons or property for public purposes

And if you think the Feds don't spend the excess entitlement income at this point, you're simply wrong. They pass it through in the form of lending to themselves then paying interest back to themselves. It's not a "trust fund" by any stretch of the imagination -- it's an implicit obligation with respect to a future entitlement.

Your definition of a tax, though, was comletely made from thin air.

Posted by: TT on April 22, 2006 at 8:54 PM | PERMALINK

What's this Discovery of the Pyramids in Europe? I missed that.


Experts Find Evidence of Bosnia Pyramid
Researchers Find First Solid Evidence of Ancient Pyramid Under Bosnian Hill
By AMEL EMRIC
The Associated Press
VISOKO, Bosnia-Herzegovina - Researchers on Wednesday unearthed geometrically cut stone slabs that they said could form part of the sloping surface of what they believe is an ancient pyramid lying beneath a huge hill.

Archaeologists and other experts began digging at this central Bosnian town last week to explore the team leader's theory that the 2,120-foot hill covers a step pyramid, which would be the first ever found in Europe.


"These are the first uncovered walls of the pyramid," Semir Osmanagic, a Bosnian archaeologist who studied the pyramids of Latin America for 15 years, said of the stonework found Wednesday.


"We can see the surface is perfectly flat. This is the crucial material proof that we are talking pyramids," he said.


Osmanagic believes the structure will prove to be 722 feet high, or a third taller than Egypt's Great Pyramid of Giza.


The huge stone blocks discovered Wednesday appeared to be cut in cubes and polished.

Posted by: linda on April 22, 2006 at 9:06 PM | PERMALINK

VJ

The social security administration calls the social security and medicare taxes, taxes. http://www.ssa.gov/pubs/10003.html

I guess you are the last American standing who denies that they are taxes.

Posted by: Ron Byers on April 22, 2006 at 9:08 PM | PERMALINK

'Ron' posted:

"FDIC is not really a tax?"

You mean FICA ?

.

"The Congress uses the money collected like other tax revenues."

They do not.
.

Posted by: VJ on April 22, 2006 at 9:10 PM | PERMALINK

For calculation of "disposable income", the Bureau of Economic Accounts includes individial FICA contributions and personal taxes on the debit side, and includes, e.g., employer contributions to FICA, VA benefits, rental income, unemployment, etc., etc. etc., on the credit side (see here)

However, I think what Kevin was referring to was more like "how much do I have to spend vs. gross income on regular basis". 20% looks high; maybe more like 15%, based on a quick perusal of other sources.

Posted by: has407 on April 22, 2006 at 9:14 PM | PERMALINK

Maybe VJ is a retired republican.

They tend to go through some serious contortions to justify the fact that they are living off a check from the federal government.

Posted by: jefff on April 22, 2006 at 9:15 PM | PERMALINK

'Ron' posted:

"The social security administration calls the social security and medicare taxes"

I'm quite aware that numerous people call things by the wrong nomenclature.
.

Posted by: VJ on April 22, 2006 at 9:16 PM | PERMALINK

linda, thanks. I'll restrain my credibility for the moment!

VJ, show me the trust fund deposits. Whoops, they're empty. Have we been robbed?

republicrat, just the knock-on effect the economy doesn't need. Can't afford the gas, cut the ballgame, movie, trip, etc. The effect will be worse here because gas prices will move more proprtionally. We use 1 1/2-2 times as much energy as Western Europe or Japan and it's very much cheaper.

jeff, nice summary. I thought about getting into that. Until after WWII and the "liberation" of the car, there was little sprawl or commuting. Work was closer to home. Here in the Twin Cities, after (I think) GM bought the tramlines, they ripped them out and we've been sprawling ever since. Opened our first light rail line 18 months ago after investing hundreds of millions (fed and state) $$. It had 3 times the expected ridership from the getgo.

Posted by: notthere on April 22, 2006 at 9:19 PM | PERMALINK

VJ

Mr. Justice Harland called Social Security payroll withholding a tax in FLEMMING V. NESTOR 363 U.S. 603 (1960).

As to the Congress using the money as it sees fit, remember when President Bush went to that building and couldn't find the social security trust fund. Instead he found a lot of pieces of paper. Well the money collected for social security is being used by the Government to finance your Republican tax cuts right now. That is why Social Security is in trouble.

Posted by: Ron Byers on April 22, 2006 at 9:19 PM | PERMALINK

'TT' posted:

"And if you think the Feds don't spend the excess entitlement income at this point, you're simply wrong."

I'm afraid you're the one that is wrong.

.

"They pass it through in the form of lending to themselves then paying interest back to themselves."

They do not.


"It's not a 'trust fund' by any stretch of the imagination"

Of course it is.
.

Posted by: VJ on April 22, 2006 at 9:21 PM | PERMALINK

Oh yes the Pyramid? Pretty Cool Eh?
Kinda changes things for the European Jews, or what used to be known as Khazar.The Thirteenth tribe... Anyhoo, something rang a bell about China and OIL, and of course Bush. As you see China is a possible target, but read this, I'll allow the reader to connect the dots so to speak.
~~~~~~~~~~~~~~~
shape exists around Turkey, Perh
Kazakhstan, the largest of the former Soviet republics in territory, excluding Russia, possesses enormous fossil fuel reserves and plentiful supplies of other minerals and metals. It also has a large agricultural sector featuring livestock and grain. Kazakhstan's industrial sector rests on the extraction and processing of these natural resources and also on a growing machine-building sector specializing in construction equipment, tractors, agricultural machinery, and some defense items. The breakup of the USSR in December 1991 and the collapse in demand for Kazakhstan's traditional heavy industry products resulted in a short-term contraction of the economy, with the steepest annual decline occurring in 1994. In 1995-97, the pace of the government program of economic reform and privatization quickened, resulting in a substantial shifting of assets into the private sector. Kazakhstan enjoyed double-digit growth in 2000-01 - 9% or more per year in 2002-05 - thanks largely to its booming energy sector, but also to economic reform, good harvests, and foreign investment. The opening of the Caspian Consortium pipeline in 2001, from western Kazakhstan's Tengiz oilfield to the Black Sea, substantially raised export capacity. Kazakhstan also has begun work on an ambitious cooperative construction effort with China to build an oil pipeline that will extend from the country's Caspian coast eastward to the Chinese border.

Posted by: one eye buck tooth [X^B on April 22, 2006 at 9:23 PM | PERMALINK

Kazakhstan also has begun work on an ambitious cooperative construction effort with China to build an oil pipeline that will extend from the country's Caspian coast eastward to the Chinese border.
~~~~~~~~~~~~~~~~
For those that didn't catch the DOT. here tis,,

Posted by: one eye buck tooth [X^B on April 22, 2006 at 9:26 PM | PERMALINK

VJ
You're happy to contradict everybody but haven't raised one single piece of evidence to back the argument.

I think you just enjoy the perverse attention. Do you spank yourself?

Posted by: notthere on April 22, 2006 at 9:27 PM | PERMALINK

Shorter VJ: "I have no support for my POV, so just take my word for it."

Smarter trolls, please.

Posted by: Joel on April 22, 2006 at 9:28 PM | PERMALINK

'notthere' posted:

"VJ, show me the trust fund deposits"

SURE.

Go here:

http://www.ssa.gov/OACT/ProgData/investheld.html

and click on 'Submit Request'.

You will find the list of $1,859,440,665 in Treasury Securities.
.

Posted by: VJ on April 22, 2006 at 9:28 PM | PERMALINK


Can we please get more informed posters to this forum ?
.

Posted by: VJ on April 22, 2006 at 9:30 PM | PERMALINK

As I'm sure that Kevin and you all know, how the rise in gas prices is affecting us at the tanks is the least of it. The way that we have built our American lifestyle has been on the presumption that gas/oil will always be plentiful and cheap. From our mass migration to the suburbs, to shipping our food in from halfway around the world, it all hinges upon cheap oil.

Just about everything in our modern world requires petroleum to manufacture. When the price of oil in the barrel goes up, so does the price of everything else. That is going to set off a chain reaction of an unavoidable economic cataclysm throughout the U.S.

It's difficult to look at the 'perfect storm' of economic factors that are coming to fruition and not believe that it wasn't a grand scheme concocted by neocons a generation or so ago, to achieve the wildest of their ideological dreams: Attainment of mythic wealth, not having to pay taxes, getting rid of government altogether with those ever-pesky regulations (by bankrupting the country), privatizating the nation's resources and selling them all off to the lowest bidders, developing an economic class system where upward mobility is next to impossible, installing a foreign policy of brute force (and nukes, lots of nukes, big ones, little ones, medium-sized ones), no UN, no diplomacy. Order in the streets shall be maintained by paramilitary police agencies after the elimination of citizens rights. Prisons shall be privatized and lots of new ones will be built throughout the nation.

It didn't take a conspiracy theorist to see this coming. He certainly tried to warn us. As did many other liberals.

Posted by: Maven on April 22, 2006 at 9:31 PM | PERMALINK

VJ, you poor, pathetic moron.

Two things happen with SS taxes. Much of this money is transferred by the government to current benificiaries (like my parents and my in-laws). Some of it us used to purchase treasuries (the "trust" funds), which are currently used by the general fund to do the government's business. By around 2018, the "trust" fund purchases will stop, and all funds will go to support current benificiaries; also, the treasuries will start to come due.

All--yes *all*-- of social security taxes will be spent by the federal government. Thus, even by your stupid definition, SS taxes are "taxes."

Smarter trolls, please.

Posted by: Joel on April 22, 2006 at 9:35 PM | PERMALINK

Sorry about that.

He certainly tried to warn us.

Posted by: Maven on April 22, 2006 at 9:36 PM | PERMALINK

"Can we please get more informed posters to this forum ?"

The level of accurate information will go up as soon as you leave, VJ. I can't help but notice that you have not backed up your POV by a single citation. You're blowing smoke.

Smarter trolls, please.

Posted by: Joel on April 22, 2006 at 9:37 PM | PERMALINK

I do lot of driving for work. A few years ago(about 2002) I used to spend at most $350/mo for gas. I now am lucky I if my monthly bill will be $750 and BTW I know I do less driving now than I used to. BTW I have gone through 3 cars of the same model so it's not the vehicle or the vehicle getting older. I don't think the SOB in the OO has a clue as to how upset people are at him.

As pointed out by others, the US has the cheapest gasoline. The president has proposed to boost energy production of all kinds, but the only near term solution is for consumers to consume less.

A writer drew attention to the pipeline being built from Kazakhstan to China. There are other pipelines being built to China, as well as new pipelines to Turkey and Western Europe. When they are completed there may be some reduction in prices, but global demand for oil is not going to decline -- except occasionally during business recessions.

Posted by: republicrat on April 22, 2006 at 9:38 PM | PERMALINK

VJ
Are you sure your figure is right?
Ahh. $1,859,440,665 of securities in the company that owes
$8,379,429,663,827 and runs a $400,000,000,000 deficit every year, plus an OFF BUDGET war now running $350,000,000,000 and rising.

Our future is secured because that money has been invested in what precisely?

Posted by: notthere on April 22, 2006 at 9:43 PM | PERMALINK

I stand corrected; from the BEA:

1) Personal income: $10484
2) Personal taxes: -$1241
3) Personal disposable income: $9243 = 88%

For "how much do I take home?":

4) Subtract personal FICA countbutions: -$433 = 84%
5) Subtract employer FICA/pension & insurance contributions: -$999 = 75%

Kevin's "20%" is a pretty good (if not precisely defined) estimate.

Posted by: has407 on April 22, 2006 at 9:44 PM | PERMALINK

Note: the above BEA numbers are quarterly (for Q4-05)

Posted by: has407 on April 22, 2006 at 9:47 PM | PERMALINK

A writer drew attention to the pipeline being built from Kazakhstan to China. There are other pipelines being built to China, as well as new pipelines to Turkey and Western Europe. When they are completed there may be some reduction in prices, but global demand for oil is not going to decline -- except occasionally during business recessions. -Republicrat
~~~~~~~~~~~~~~~~~~~~
Wars, such as Iraq, have made the price higher as well. The Oil was to pay for that war, according to Wolfowitz and ilk. Yet Today we import gas into Iraq, not to mention the rise in military consumption of fuel and fuel products.

And more War looks to be on the Horizon.
I drive an Economical Car, and use little gas. But to go to war for it? I think I would rather work at home and grow my own produce thank you very much =), but I agree with your post in general.

Posted by: one eye buck tooth [X^B on April 22, 2006 at 9:49 PM | PERMALINK

I am going to try to make the switch to public transportation next year for getting to and from my job--it's 30-some miles away, and I just hate to think of all the money flying out my car's tailpipe.

Another point, as well--I heard somewhere that it takes quite a bit of fuel to raise a bushel of corn. How much will fuel prices affect supermarket prices?

Some charts re Indian and Chinese demand for oil, and also in reference to oil reserves around the planet, would be handy.

Posted by: Arthur on April 22, 2006 at 9:52 PM | PERMALINK

Well as long as some guy is getting rich somewhere that makes it all alright.


Posted by: owlbear1 on April 22, 2006 at 10:14 PM | PERMALINK

Kevin,

Though provoking post as always, but please refrain from using "average." Our right wing opponents say "average" and go on to cite *mean* income level, when *median* income is the actual relevant metric. So please tell the reader which you are using in both the "average" income and "average" gas consumption statistics.

Posted by: Jon Cogburn on April 22, 2006 at 10:18 PM | PERMALINK

Just about everything in our modern world requires petroleum to manufacture. When the price of oil in the barrel goes up, so does the price of everything else. That is going to set off a chain reaction of an unavoidable economic cataclysm throughout the U.S.

Don't worry. I'm sure that the FED will raise interest rates to stave off inflation.

That, or exclude "volotile energy and food prices" from the computation of official inflation statistics. You know, so that inflation doesn't look so bad and panic all those panicky stock and commodities traders.

Posted by: osama_been_forgotten on April 22, 2006 at 10:21 PM | PERMALINK

Linda,

Re: the Bosnia Pyramid

Do we know what the Cal Tech/MIT pranksters were doing last summer?? This would beat stealing a cannon.

Kidding aside, I missed it too. Ain't Google Great? MSNBC.

Posted by: Rick B on April 22, 2006 at 10:28 PM | PERMALINK

"A writer drew attention to the pipeline being built from Kazakhstan to China. There are other pipelines being built to China, as well as new pipelines to Turkey and Western Europe. When they are completed there may be some reduction in prices, but global demand for oil is not going to decline -- except occasionally during business recessions.

Reduction in prices? Maybe. For China! Their demand is still rising. If the oil flows more steadily to China, where they want it, why do you think prices for the US will go down? No way, sry.

Posted by: Gray on April 22, 2006 at 10:31 PM | PERMALINK

VJ,

"It's not a 'trust fund' by any stretch of the imagination"

Of course it is.

Yes, but the trust fund is only for the incremental part of the FICA tax which is above the benefits paid out each year. The tax is set at a level that covers the year's anticipated benefits, with a small surplus as a safety factor. The trust fund is strictly for that small surplus.

The Reagan era increases in the tax rate were accompanied by a reduction in benefits so that the trust funds could build up enough money to pay the benefits for the Baby boomers in the most likely planned benefit scenario. But that was the money Bush used to pay his tax cuts for the rich, so it falls back on the General Revenue funds to pay that portion.

FICA is, by the way, clearly a tax and is called such by the Social Security Administration, by the IRS which is responsible for its collection and by every reputable accountant in the business. The tax is 7.65% on gross revenue up to the annual max on each worker, and another 7.65% tax on the employer for each dollar paid in wages. Both are called taxes, and if you are self-employed you pay the entire 15.30% tax yourself. That's in addition to your income tax.

Posted by: Rick B on April 22, 2006 at 10:41 PM | PERMALINK

Maven (9:36pm) and Arthur (9:52pm) are both right.
The impact of the increases in fuel costs on personal driving and on the costs of transportation of goods, as great as they may be, are the least of our concerns.
Virtually EVERYTHING we make/consume is highly dependent on petrochemicals -- but in ways that make the petro virtually irreplaceable, unlike its use in personal transport. IIRC, Kodak just this week announced increases in their selling prices for film (in which petrochemicals are a significant ingredient) of 3-17%. Petrochemicals are crucial components of many fertilzers, and almost all plastics.
I'm not sure why we haven't seen greater increases in the costs of everything else yet (competition from lo-cost producers abroad? firms' abilities to absorb the cost increases so far because of holding down employment & tax costs and the resulting record-high profits they've enjoyed recently?). But I think major increases in the costs of whole sectors of goods are inevitable if oil prices remain high -- as it seems very likely that they will.
And the increasing divergence in incomes that we've been suffering these past few decades will get even worse as a result.
If we don't speed up the conversions to alternative fuels and more efficient vehicles, we're in for a hell of a ride.

Posted by: smartalek on April 22, 2006 at 10:42 PM | PERMALINK

I'm not sure why we haven't seen greater increases in the costs of everything else yet

Yes you are. You know damn well. Labor is taking up the slack. Productivity is up, while wages are down. Duh.

Posted by: osama_been_forgotten on April 22, 2006 at 11:02 PM | PERMALINK

Gas,grass or ass nobody rides free--- come on how many rednecks at Nascar tonite .... it's the old I'm doing good but my neighbor isn't, crap !

Posted by: Bob Who on April 22, 2006 at 11:09 PM | PERMALINK

Are you suggesting that a Civic, Corolla, or Sentra costs more than an SUV? They don't. People are *not* buying SUVs because they're so darn affordable.
Posted by: Cakesniffer on April 22, 2006 at 7:02 PM | PERMALINK

SUVs are not built to car standards, they're classed as trucks and therefore don't have to meet the same CAFE and safety standards-therefore they are cheaper to build.
This makes them appear to be a better "value".

I bought a new Honda Civic in 2003-didn't the rest of you see this coming?

Posted by: doug r on April 22, 2006 at 11:10 PM | PERMALINK

I'm sure that the FED will raise interest rates to stave off inflation.

That, or exclude "volotile energy and food prices" from the computation of official inflation statistics. You know, so that inflation doesn't look so bad and panic all those panicky stock and commodities traders.

Yeah, it would be just like this administration to cook the books, and hoodwink the American public into believing their dollar is buying a lot more than it really is. [Are my eyes getting worse, or is a pint of Haagen-Daaz more like 12 oz.?]

If the Fed raises interest rates to hold down inflation, it will mean that all consumer loans will get more expensive - the recessionary effect associated with the Fed's attempts to harness inflation.

Posted by: Maven on April 22, 2006 at 11:14 PM | PERMALINK

"Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes."

In the original 1935 law the benefit provisions were in Title II of the Act (which is why we sometimes call Social Security the "Title II" program.) The taxing provisions were in a separate title, Title VIII. There is a deep reason for this, having to do with the constitutionality of the law (see discussion of the Constitutionality of the 1935 Act).

As part of the 1939 Amendments the Title VIII taxing provisions were taken out of the Social Security Act and placed in the Internal Revenue Code. Since it wouldn't make any sense to call this new section of the Internal Revenue Code "Title VIII," it was renamed the "Federal Insurance Contributions Act."

The payroll taxes collected for Social Security are of course taxes, but they can also be described as contributions to the social insurance system that is Social Security. Hence the name "Federal Insurance Contributions Act."

So FICA is nothing more than the tax provisions of the Social Security Act, as they appear in the Internal Revenue"


http://www.ssa.gov/mystatement/fica.htm

These are defined as taxes by the collecting agancy. Only a moron could possibly ignore the seven times they are referred to as taxes.

Okay. This strawman is now aflame. Back to the gasoline thread.

Posted by: jcricket on April 22, 2006 at 11:26 PM | PERMALINK

I walk to work. Nyuk, nyuk, nyuk.

Posted by: doug on April 22, 2006 at 11:27 PM | PERMALINK

Uh-uh!
Matt at 8:55 wrote:

No, I went to Sombrero's link and read the thing.

It neglects to put a price on the convenience of a car.

Riding the bus adds another hour to your day, typically, and at $30/hour for wage earners; the savings are gone. The lost time alone is $6,000 per year.

So also is gone the ability to run short errands to and from work. Eventually one needs a car to go shopping.

If, as claimed, addition bus lines reduce transportation costs by three times, then we would have an industry of private bus lines. We do a litte, namely van pools, which can be cost effective but they are still rare.

The most eficient over all transportation system remains the two door, four cilinder, five year old car. I know, because whenever we have gas prices rise as they are, these cars get swept off the market.

Posted by: Matt on April 22, 2006 at 6:55 PM | PERMALINK

1. The time spent on a bus cannot be counted as lost wages -- the commuter is on his/her own time. There is no potential to get a second job. Their free time is not charged as an opportunity cost for any other activity -- not when they stand in line at the bank, not when they wait at red lights in their car or are stuck in traffic. -- In fact, time on a bus is an amenity, enabling them to read, relax, -- or even work.

2. You fail to weigh this hypothetical cost against the real cost of time lost stuck in traffic in cars. If an hour on the bus costs, then an hour in the car also costs. And the real costs of traffic congestion are very high -- unlike the hypothetical abstract 'costs' of public transit you're talking about.

3. Will people pay more for convenience? Sure. But where is this free market in "pricing" convenience that you speak of? First, public transportation can be more convenient than spending 45 minutes in the car to go grocery shopping. $6,000/year for "convenience" is exorbitant, and is ludicrously priced, bearing no relation to any sort of free market. It is also a REAL cost, not like the nonexistent cost you invent, but no person actually pays.

If people live near shopping and work, there's a cost to that factored into land/housing. But the cost of stepping out of your house, down the street, and into a grocery or light rail is not only 'free,' it's priceless.

3. Finally, No, folks do not necessarily need a car to go shopping. Not if they live near retail or grocery. Errands can be done on the commute to and from work, and by using rental vehicles or community cars. More than paid for through saved vehicle costs.

4. Finally, who said you have to give up a car just because you use public transit? I own a car, am recouping > $5500/ year in operating costs, am not sacrificing convenience. Getting ahead at work by reading on the way, but am not losing time over driving.

Oh, did I mention that I'm in better shape than those who spend more time driving to the suburbs? Saving money on health costs is going to make for a wealthier and healthier retirement...

Posted by: SombreroFallout on April 22, 2006 at 11:28 PM | PERMALINK

Make that $3 a gallon, buster.

Furthermore, those extra dollars spent are not deductible so you can't talk about 20% tax rate - more like 35% since it's cutting dollars of spending power off the top end of the income.

Then too, it's a smackdown expense. People are confronted with it every time they fill up and see the price as double what it used to be not so long ago.

More like 10% of spendable income for a $44,000 wage earner. I'd say 10% is getting damn close to a pain threshold. Puts fuel costs on a par with car payments.

Posted by: ljr on April 22, 2006 at 11:29 PM | PERMALINK

Are you suggesting that a Civic, Corolla, or Sentra costs more than an SUV? They don't. People are *not* buying SUVs because they're so darn affordable.
Posted by: Cakesniffer on April 22, 2006 at 7:02 PM | PERMALINK

SUVs are not built to car standards, they're classed as trucks and therefore don't have to meet the same CAFE and safety standards-therefore they are cheaper to build.
This makes them appear to be a better "value".
I bought a new Honda Civic in 2003-didn't the rest of you see this coming?
Posted by: doug r on April 22, 2006 at 11:10 PM | PERMALINK


Let us not forget the Bush/Republicans' "business-friendly" tax deductions:

In the 2002 tax year, a small business that buys an SUV weighing more than 6,000 pounds can claim a $24,000 advanced depreciation deduction, plus a special depreciation deduction of 30 percent of the remaining value of the vehicle, plus the standard deduction of 20 percent of the remainder. For a $50,000 SUV, the deduction amounts to $35,440.

But the deduction for cars and SUVs weighing less than 3 tons is capped at $7,660. This gives the $50,000 SUV a $27,780 tax advantage.

They were practically giving them away.

Posted by: Maven on April 22, 2006 at 11:36 PM | PERMALINK

"In fact, time on a bus is an amenity, enabling them to read, relax, -- or even work."

Great, we can just define our way out of this mess. Spend all our time on the bus, and the economy is perfect.

"You fail to weigh this hypothetical cost against the real cost of time lost stuck in traffic in cars."

Buses always take longer, quit lying. There are exceptions, and I have named them; airports are one example where the car takes longer. There are others, mainly when many people arrive at a common industry or plant. Cabs and frequent buses work best in congested downtown because of the parking cost. San Francisco, crammed onto a hill makes public transit work.

"...by using rental vehicles"

OK, another definition change, a rental car is OK for errands, a leased car is not.

"Finally, who said you have to give up a car just because you use public transit?"

Never said that, in fact I strongly implied the opposite, one still needs a car. Of course, now that you have a car for shopping, you find it more efficient to use the car for work and shop on the way home. Ever try taking a load of groceries home on the bus?


What I plainly said was, when common transport is more efficient, private companies take up the charge. Many socialist do not believe this, I know, but it is almost always true.

Posted by: Matt on April 22, 2006 at 11:43 PM | PERMALINK

If you think $3 is bad, wait until you see what it looks like after the new run-up that's just around the corner.

Posted by: pj_in_jesusland on April 22, 2006 at 11:46 PM | PERMALINK

smartalek, cost of Kodak film, Silver may well be a greater contributor.

Bush just got upset because Iran, Pakistan and India just agreed a pipeline. Couldn't make more economic sense for the 3 of them. But GW doesn't believe in markets. He believes he can get what he wants by bullying. They're asleep at the deadman's handle.

I swear, if I hear "perfect storm" again I'll . . . I'll . . .Just drop it will you.

The 70s OPEC price rises were larger, more sudden, and maintained. We've only recently reached the same highs in real terms. Oil consumption was a more influential proportion of our economy. We went straight into stagflation. Interest rates will not be raised if oil prices rise because: 1) the price rises are an exterior influence which interest rates will do nothing to ameliorate 2) that rise in itself will have a depressing effect on the economy.

As long as the Mid-East, Venezuela, etc. aren't dragged into some conflagration and the taps stay open, the US has as much or more strength as anyone to survive the upset, hard as it may be. If it happens soon, whether this administration has the brains and flexibility to pick a route through it I severely doubt.

If there is going to be the real perfect storm it's probably the environment.

Posted by: notthere on April 22, 2006 at 11:47 PM | PERMALINK

VJ's playing doing the "Dead Parrot" sketch troll. A classic.

Posted by: TT on April 23, 2006 at 12:01 AM | PERMALINK

'TT' posted:

"VJ's playing doing the "Dead Parrot" sketch troll. A classic."

No, I'm not.

Posted by: VJ on April 23, 2006 at 12:04 AM | PERMALINK

Matt:
"Great, we can just define our way out of this mess. Spend all our time on the bus, and the economy is perfect."

On the contrary, you defined your way INTO an abstract, nonexistent 'cost' that no one ever pays.

Further, many auto commuters also spend their valuable '$30/hour' otherwise free time, stuck in congested traffic, on longer than necessary drives to distant suburbs. You neglected to weigh those two costs against each other.

You also omit to mention that a transit -- not merely bus -- rider can use their time, while a driver cannot. Either profitably or as liesure time. What's more, when you live closer to work, the time on transit is MUCH less than that of a suburban car-owner. What makes you think they'd live in the same place? Shop at the same stores?

Parking isn't FREE just because a city is spread out. You just pay the very heavy costs through increased rents, increased product costs, and lower wages.

This is goofy "Never said that, in fact I strongly implied the opposite, one still needs a car." I said the opposite of what you took it to mean. The transit rider bears no extra inconvenience in order to go shopping, because a) they may also own a car, but not overuse it for trips that don't add value; and b)it may not be inconvenient at all to go shopping due to proximity to retail and/or transit.

Mostly your argument falls to pieces because after a very small set of high-value trips, extra trips by automobile are of very marginal value. So you're stuck with an exorbitantly costly beast of a vehicle running trips you really don't need to do or don't require a car.

Finally, why the HELL would a private company ever bother entering markets that public transit can serve more efficiently? You need to do a little research. If it's democracy -- there's nothing socialist about it.

Of COURSE, you ignore the public subsidies of highways, auto & gas industries, and suburban development patterns --- HEY THAT's SOCIALISM!

A little consistency would make you feel a whole lot better.

Oh, more jobs are created via public transit projects than by highway building. Go figure.

Posted by: SombreroFallout on April 23, 2006 at 12:11 AM | PERMALINK

Just so you have the correct numbers, here is cost of gas as a percentage of after-[income]tax income at current gas prices:

Avg 5.3%
$10-$15K pretax income cohort 10.8%
$5-$10K pretax income cohort 13.8%

Posted by: TT on April 23, 2006 at 12:43 AM | PERMALINK

"..on longer than necessary drives to distant suburbs.."

This is a new issue you raise, sprawl.

"Parking isn't FREE just because a city is spread out."

I started with the link you suggesed which factored in the parking costs, and went from there. The original link did not include the cost of convenience, they simply mentioned it as an un-necessary part of life that we can do away with. Convenience is money. Time spent on the bus can be converted into time at work.

"Finally, why the HELL would a private company ever bother entering markets that public transit can serve more efficiently?"

Well, you state a conclusion, then offer that conclusion as proof of the conclusion. I said that the best indicator of the feasibility of public transit can be taken from the private sector when private companies step in. The opposite argument also holds, when government steps in, it is generally because some function is inefficient.

Posted by: Matt on April 23, 2006 at 12:54 AM | PERMALINK

Why America is doomed to slither down into the ranks of every other country: We cant think big or creatively, anymore. All the posters above propose fixing around the edges. Even small changes in our national habits would run into such a storm from the entrenched interests that you might as well not bother.

Realizing what a damn fool thing it is to propose an actual solution to oil dependency, crowded highways and pollution caused by automobiles, heres mine:

Free public transportation.

Think about it, if public transportation were free and good, how much would we cut into car miles traveled? Good is an absolute necessity, though. Little waiting, busses and trains available at all hours. Modern, even glamorous vehicles. Of course taxes would increase, but look what you get:

1. A huge boon for lower income people. Better than any other income redistribution plan.

2. Middle income people could get rid of one car. More than offsets the higher taxes.

3. Upper income would be expected to keep their cars. They would never rub shoulders with us regular folks. But how much would uncluttered highways be worth to them?

4. Road building could come to a stop. Big savings there, too. Put a stop to the paving over America.

All good reasons, but not a chance. I have just offended practically every interest in the U.S. We need to close this country down and start over.

Posted by: James of DC on April 23, 2006 at 1:49 AM | PERMALINK

James of DC:

As long as we're re-inventing the laws of economics, how about just making gasoline free?

"Make somebody else pay for it" is not the same thing as "free."

Incidentally, to the best of my knowledge, there is not one major mass transit system in America that is making enough money to pay for itself without tax subsidies, so at least we're partway there.

Pretty much anyone who wants to use mass transit already does. Around here, a lot of people do. Some are lucky enough to live close to each end of a transit corridor around here, like CalTrain or BART, and have long commutes otherwise. For most other people, the car is faster, even in traffic, if you're going somewhere the transit doesn't. Even with heavy use, the transit is expensive enough to operate that it needs subsidies.

I have a lot of sympathy for those who don't have much money but have to make a long commute. I'm fortunate not to have to do that.

Still, I take my kid to school in the morning, then drive my wife to work. I take her lunch later, then pick up my kid. At the end of the day, I pick up my wife. It's hard for her to walk in and out to parking lots, so I help out by doing all that. Meanwhile, there's grocery shopping and other things. All this would be very hard to do on mass transit, but I have noticed that my lifestyle would be perfect for a practical electric car.

Posted by: tbrosz on April 23, 2006 at 2:43 AM | PERMALINK

James of DC

Why America is doomed to slither down into the ranks of every other country: We cant think big or creatively, anymore.
We never could think big or creatively except when at war and scared. The real advantages of essentially vacant land (after the Indians died off or were pushed out), great timber and water power resources, and a water and seacoast trensportation net that couldn't be matched anywhere else in the world between the Mississippi, Great Lakes, St. Lawrence and Atlantic coast it would have been dificult for the Northeast to fail.

The labor shortage timed with the invention of rail and steam in Great Britain was pure good luck. America was a vacant land designed to be industrialized and the German settlers were designed and trained to settle it.

This all started to run down when WW II hit and destroyed all the other industrial nations in the world, so that the late 40's and 50's the already industrialized U.S. had a whole world of demand to fill and no competiton. But in the 60's Germany and Japan became real competiton, and began eating into the profits. It took American managers 20 years to realize that quality sold, and the Japanese weren't winning just because they had cheaper labor.

The auto industry never did figure out how to compete, which is why they are essentially bankrupt right now.

Academic Psychologists spent the 50's through the 70's creating business schools and the discipline of management, which for the most part was taught to Japanese and Asian managers. In the meantime, America's great ideas went into banking and creating new financial instruments instead of production of goods. Well, guess what. Finance doesn't have a country. It goes anywhere.

So tell me. What great ideas have Americans had? The amazing American economy was primarily good luck, timing, and a land with a lot of resources, water transportation, and short of labor. No great ideas. Just luck and location. And the gravy train is finished. Americans are going ot have to start thinking and working to compete.

And of course, the government is talking about selling the internet to the phone companies. Now there's a big idea. For failure. They'll suck the money out of what should be free infrastructure as it is in South Korea and other nations who are passing America up economically. That's one idea that is purely self-destructive, as is everything Grover Norquist spouts.

Posted by: Rick B on April 23, 2006 at 2:46 AM | PERMALINK

Sprawl is not a new issue, but inextricably linked to every analysis of transportation, including this ongoing discussion.

People make tradeoffs regarding convenience, swapping one form for another. There are costs no matter which choice is made. The question is, how much do you want to pay, who bears the costs, and which form of convenience you prefer.

But it is false to say that one form is convenient, but the other is not. It is false to say that one has costs, and the other does not. The time of someone trapped in traffic is just as valuable or costly as that of someone riding the train.

It's meaningless to say that time spent on the bus can be converted to work when a) people would have to leave the house earlier to be able to do that, thus incurring the same time & costs in travel; b) time spent in the car can also be converted to work; c) time commuting is personal time not work time, and not convertible to work functions for salaried and hourly employees; d) time on a train can be used productively, but in a car you can't.

I.e., time is ONLY valuable if you can sell it. And no one is buying the time you spend in a car or on the train.

EVEN if you concede that employees earning commission could make profitable use of that time, they still have to get to work, and so must leave earlier -- again using personal time.

Their cost remains in time, not money.

It's nice -- but erroneous -- for economists to hypothesize that someone could be earning $X/hour while on the train. But try getting a second job that begins the moment you get in your car. Or ends in your garage. But you'll learn it's worthwhile to call bullshit on claims that cannot be carried out in practice.

IT may be that van pools, etc., may conpete w/private care moe than rail transit. Because hey're les efficient than automobiles.

The issue is control.

Posted by: SombreroFallout on April 23, 2006 at 2:49 AM | PERMALINK

If free public transportation helps the transportation sector then free housing would help the housing sector and free shoelaces the shoelace sector.

Here is a better idea. High oil prices. The current high oil prices represent the future cost of oil as oil investors lock up future oil in expectation of peak oil. Oil reserves are more valuable when the end of the oil economies are in sight.

If the speculators are right, and Kevin's peak oil links seem to agree, then what we are seeing is the proper corrective action, lock in the future price of oil to reduce current demand.

The proper response would be to, drive smaller cars, drive less, use transit when it saves time and energy and move into the city. In other words, use less oil and adjust our lifestyles to the proper price of oil.

Thank god for future oil speculators, for they give us a signal that we must prepare.

Posted by: Matt on April 23, 2006 at 2:50 AM | PERMALINK

--> Free public transportation.

Once gasoline is $6 per gallon then public transport will seem free.

Ive come late to the party on this thread, but it is encouraging to read so many honestly-argued viewpoints. So many of Kev's threads these days are just troll-chasing exercises.

Folks, the USA has built its infrastructure on the assumption of cheap oil. Our deeply held cultural values center on the personal automobile. We are looking forward to at least a decade of wrenching social change.

Im living in Europe this year and witnessing what $6+ gallon does to the urban lifestyle. People walk a lot. The busses are frequent and full. Housing is denser. Small apartments and low-rise residential structures. There are some negatives -- the college students across the wall of my flat tend to party late on weekends.

But I dont drive, and I dont miss it. Im actually a little surprised.

It will take a long time for American cities and citizens to adjust. Start thinking of how to get it done, 'cause the 1960's are not coming back. (That's the 1960's of American Graffiti)

One thing to think about. With all the boomers not saving for retirement, someone needs to start building some cheap housing near buslines. This will free up a lot of housing closer to urban centers, as retirees give up their houses and downsize. In an ideal world the free market would respond to this demand, but there is the conundrum that a builder can make a lot more money on a single luxury house than on many cheap bare-bones residences. Gotta think that one through without repeating the mistakes of Urban Renewal.

Posted by: troglodyte on April 23, 2006 at 3:24 AM | PERMALINK

Regular unleaded in central (not Munich) Bavaria is currently around 1.35 Euro/liter, which is roughly $6.30/gallon. Somehow the Germans survive and continue to hurl their little VWs and Opels down the Autobahn at 100+ mph. Average fuel consumption is somewhere around 1200 liters (317 gallons) a year over here, though.

Posted by: A Texan in Bavaria on April 23, 2006 at 3:32 AM | PERMALINK

I've given up the car for a while as I don't have to go far for work and libations. I've just chosen to not afford gas. I'm just pissed I don't have a 2005 100mph car in the garage. Seriously. Did we not see this coming? SUV owners can suck it.

Posted by: roo roo on April 23, 2006 at 5:40 AM | PERMALINK

'Joel' posted:

"VJ, you poor, pathetic moron."

Try a mirror, twit.

.

"Two things happen with SS taxes. Much of this money is transferred by the government to current benificiaries (like my parents and my in-laws). Some of it us used to purchase treasuries (the "trust" funds), which are currently used by the general fund to do the government's business."

False.

How STOOPID can you get ?

.

"By around 2018, the "trust" fund purchases will stop, and all funds will go to support current benificiaries; also, the treasuries will start to come due."

False.

Not good with math, eh ?

.

"All--yes *all*-- of social security taxes will be spent by the federal government."

False.

Sorry, wrong again.
.

Posted by: VJ on April 23, 2006 at 5:47 AM | PERMALINK

'notthere' posted:

"Are you sure your figure is right?"

Absolutely. You mean you cannot read ?

.

"Ahh. $1,859,440,665 of securities in the company that owes $8,379,429,663,827 and runs a $400,000,000,000 deficit every year, plus an OFF BUDGET war now running $350,000,000,000 and rising."

Nope.

The Social Security Trust Funds have no relation to the federal debt or deficits. You don't seem to have much grasp of the law or finance, do you ?

.

"Our future is secured because that money has been invested in what precisely?"

Precisely, Treasury Securities. THE safest investment on the planet.
.

Posted by: VJ on April 23, 2006 at 5:49 AM | PERMALINK

FAKE VJ posted:

'TT' posted:

"VJ's playing doing the 'Dead Parrot' sketch troll. A classic."

No, I'm not.
~

How juvenile can you get ?
.

Posted by: VJ on April 23, 2006 at 5:53 AM | PERMALINK

Wait a sec! Maybe I skipped over the troll posts. Its looking pretty snipey on closer reading.

- sigh -

Posted by: troglodyte on April 23, 2006 at 6:54 AM | PERMALINK

VJ writes: "How juvenile can you get?"

Well, you're setting the bar pretty low..

VJ, you have demonstrated that you know nothing about social security in particular and taxes in general. You have nothing to add to this thread. Please go away now.

Posted by: Joel on April 23, 2006 at 7:04 AM | PERMALINK

Gas taxes are regressive and so they are a bad thing. Gas taxes reduce consumption of a scarce resource and also thereby reduce pollution and wear and tear on our roads so they are a good thing.

What to do? Easy, at least in theory. Eliminate gas taxes and replace them with gas rations. That reduces or limits consumption and is not a regressive tax. In practice, it might get very messy to attempt and very messy in its implementation.

Posted by: i dunno on April 23, 2006 at 7:38 AM | PERMALINK

VJ,simply saying no is not a response to the question of the government's spending of the excess social security taxes collected. The money is used to finance the deficit (on and off budget) spending. The gov't has to find the cash to finance the deficit and that cash is raised either by selling debt to the public ($4.5 trillion,approx.) or to other parts of the gov't (SS trust fund,gov't employee trust fund,military retiree fund etc.).This is displayed monthly in Schedule D of the monthly Treasury Statement.
The SS trustee report for 2005 is still missing but the one last year showed the fund being tapped into in 2017 but that was at a GDP growth rate below that recorded last year. At the upper band of GDP performance (actually the historical performance) the trust fund is able to pay current benefits through 2059 or the 75 year fix done in 1983.

Posted by: TJM on April 23, 2006 at 8:39 AM | PERMALINK

Matt, Matt ..

Who said free public transportation?

Public transit is more efficient than automobile dependency. It's not free.

And as long as you're subsidizing roads -- Fed spending on roads has been 8 times as much as all other modes -- why not invest in transit so people have choices?

Otherwise, way to refuse to respond to the actual points of my posts. It's a pattern...

Of course people will pay for convenience. But that doesn't mean the market's functioning properly. There are different forms of convenience. And they're not priced accurately, nor do they offer real choices for most people.

Posted by: SombreroFallout on April 23, 2006 at 9:21 AM | PERMALINK

Don't forget heating oil or gas. There goes another portion of the disposable income, and there is very little anyone can do about that. You can only drop your thermostat so far.

Posted by: spacecaptain on April 23, 2006 at 9:54 AM | PERMALINK

So there you have it. There's a substantial segment of the population that spends a very big chunk of their income on gasoline, and in the past 12 months they've seen gasoline prices increase by 50% and that's at a time when household income has been decreasing for five years running and household debt is already sky high. They're probably pretty pissed that that whole Iraq business didn't work out quite the way it was supposed to.

Shorter Kevin Drum: It's the economy, stupid!

Posted by: E. Nonee Moose on April 23, 2006 at 9:55 AM | PERMALINK

I live in Tokyo. My company, as do almost all, pays for my commuter pass. It's not cheap, but you could say my monthly transport costs are nil. There are over a dozen private train companies in this area. All turn profits, but the economic system is different than in the states. Train companies own a lot of land around the stations, the supermarkets, etc...

Also, my national tax is low compared to the states. I don't have to pay for the Iraqi mistake.

I live 10 minutes on foot from the nearest train station. There are plenty of shops and supermarkets near by to go to. A major bus route is only 3 minutes from my home. Renting a parking place costs about $150 a month, plus gas is about $4.20 a gallon. My brother in law offered to give me a car for free. I'd rather just not deal with any of the problems of owning one.

I'd love to live this life in the states, but even in my home town of San Francisco, a car still seems necessary.

Posted by: hmmm on April 23, 2006 at 10:35 AM | PERMALINK

Still doing the "Dead Parrot" troll, troll?

Jesus man. Get a life.

Posted by: TT on April 23, 2006 at 10:45 AM | PERMALINK

Intragovernmental debt as of 4/20/06:
$3,520,882,319,879.15

Posted by: TT on April 23, 2006 at 10:48 AM | PERMALINK

All of this talk about the pump sticker shock and it's effects on personal transportation.
In the 70s, the increase permeated the economy. Petroleum used in construction materials led to higher housing costs, increased cost in transporting goods and services, airline costs, etc.
The average person is already seeing the increase in food at their local supermarkets. When Campbell Soup or Kellogg Foods raises their prices, due to increased shipping costs, they never rescind those increases.

It is the economy, Stupid.

Posted by: thethirdPaul on April 23, 2006 at 11:18 AM | PERMALINK

If you go to BEA.gov they have the data on personal consumption expenditures on energy -- including gas, fuel oil, electricity, etc..

In the 1970s it rose from 6.2% to 9.3% of total nominal spending.

So far this cycle is has risen from a low of 4.2% in 2002 to 6.3% in the 4th Q of 2005.

Posted by: spencer on April 23, 2006 at 11:22 AM | PERMALINK

Kevin, your stupidity is showing. The price of oil and gaseline affects nearly everythhing you buy: from your food, to your clothes, to the electricity for your too-dim lightbulbs. Oil is used in plastic, fertilizer, product packaging and transportation, etc., etc., etc. - it is pervasive in the American economy. You think maybe producers will be passing on those costs to you - think the recent .4% consumer price increase for March.

The gasoline you buy is the least of it. Shesh. You should to get aq job in the bushliar-criminal regime or the RNC - you'd be perfect.

Posted by: pluege on April 23, 2006 at 12:12 PM | PERMALINK

'Joel' posted:

"you have demonstrated that you know nothing about social security in particular and taxes in general. You have nothing to add to this thread. Please go away now."

Can't back up your ridiculous assertions, eh ?

That's OK, it was obvious from the getgo you were clueless.
.

Posted by: VJ on April 23, 2006 at 12:49 PM | PERMALINK

'TJM' posted:

"VJ,simply saying no is not a response to the question of the government's spending of the excess social security taxes collected."

It's up to others who have made such ridiculous assertions to substantiate them.

.

"The money is used to finance the deficit (on and off budget) spending."

Sorry, but wrong.

Here is what is written on the face of a Social Security Trust Fund bond:

"This bond is INCONTESTABLE in the hands of the 'Federal Old Age and Survivors Insurance Trust Fund'. This bond is supported by the full faith and credit of the United States and the United States is pledged to the payment of the bond with respect to both principal and interest."

A Social Security Trust Fund bond is the most privileged of Treasury bonds, issued to Social Security by the U.S. Treasury, and unlike any other bond that they issue, it is redeemable at any time at full face value.
.

Posted by: VJ on April 23, 2006 at 12:51 PM | PERMALINK

It's interesting that most posters think what we have here is something "Americans want".

Republicans are under no such illusion, which is why they spend billions on "think tanks", PR, "news" networks and lobbying to sell their suburbanization product and keep us from building an alternative.

And the result, to date, has been the creation of a social pathology- a society in which every road is filled past capacity soon after it is built. An eery and unsettling resemblance to how cancer invades healthy tissue, always demanding more until the swelling tumor destroys the function of the body.

Thee's a great Charlie Chaplin movie where he roller-skates blindfolded on the mezzanine level of a department store that is under construction, and has no railing.

That's us, folks. Say Bush attacks Iran, and gas goes to $10 a gallon- what happens to your housing bubble then? If the bubble bursts, and a third of us go bankrupt, where is the employment for the people who were building houses?

Because, if you look around (your morning paper should do) you'll see that our "leaders" Big Plan is More of The Same. We don't have an alternate plan for the most obvious of reasons- we have no ability to form one.

So many of us have been programmed by the Republican propaganda that this single thread has included a long recital of "SS is going broke" and probably would have even included an Abstinence Pledge if there wasn't an abstinence thread just a little ways down the page.

But maybe Americans aren't that stupid. The brain-dead 50s were followed by some rapid changes that nobody thought could ever happen in 1959. Maybe the same thing will happen in the next great crisis, and then we'll have fun fun fun 'till Daddy takes the T-bird away.

You'll get better mileage if you do the next leg of the journey on a bicycle.

Posted by: serial catowner on April 23, 2006 at 1:09 PM | PERMALINK

The pure and simple truth: We are getting screwed by big oil!!!

The gas you pumped today was purchased 60 to 90 days ago at lower prices and the "petrotraitors" (oil companies) raise the price immediately! That's why we need transparency in their crooked and unpatriotic dealings!

What do we consumers need to do? THINK about what you buy! You don't need SUV (stupid useless vehicles) or pickup trucks! My Honda minivan gets 24-25 MPG highway driving (yeah really) and my wife's Saturn L300 gets 25-27.

I bought the Honda when I commuted 25 mi/day city but now commute 110 mi/day highway. I feel somewhat guilty driving the van but not when I see Ford Explosions, GM Landwhales, Nissan Aircraft Carriers, Tpyota Sequoiatrees that get 15MPG!

My saving grace is working at home (online) 2-3 days per week keeps mileage down. I do feel for people who must travel to work.

Streakr for south Florida

Posted by: streakr on April 23, 2006 at 1:20 PM | PERMALINK

Oil and gas for heating is going to be a huge issue, especially here in the Northeast. (I suspect that energy costs for air conditioning in the South and Southwest will be a big issue there, eventually.) Natural gas heating costs went up 50% to 70% this year; heating oil did not increase that much, but still was up by a good 25%. We were very, very lucky to have a mild winter; if this had happened last winter, I suspect we would have been reading about people freezing to death in their homes, or senior centers being turned into shelters for old people who just do not have another $100/month.

There are reports of people converting the home furnaces to use coal, which is cheap but dirty. Not sure how I feel about that, and there is only so much coal in the world (not to mention that the coal companies are pretty much destroying West Virginia and southwestern Pennsylvania to get at it...)

I'd love to see more solar and wind power for home use. No, the Northeast isn't great for solar, but this is something the sunnier parts of the country could produce and export onto the electric grid. Wind power is coming, environmentalists be damned (and I am an environmentalist, BTW... A lot of the so-called "environmentalist" resistance tro wind power is pure and selfish NIMBYism IMHO.) But the up-front costs have got to come down, because right now it's just too expensive to convert to solar or wind. *If* we'd paid attention to this 20 years ago and sunk more resources into alternative energy R&D, we might have affordable alternative energy techonology now.

Posted by: quietann on April 23, 2006 at 1:25 PM | PERMALINK

You're all clueless.

'XX' said:

"Blah blah blah."

No, you're wrong.

etc etc etc

Posted by: VJ on April 23, 2006 at 1:37 PM | PERMALINK

How did you arrive at these numbers? I figure that if I drive 9000 miles this year (vastly more than normal, by chance), I'll spend about $750 dollars for gas at $3 per gallon (at 40 miles per gallon). That would be just a few percent of disposable income at a salary of $44,000 per annum.

Even at 15 miles per gallon, that wouldn't approach 10%.

Posted by: smintheus on April 23, 2006 at 2:24 PM | PERMALINK

"How did you arrive at these numbers? I figure that if I drive 9000 miles this year (vastly more than normal, by chance)"

In 2001, the average household racked up 21,171 vehicle-miles - more than double the number you gave. That number trends up, so the figure for 2006 will be even higher.

"I'll spend about $750 dollars for gas at $3 per gallon (at 40 miles per gallon)."

The average household vehicle in the US gets 20.1 mpg - half the figure you just gave. Almost no one, statistically speaking, averages 40 mpg.

"That would be just a few percent of disposable income at a salary of $44,000 per annum."

Average household after-tax income is about $55,310. There are 2.5 people per household, on average, so per capita after-tax income is $22,124 - half of the figure you just gave.

"Even at 15 miles per gallon, that wouldn't approach 10%."

Given that your personal numbers aren't the norm, this is no surprise.

Posted by: TT on April 23, 2006 at 2:40 PM | PERMALINK

There is also the perverse phenomenon of lower middle class families moving further out into the exurbs to be able to buy housing that they feel they need. I was surprised to see how low the average cost for the DC area was, but I think that this reflects a tale of two realities. Well paid professional types with two incomes can live in the city and foot the bill for private shcoools. So I am able to survive with one car, live within a mile of my office, while my wife takes a 15 minute subway ride and my kid can walk to school. My secretary on the other hand, lives over 70 miles from the city, and commutes 700 miles a week! This is not unusual here. Many people in clerical jobs commute 25-50 miles each way, because housing has become so expensive here (plus whatever sociological factors go into theese decisions, i.e. race, crime, schools, etc.) that a two bedroom apartment with 1100 square feet will probably set you back $400-500,000.

Throw the SUVs into the mix and you have a public policy nightmare. But people are wedded to their cars in large part because they live in places that you need them for every task. It's a highly problematic pattern and is socially and environmentally destructive. But people seem committed to it and the likes of David Brooks think its just great.

Posted by: Friedman's moustache on April 23, 2006 at 3:30 PM | PERMALINK

VJ must be the golfer. The SS bonds represent what? An obligation of the federal gov't (on which interest is credited) but the cash collected through FICA is used by the gov't for whatever they need to spend it on. The Treasury borrows from SS (the bond) and spends the cash. I don't care what the bond says on its face,it represents an obligation of the Treasury to its owner. It is debt,it is money owed,it is borrowing,it has ceased to be cash.

Posted by: TJM on April 23, 2006 at 6:04 PM | PERMALINK

One new tool:

Location Efficient Mortgages

Factors in the cost of transportation.

Posted by: SombreroFallout on April 23, 2006 at 7:22 PM | PERMALINK

" but the cash collected through FICA"

You mean social security TAXES???

VJ insists, in the face of overwhelming evidence to the contrary, that these are not "taxes." What a moron.

Posted by: Joel on April 23, 2006 at 9:30 PM | PERMALINK

If someone is driving 21,000 miles a year at 20 mpg, they will use about 1059 gallons of gas per annum. At $3.00 a gallon, that's $3,176. At $1.50 a gallon, that's $1588. So that someone has to find an additional $1,588 to fuel his car.

If this someone is at the median 2004 income of $44,389, he or she will now be paying 7% of their pre-tax income on $3.00 gas, up from 3.5%

On the other hand, if this someone is among the working poor--say, earning a grad student stipend of $20,000 per annum, gas at $3.00 is 16% of their income. This may be why grad students choose to live within walking or biking distance of campus.

This public service announcement is brought to you by Excel and Google, who bring math reasoning to life.

Posted by: PTate in MN on April 23, 2006 at 10:40 PM | PERMALINK

I think this notion that Americans want to drive as far as they do to work, want to live as far from work as they do, etc. is rather like the old notion that people are in debt because they piddle it away on buying unnecessary luxuries or stupidly living beyond their means.

Americans drive so far because they can't afford housing that's close to work. Housing costs in most urban centers are out of control.

Americans are in debt because housing, transportation, and medical costs keep going up while wages stagnate.

While it is smart to get a higher MPG vehicle, like fresh fruit and vegetables, getting truly good mileage costs you, and workers already struggling to pay for the above are not able to afford the higher front-end costs that many high mpg cars cost (especially hybrids).

Americans are gettings socked between the eyes on high gas prices the same way they are getting hit in the gut by medical costs, only at the pump it's an everyday occurence and not as spread out over time. Also, people can forego medical insurance and still work. The same cannot be said about gas.

This is yet another squeeze on working people in America. We are getting hit hard by this.

Pundits may not get it, but politicians better or they will reap the whirlwind in November.

Posted by: Kate on April 24, 2006 at 3:30 AM | PERMALINK

Bush Blamed Clinton for Gasoline Prices when they were at $1.50 per gallon.

Bush said the Clinton administration should be blamed for prices averaging well over $1.50 per gallon because it squandered the goodwill built with oil producers by his father, former President Bush, in the Persian Gulf War and because it lacks an overall energy policy.

This chart helps illustrate the changes in gas prices during the Clinton Administration and the Bush Adminstration. The price of gasoline has gone up roughly 66% in the last 2 years - more than 4 times higher than the total percentage increase between 93 when Clinton took office and 2001 when Clinton left.

I dont usually rush to blame the President for gasoline prices, but the if you judge Bush by the standards he applied to Clinton, Bush fails miserably.


Posted by: Catch22 on April 24, 2006 at 11:14 AM | PERMALINK

'TJM' posted:

"The SS bonds represent what? An obligation of the federal gov't (on which interest is credited) but the cash collected through FICA is used by the gov't for whatever they need to spend it on."

False.

Try reading the underlying federal statute.

.

"The Treasury borrows from SS (the bond) and spends the cash."

TRUE !

You finally got one correct !

However, that is also true of all the other Treasury Securities the U.S. Treasury issues. So, no credit for being obvious.

.

"I don't care what the bond says on its face,it represents an obligation of the Treasury to its owner. It is debt,it is money owed,it is borrowing,it has ceased to be cash."

Who claimed it was "cash" ?

Do try and keep up.
.

Posted by: VJ on April 24, 2006 at 11:41 AM | PERMALINK

'Joel' posted:

"VJ insists, in the face of overwhelming evidence to the contrary, that these are not 'taxes'."

By definition, FICA stands for 'Federal Insurance Contributions Act', not Federal Insurance Tax Act. The legislation was not tax legislation.

Get a clue.

.

"What a moron."

You most certainly are.
.

Posted by: VJ on April 24, 2006 at 11:43 AM | PERMALINK

There can be no doubt that rising gas prices are a major aggravation to anyone who drives regularly and a significant issue for lower income earners who drive substantially more than average.

On the other hand, simply plugging in Kevin's numbers and looking at the results helps put things in perspective. Using the example he chose, the individual is spending roughly $21 per week more than they did when gas was at $2 per gallon.

Should prices go to $4 per gallon, the individual will need to spend an additional $21 per week to cover the higher costs (assuming they cannot reduce their consumption).

To be sure, there are individuals for whom this additional cost may be extremely difficult to handle. But I think it is safe to say that for the vast majority of people, such increases are more of an irritation than a bank-breaking impossibility. In other words, people are justified in being unhappy about the price increases and can vent that anger at Bush, but at the end of the day we're talking about people complaining about spending (in this example) 20 more bucks a week on gas than they did a year ago.

Annoying yes, but financially ruinous?

Posted by: Hacksaw on April 24, 2006 at 11:44 AM | PERMALINK

'Catch22' posted:

"Bush said the Clinton administration should be blamed for prices averaging well over $1.50 per gallon because it squandered the goodwill built with oil producers by his father"

He also claimed during the 2000 campaign that he would be able to "jawbone" the price of oil down because of his relationship with the oil producers and oil companies.

Just another lie in a long string of Bushie lies.
.

Posted by: VJ on April 24, 2006 at 11:49 AM | PERMALINK

Teehee! I love the Dead Parrot bit!

Teehee!

MUST. HAVE. LAST. WORD.

Posted by: VJ on April 24, 2006 at 11:55 AM | PERMALINK

What an idiot.

How insecure must you be that you have to falsely post under other poster's monikers ?
.

Posted by: VJ on April 24, 2006 at 12:04 PM | PERMALINK

MUST. HAVE. LAST. WORD.

DOC. SAID. TO. BREATHE. CAN'T. MUST. SCRUB. HANDS. FLICK. LIGHT. SWITCH. 15. TIMES. CAN'T. STOP.

MUST. HAVE. TROLLING. MONOPOLY.

Posted by: VJ on April 24, 2006 at 12:21 PM | PERMALINK

I am a douchebag, a 3rd rate troll.

I'm so lazy I keep flogging the "dead parrot", the "I know you are" game, and the tried-and-true semantic digression.

Someone please kill me now.

Posted by: VJ on April 24, 2006 at 12:26 PM | PERMALINK

Jerkoff moron asswit.

I am better than you all.

Goodbye!

Posted by: VJ on April 24, 2006 at 12:27 PM | PERMALINK

OK, here's the deal -- in Southern California gas in big cities is around 3.40 a gallon -- I saw it as high as 3.79 -- for regular unleaded -- in the San Diego back country. So 4 bucks a gallon is already here if your car wants high-test gas. A pretty standard commute for a working-class person (and this would include a lot of military personnel) who can't live in San Diego, where affordability is 9.5% and dropping, is to live in Escondido, Fallbrook, or even Temecula with one-way commutes of 50-80 miles. This is really hitting folks very hard.

Posted by: jhill on April 24, 2006 at 7:16 PM | PERMALINK

I want to apologize for falsely posting under other people's names, and making an ass out of myself in general.

I am an idiot.

Posted by: TT on April 25, 2006 at 7:05 AM | PERMALINK

'TT' posted:

"I want to apologize for falsely posting under other people's names, and making an ass out of myself in general.

I am an idiot."

Fuck you, moron. Apology not accepted.

Bow before me and accept my definitions for everything.

A "flower" is a pile of cow dung.

A "road" is a chain of lollipops in the sky.

Teehee!

Posted by: VJ on April 25, 2006 at 9:30 AM | PERMALINK

MUST. HAVE. LAST. WORD.

DOC. SAID. TO. BREATHE. CAN'T. MUST. SCRUB. HANDS. FLICK. LIGHT. SWITCH. 15. TIMES. CAN'T. STOP.

MUST. HAVE. TROLLING. MONOPOLY.

SCRATCH. SCRATCH. SCRATCH. SCRATCH.

Posted by: VJ on April 25, 2006 at 9:39 AM | PERMALINK




 

 

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