Welcome to Rye Country Day's Economic Blog. Here you will find perspectives by students taking Economics at Rye Country Day School. It is meant to be a forum where students can openly express their ideas and take positions on relevant economic issues. I urge everyone to participate in presenting their own ideas in an open manner so that we can all learn from each other. Regardless of whether you are currently taking Economics, everyone is invited and encouraged to comment on articles and get involved. Feel free to e-mail me, Alex Osborne at alexander_osborne@rcds.rye.ny.us , with comments or suggestions.

Monday, December 11, 2006

Featured Entry - The Benefits of Raising Gas Prices

CBS market watch today reported an unhappy future for gasoline prices worldwide. As hinted at in the article appearing on the last test, natural gas production is going to be cut by OPEC countries (based on the belief that it is a highly elastic market). This will raise gas prices again, though probably not to the same levels we saw this summer. However (and I can say this now that I have to pay for gas) I don't think higher gas prices are such a bad idea. In fact, the American government should follow Europe's lead (perhaps looking to Great Britain as a prime example) and raise prices drastically through taxes. Not only would that promote changing in driving patterns, it would also raise much needed money for the government that could go to social programs, education, and, perhaps, researching alternative energy sources.

-Philip Waller

1 comment:

Sam said...

A wise man once said, “The road to hell is paved with good intentions, with sloppy analysis along the way.” Whatever goal you are trying to achieve, you are not able to compromise your moral code. The end does not justify the means. Even though an increase in gas prices would force Americans to become more efficient in their use of gas, as well as increase government capital, it goes against economic equilibrium to simply boost prices at the wim of the government. Besides being unfair and unreasonable, taxing gasoline would lead to lack of consumer spending and economic spending. I believe that the price of a good should reflect two things, supply and demand. Prices should not rise and fall as a result of government regulations or corrupt oligopolies like OPEC. It is illegal for OPEC to drive up prices of gas by making a deal with a group of the elite oil producers. In addition it is unconstitutional for the government to impose legislation through taxation. Unless a good is needed for basic survival needs of citizens, I believe that there should be no regulations imposed on the goods price. Regardless of the benefits we must not loose our principle. Besides a taxation on gasoline would lead to a second American revolution.