I’ve argued for higher gas prices a lot in this space, mostly because of needing to get the price right in terms of us consumer adjusting our behavior so that we consume a more socially optimal amount of gas. Every so often, I also add the point that infrastructure investments are needed to maintain American competitiveness, although I’m mindful that we ought not forsake enhanced transit infrastructure for the sake of repairing crumbling roads and bridges. Congress has jobs on its mind, though, so its main interest in hiking rather than halting gas taxes is to keep highway workers employed: see here and here.

I’m certainly not as job-obsessed as Congress, but I agree that taking away almost $9 billion and therefore jeopardizing over 300,000 construction jobs in order to subsidize all of us drivers and allow us to drive even more is a bad idea. Senator McCain knows all the economists hate the idea and yet is pressing forward anyway. How about we go another route: admit an oil addiction that is 30 years and four presidential administrations in the making, phase up per-gallon taxes to encourage conservation of scarce resources, adjust income taxes accordingly to eliminate the pain for those who can least bear it, and move our way to a more sustainable way of life?

PS An editorial in today's Inky states that "the high cost of fuel is hurting virtually every sector of the economy, from agriculture to transportation." The problem with our addiction to cheap oil is that we fail to realize that if we reduce our pain at the pump (whether experienced directly, or embedded into things like the food we buy at the grocery store), it is at the expense of causing pain elsewhere, in the form of unsustainable personal lifestyles and metropolitan spatial layouts and resource consumption patterns. Economists understand the reality of trade-offs; addicts just want something to ease the pain.
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