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U.S. gas: So cheap it hurts Relatively low taxes have kept pump prices far below most other developed nations, which some say is precisely why the current runup is so painful.

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May 02, 2008 – Comments (4)

FYI - Americans are transfering $600 Billion in wealth this year over to oil producing nations. We are supporting evil and anti-west regimes to support a gas guzzling SUV lifestyle. It does not make much sense to me.

Tonight I saw a brand new Ford F150 with extend cab tonight. It was a monster truck. It was to nice/new to be work truck, my WAG. He had a bumper sticker, My son is a Marine. The irony that he would drive this gas guzzling beast of a vehicle when we are heavily engaged in the M.E. for oil.  

CNN Money has a good article here: U.S. gas: So cheap it hurts

Relatively low taxes have kept pump prices far below most other developed nations, which some say is precisely why the current runup is so painful. 

NEW YORK (CNNMoney.com) -- 

NEW YORK (CNNMoney.com) -- Despite daily headlines bemoaning record gas prices, the U.S. is actually one of the cheaper places to fill up in the world.

Out of 155 countries surveyed, U.S. gas prices were the 45th cheapest, according to a recent study from AIRINC, a research firm that tracks cost of living data.

The difference is staggering. As of late March, U.S. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon across much of Europe.

The U.S. has always fought to keep gas prices low, and the current debate among presidential candidates on how to keep them that way has been fierce.

But those cheap gas prices - which Americans have gotten used to - mean they feel price spikes like the ones we're experiencing now more acutely than citizens from other nations which have had historically more expensive fuel.

Cheap gas prices have also lulled Americans into a cycle of buying bigger cars and bigger houses further away from their work - leaving them more exposed to rising prices, some experts say.

Price comparisons are not all created equal. Comparing gas prices across nations is always difficult. For starters, the AIRINC numbers don't take into account different salaries in different countries, or the different exchange rates. The dollar has lost considerable ground to the euro recently. Because oil is priced in dollars, rising oil prices aren't as hard on people paying with currencies which are stronger than the dollar, as they can essentially buy more oil with their money as the dollar falls in value.

And then there's the varying distances people drive, the public transportation options available, and the different services people get in exchange for high gas prices. For example, Europe's stronger social safety net, including cheaper health care and higher education, is paid for partly through gas taxes.

Gas price: It's all about government policy. Gasoline costs roughly the same to make no matter where in the world it's produced, according to John Felmy, chief economist for the American Petroleum Institute. The difference in retail costs, he said, is that some governments subsidize gas while others tax it heavily.

In many oil producing nations gas is absurdly cheap. In Venezuela it's 12 cents a gallon. In Saudi Arabia it's 45.

The governments there forego the money from selling that oil on the open market - instead using the money to make their people happy and encourage their nations' development.

Subsidies, many analysts say, are encouraging rampant demand in these countries, pushing up the price of oil worldwide.

In the U.S., the federal tax on gas is about 18 cents a gallon, pretty low by international standards.

But those relatively low gas taxes make it hard now for Americans to deal with gas prices that have risen from around $1 to over $3 a gallon in the last seven years.

"Everybody pays more, but the U.S. pays more in absolute terms," said Lee Shipper, a visiting scholar at the University of California Berkeley's Transportation Center. If you're already paying $4 in taxes, said Schipper, then an extra $2 a gallon isn't that big of a deal.

Talkback: Tell us what you think

Revenues from Europe's high gas taxes are used to fund a variety of things. One thing they have built is better public transportation, said Peter Tertzakian, chief energy economist at ARC Financial, a Calgary-based private equity firm.

They gave people an alternative to driving, something we don't have in North America," said Tertzakian.

Low fuel taxes and prices sprung out of a national love for mobility going back generations, said Robert Lang, director of the urban planning think tank Metropolitan Institute at Virginia Tech.

In fact, the U.S. could not have had the western expansion it did without the cheap mobility railroads and horse carriages afforded long before it became an auto-obsessed culture, said Lang.

"You couldn't have Manifest Destiny unless you could move," he said.

The automobile, and its promise of personal mobility, only deepened the nation's love affair with travel.

"Nobody sang 'She'll have fun fun fun until her daddy takes the tokens away,'" said Lang. 'It's totally romanticized."

Gas consumption Europe vs. U.S. There is some evidence Europe's high gas taxes have capped its oil consumption.

Oil use in the United Kingdom has basically stayed flat from 1980 to now, while in France it's dropped 17%, according to figures from the Energy Information Administration.

In the U.S., meanwhile, oil use is up 21% over the same period, although the country has added more people and seen its economy grow slightly faster.

Americans have taken advantage of cheap gas prices to do other things - like buy bigger cars and bigger houses further away from city centers, said Schipper.

On a per capita basis, Americans use three times more oil than Europeans, he said. That means Americans are more exposed to rising gas prices than their counterparts across the Atlantic.

"Five-thousand square feet in the suburbs, that's much rarer in Europe," said Schipper, referring to big homes. "We dug our hole."

-- Correction: Due to data errors, previous versions of the charts in this story were incorrect. The charts have been updated. 

First Published: May 1, 2008: 4:16 AM EDTTax cut could push gas prices higher

In defense of oil companies

Share your stories Decent comments here:http://digg.com/business_finance/Why_gas_in_the_U_S_is_so_cheap_12_03_a_Galllon_in_Aruba 

4 Comments – Post Your Own

#1) On May 03, 2008 at 2:10 AM, zygnoda (27.36) wrote:

great post

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#2) On May 03, 2008 at 10:14 AM, bellard (99.30) wrote:

Thanks for the post. Its good to see other can still think in this country. read my blog post on taxing pollution. Taxing gas at the pump, and electricity from coal plants - and then reduce 120% income taxes starting at the bottom - would be a HUGE benefit to the US economy. Gas at 7-8 a gallon - but no, or little income tax - think how this would change behavior, innovation, etc...

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#3) On May 03, 2008 at 3:02 PM, abitare (88.82) wrote:

FYI - John McCain admits Iraq War was over oil

“My friends, I will have an energy policy which will eliminate our dependence on oil from Middle East that will then prevent us from having ever to send our young men and women into conflict again in the Middle East.”

http://www.crooksandliars.com/2008/05/02/john-mccain-admits-iraq-war-was-over-oil/ 

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#4) On May 03, 2008 at 11:50 PM, lquadland10 (< 20) wrote:

Because the government wants us to and so does congress.They want to manipulate us into forming a one world organization. This all is the shift into the next step in their business plan.Just one of many ways to get their way to make more money off of the worlds people and to consladate the Nations.      See a few who are involved.         THE NEW WORLD DISORDER
7-year plan aligns U.S.
Rules, regs to be integrated
Posted: January 16, 2008
1:00 am Eastern

By Jerome R. Corsi
© 2008 WorldNetDaily.com

 


German Chancellor Angela Merkel, President Bush and European Commission President Jose Manuel Barroso at a White House summit meeting last April where they launched the Transatlantic Economic Council

Six U.S. senators and 49 House members are advisers for a group working toward a Transatlantic Common Market between the U.S. and the European Union by 2015.

The Transatlantic Policy Network – a non-governmental organization headquartered in Washington and Brussels – is advised by the bi-partisan congressional TPN policy group, chaired by Se.......

The plan – currently being implemented by the Bush administration with the formation of the Transatlantic Economic Council in April 2007 – appears to be following a plan written in 1939 by a world-government advocate who sought to create a Transatlantic Union as an international governing body.

An economist from the World Bank has argued in print that the formation of the Transatlantic Common Market is designed to follow the blueprint of Jean Monnet, a key intellectual architect of the European Union, recognizing that economic integration must inevitably lead to political integration.

 

As WND previously reported, a key step in advancing this goal was the creation of the Transatlantic Economic Council by the U.S. and the EU through an agreement signed by President Bush, German Chancellor Angela Merkel – the current president of the European Council – and European Commission President Jose Manuel Barroso at a White House summit meeting last April.

Writing in the Fall 2007 issue of the Streit Council journal "Freedom and Union," Rep. Jim Costa, D-Calif., a member of the TPN advisory group, affirmed the target date of 2015 for the creation of a Tr.......

Costa said the Transatlantic Economic Council is tasked with creating the Transatlantic Common Market regulatory infrastructure. The infrastructure would not require congressional approval, like a new free-trade agreement would.

Writing in the same issue of the Streit Council publication, Bennett also confirmed that what has become known as the "Merkel initiative" would allow the Transatlantic Economic Council to integrate and harmonize administrative rules and regulations between the U.S. and the EU "in a very quiet way," without introducing a new free trade agreement to Congress.


Sen. Robert Bennett, R-Utah

No document on the TEC website suggests that any of the regulatory changes resulting from the process of integrating with the EU will be posted in the Federal Register or submitted to Congress as new free-trade agreements or as modifications to existing trade agreements.

In addition to Bennett, the advisers to the Transatlantic Policy Network includes the following senators: Thad Cochran, R-Miss.; Chuck Hagel, R-Neb.; Barbara Mikulski, D-Md.; Pat Roberts, R-Kan.; and Gordon Smith, R-Ore.

Among the 49 U.S. congressmen on the TPN's Congressional Group are John Boehner, R-Ohio; John Dingell, D-Mich.; Kenny Marchant, R-Texas; and F. James Sensenbrenner, R-Wisc.

WND contacted Bennett's office for comment but received no return call by the publication deadline.

A progress report on the TEC website indicates the following U.S. government agencies are already at work integrating and harmonizing administrative rules and regulations with their EU counterparts: The Office of Management and Budget, the Food and Drug Administration, the Environmental Protection Agency, the Occupational Safety and Health Administration and the Securities and Exchange Commission.

A step toward world government

The Streit Council is named after Clarence K. Streit, whose 1939 book "Union Now" called for the creation of a Transatlantic Union as a step toward world government. The new federation, with an international constitution, was to include the 15 democracies of U.S., UK, France, Australia, Belgium, Canada, Denmark, Finland, the Netherlands, Ireland, New Zealand, Norway, Sweden, Switzerland and South Africa.

Ira Straus, the founder and U.S. coordinator of the Committee on Eastern Europe and Russia in NATO, a group dedicated to including Russia within NATO, credits Bennett as TPN chairperson with reviving Streit's......

A globalist with leftist political leanings, Straus was a Fulbright professor of political science at ......

The congruity of ideas between Bennett and Streit is clear when Bennett writes passages that echo precisely goals Streit stated in 1939.

One example is Bennett's claim in his Streit Council article that creating a Transatlantic Common Market would combine markets that comprise 60 percent of world Gross Domestic Product under a common regulatory standard that would become "the de facto world standard, regardless of what any other parties say."

Similarly, Streit wrote in "Union Now" that the economic power of the 15 democracies he sought to combine in a Transatlantic Union would be overwhelming in their economic power and a clear challenge to the authoritarian states then represented by Nazi Germany and the communist Soviet Union.

Also writing in the Fall 2007 issue of the Streit Council jour...... World Bank economist Domenec Ruiz Devesa openly acknowledged that "transatlantic economic integration, though important in itself, is not the end."

"As understood by Jean Monnet," he continued, "economic integration must and will lead to political integration, since an integrated market requires common institutions producing common rules to govern it."

Transatlantic Common Market by 2015

Last February, the Transatlantic Policy Network formed a Transatlantic Market Implementation Group to put in place "a roadmap and framework" to direct the activity of the Transatlantic Economic Council to achieve the creation of the Transatlantic Common Market by 2015.

The Transatlantic Economic Council is an official international governmental body established by executive fiat in the U.S. and the EU without congressional approval or oversight. No new law or treaty was sought by the Bush administration to approve or implement the plan to create a Transatlantic Common Market.

The U.S. congressmen and senators are involved only indirectly, as advisers to the influential non-governmental organization.

In a February 2007 document entitled "Completing the Transatlantic Market," the TPN's Transatlantic Market Implementation Group writes, "The aim of this roadmap and framework would be to remove barriers to trade and investment across the Atlantic and to reduce regulatory compliance costs."

The document further acknowledged the impact the Transatlantic Common Market agenda would have on U.S. and European legislators: "The roadmap and framework will necessarily oblige legislative and regulatory authorities in both Europe and the United States to take into consideration from the outset the impact their acts may have on transatlantic economic relations and to ensure that their respective governmental bodies involved have the necessary budgetary and organizational resources to work closely with each other."

Clinton administration roots

The work to create a Transatlantic Common Market can be traced back to the Clinton administration's decision to join in the 1995 New Transatlantic Agenda with the European Commission.

Today, the website of the Transatlantic Economic Council openly proc...... the TEC is "a political body to oversee and accelerate government-to-government integration between the European Union and the United States of America."

The first meeting of the TEC was held Nov. 9 in Washington, D.C., and the next meeting is scheduled for June.

A joint statement issued at the Nov. 9 meeting specified progress was being made "in removing barriers to trade and investment and in easing regulatory burdens" in a wide range of policy areas, including drugs and disease control, the importation into the EU of U.S. poultry treated with pathogen reduction treatments, federal communication commissions allowing suppliers to create declarations of conformity for products, uniform standards for electrical products and agreements on standards for pure biofuels. (Like I said before and I know you are tired of hearing me but Welcome to the United States of England formly Amercia.)  How many of these news sources are with the CFR or TPN. 

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