Gas Out @ MindSay

So, what I've read about the Gas Tax Holiday proposal by McCain and Clinton pretty much says that very little savings would be passed on to the consumer. And, in fact, may actually benefit the gas companies! What the Heck? Apparently, Clinton and McCain are not listening to the elitist economists, with their math and learning, who almost unanimously agree that both plans are pointless and costly.

Here are some quotes:

"The advocates of a "gas tax holiday" are exaggerating the benefits to consumers from their proposal. If the Illinois experience is a guide, there is likely to be some reduction in the price of gas, but it would fall well short of the size of the tax reduction. In order to pay for the tax cut, the government would have to cut back on highway construction and maintenance or find some other way of plugging the shortfall in revenues to the Highway Trust Fund."

"There's another catch to the McCain and Clinton proposals. Currently, the gas tax is deposited directly into the Highway Trust Fund, which is used to pay for upgrades to roads and bridges. The American Society of Civil Engineers estimates that the three-month gas tax holiday could cost as much as $8.5 billion.

McCain has responded by pledging to fund the Highway Trust Fund out of general revenues. That, of course, means adding another $8.5 billion in federal debt, which in turn means adding as much as $383 million per year in interest payments."

"Clinton campaign spokesperson Geoff Garin said in a conference call this week that the proposal would save each driver $70. The Clinton campaign did not respond to our request to clarify how it arrived at that figure. But the non-partisan American Association of State Highway and Transportation Officials estimates that the total savings for the average American motorist works out to about $28; for a two-car household, that would be $54.

That's IF prices actually dropped 18.4 cents per gallon. However, there's every indication that they wouldn't. Here's why: According to the basic principles of supply and demand, cutting the price of an item causes people to buy more of it."

"For all the legislative prowess of McCain and Clinton, we’re doubtful that either candidate can rewrite the laws of supply and demand. That 18.4 cents per gallon won't go to consumers. Instead, the proposal will simply shift that money from government coffers to the oil companies. We're willing to grant that if the laws of economics themselves took a holiday and the price did drop that much, the amount saved might be meaningful to many motorists, particularly those who are low-income and those who drive a lot. And there would likely be all kinds of ancillary benefits involving price reductions for food and other products that have to be transported, as well as airline tickets and the like.

But we can't find any economists who think we'll actually see that drop in the price of gasoline. Others have tried and failed as well. And the Clinton campaign hasn't produced one, either."

"Another economist, Jeffrey Perloff, of UC-Berkeley, agreed that a federal tax moratorium would likely have less impact on consumer gas prices than a state moratorium. He said his models showed that a suspension of the 18.4-cent federal tax on gasoline would likely result in a temporary 9- to 12-cent reduction in the cost of a gallon of gas to the consumer, with the remainder of the reduction coming in wholesale prices."

"The Obama campaign says that's a key reason why he opposes McCain's plan: there is no mechanism to make sure that consumers, rather than oil companies, reap the benefits of the tax holiday.

So on this point — how Obama voted in 2000 — the RNC glosses over an important detail. Yes, he voted for the tax holiday the first time, but he opposed an extension of it because he said consumers weren't getting the benefit."

Don't participate in this "Gas out" nonsense. You will only be hurting people that have very little say in what the price of gas is. Even if you don't buy gas for a week, the only person you are going to hurt is the owner of the gas stations. I'm not entirely worried about people not buying gas, but if people weren't apathetic and things like this actually worked, only people who don't deserve to suffer would, in fact, suffer.  So...

From snopes.com

• "The premise behind all these messages is inherently flawed, because consumers' not buying gasoline on one particular day doesn't affect oil companies at all. The "gas out" scheme doesn't call upon people to use less gasoline, but simply to shift their date of purchase and buy gas a day earlier or later than they usually would. The very same amount of gasoline is sold either way, so oil companies don't lose any money."

By definition, a boycott involves the doing without of something, with the renunciation of the boycotted product held up as tangible proof to those who supply the commodity that consumers are prepared to do without it unless changes are made.

•  What the "gas out" calls for isn't consumers' swearing off using or buying gasoline, even for a short time, but simply shifting their purchases by a couple of days at most. Because the "gas out" doesn't call on consumers to make a sacrifice by actually giving up something, the threat it poses is a hollow one.

An effective protest would involve something like organizing people to forswear the use of their cars on specified days, an act that could effectively demonstrate the reality of the threat that if gasoline prices stayed high, American consumers were prepared to move to carpooling and public transportation for the long term.

• Simply changing the day one buys gas, however, imparts no such threat, because nothing is being done without.

Moreover, the primary potential effect of the type of boycott proposed in the "gas out" messages is to hurt those at the very end of the oil-to-gasoline chain: the independent service station operators, who have the least say in setting gasoline prices. (Independents are at the mercy of a very volatile oil market and operate on thin profit margins, and even a single day's disruption of supply or demand can wipe out many days' worth of hard-earned profits.)

As such, the "gas out" is a punch on the nose delivered to the wrong person.

So, stop calling for a gas out.