The Free Market, price of gas, class warfare or socialism?

[Schneed10]

Originally Posted by GTripp0012

The idea with a fixed price floor is that it steals a luxury from those who have other forms of transportation than by personal vehicle. The grand idea is to make sure there is enough gasoline to fuel cars for those who have no other options but to drive to their jobs.

This isn't about a free market vs. a socialist market, because the free market is better in 99% of cases. This is about mandating a change in usage habits, and doing it by forcing consumers to realign their values.

The free market would be totally capable of taking care of this issue on it's own, and that would be: the middle class can no longer afford to drive on a daily basis, people near the poverty line probably can't own or lease cars, and the combination of the two leads to less spending in the market, and rampant unemployment.

Then of course, we would innovate and figure things out as we always do, but I would prefer to pay double for gas now and be forced to alter my lifestyle a bit as opposed to being unable to participate in business affairs for some time.

This is quite possibly the worst idea I've ever heard of from an economic standpoint.

While we're busy "innovating" and "figuring things out", the following would happen:

- Consumer spending would drop significantly as the 100% increase in gas price cuts directly into discretionary spending.

- With lower discretionary spending, cyclical companies will undergo large layoffs and unemployment will rise above 7%.

- An inefficient market will be created, one in which gas will be available for $2 - $3 per gallon in Canada. A black market will be created in an attempt to buy gas cheaper in Canada and smuggle it across the border. Then you immediately have a national security crisis.

- Recognizing that drivers will begin to move away from the roads and towards public transportation and recognizing that demand for their services is increasing, public transportation systems will raise prices.

- Worker productivity will be drastically affected as many low-income workers will find it increasingly difficult to get to work.

- The drop in consumer discretionary spending will lead to lower profitability for our businesses, reducing the amount of taxes the government collects, thereby nullifying whatever they collect by enacting a floor on gas prices.

- Other countries will gain a competitive advantage against us as their citizens will only be expected to pay $3 per gallon for their gas, while we pay $6. This creates a scenario ripe for a bigger federal deficit, further weakening the dollar.

You're possibly talking consequences of epic proportions. Easily the worst idea I've heard in a long time.