Simple Economics Solves Soaring Gas Prices

Gas has topped $4 per gallon and what is Congress doing about it? They’re shifting the blame from their decades-long ineptness into the lap of “Big Oil.” Sure, everyone is looking for someone to pin high gas prices on, and the oil industry is a convenient target. This feeling is further exacerbated by the record profits oil is generating. But I say, what’s wrong with that? After all, aren’t profits the goal in a market economy? Evidently, our Congressional leaders don’t think so because their solution was to enact a windfall profits tax on the oil companies. Fortunately, it didn’t pass. So, what’s the solution?

It’s simple economics–supply and demand. As supply increases, demand decreases, and vice versa. To reduce gas prices we must either increase supply or reduce demand. I believe we must do both. A short-term solution is to increase the supply by drilling for domestic oil. In the long-term, we need to find an alternate fuel source, such as nuclear power, wind, sun, garbage, or whatever.

Unfortunately, we’re not going to see any relief for a while because our lawmakers refuse to take responsibility for the problem and solve it. They would rather submit to the environmental lobby by killing the Offshore Drilling Bill. Furthermore, Congress has resisted the shift to an alternate fuel source because it wouldn’t produce a benefit for at least seven years. Really? What kind of logic is this? If we had invested in nuclear power seven years ago, we’d be seeing some benefit right now, wouldn’t we?

Truth be told, Congress really isn’t too concerned about gas prices. In fact, some, like Barack Obama would like to see even higher prices at the pump!

Unbelievable!