As I made the 100 mile trek north last weekend to visit family for the Thanksgiving holiday, I couldn't help but notice how inexpensive gas has become. Checking back in my gas log, the last time I bought gas for under $2 a gallon was in 2002!
The author explains that thanks in part to high gas prices (exceeding $4 a gallon at times), the number of vehicle miles traveled (VMT) by Americans dropped for 11 straight months! People were not only driving fewer miles, but also driving them in more fuel-efficient automobiles.
The combination of reduced demand and a lovely little recession have brought gas prices back down. And gas tax income has come down too. The author suggests raising the gas tax to keep prices high, demand low, and income high. Not a bad idea, but probably not too popular.
It will be interesting to see where the next few months and years take us. As the author says, "A lot depends on whether Americans keep doing what they're doing, regardless of what the numbers are on the gas station signs."
Image source: Christianity and the Confusion