(Readers: The assumed chronological date for most of the entries in this blog is after the expected 5th revolution in the US.  For more background about  the expected revolution – labeled the Revenge Revolution – and author, please view entry #01.) 

Scene: POTUS called Jordan to discuss idea.  Call interrupted.  POTUS calling back.

Jordan:  “Yes, Mr. President.  Get the problem solved?”

POTUS:  “One of those events where I had to be there rather than any real problem.  L021214_1242_24Resultsof1.gifet’s get back to where we were.”

Jordan:  “We were discussing the idea of funding infrastructure using the gas tax.  But you never told me your specific idea.  What is it?”

POTUS:  “Simple.  Set fixed prices for gasoline and diesel fuel.”

Jordan:  “You talking about having the same price in all 50 states?”

POTUS:  “Yes.”

Jordan:  “What about the spot price of oil?  That get fixed also?”

POTUS:  “No.  Let the price of oil fluctuate.  Besides we cannot control the spot market for oil.  If we ever tried the Republicans and even some Democrats would scream.”

JMercantile Exchangeordan:  “So, when the price of oil in the spot market declines, the government collects more tax revenue.  And when the price of oil increases, the government collects less tax.”

POTUS:  “Simple, huh?”

Jordan:  “What about state taxes on fuel?  Do they fluctuate?”

POTUS:  “That’s up to the state.  If they want to gamble and collect more tax in down markets, that’s up to the state.  However, if they want to link to the Federal policy, states would receive a portion of additional Federal revenue.”

Jordan:  “When you first said fixed fuel price, I thought the idea was crazy.”

PcrazyOTUS:  “Thanks.  I view that as a compliment.”

Jordan:  “Then with just a bit more thought the idea didn’t seem so crazy after all.  Knowing the price of fuel will be fixed takes away a lot of uncertainty.  But what about the long-term price for gas and diesel?”

POTUS:  “Build in some adjustment for inflation – use the WPI or some other measure.”

Jordan:  “As a cynical taxpayer…”

POTUS:  “Jordan, you cynical?  Since when?”

Jordan:  “I’ll ignore that.  As a cynical taxpayer how do I know the taxes will go for repairing and improving infrastructure and not just some other part of the Federal or state budget?”

Jordan:  “Make the use of funds part of the legislation.  Put some real restrictions on the use of funds.”

Jordan:  “You think the approach will generate enough funds?”

POTUS:  “Well, let’s start with pricing gasoline at $4.50 per gallon and diesel at $5.00 per gallon.”

Jordan:  “Wow.  That’s way above current market price.  Won’t the price be a shock to the economy?”

POTUS:  “C’mon, Jordan, you sound like a Republicant.”

Jordan:  “Well, pardon me, Mr. President.”

POTUS:  “I hear you but think about this.  When gas prices increase 50₵ a gallon, even $1.00 a gallon, what happens?

Jordan:  “A lot of ranting and moaning but really not much else.”

PORantTUS:  “That’s my point.  Not much else happens.  Now think about the benefits of eliminating uncertainty…really the benefits of creating certainty.”

Jordan:  “Car and truck manufacturers can focus on improving mpg without the concern that fuel prices will fall and make the programs less marketable.  Same with air craft manufacturers and railroads.  The concern over uncertainty has slowed the adoption of many fuel-saving technologies.”

POTUS:  “Consumers could buy knowing the price for fuel.  And most importantly, we would have the funds to begin rebuilding infrastructure.”

Jordan:  “Earlier in this conversation you asked me to play Mr. Marketer.”

POTUS:  “And so, Mr. Marketer, how do we get people to want to pay $4.50-$5.00 for a gallon of fuel…and be happy about it?”

Jordan:  “If we go back to what Tip O’Neill said about all politics being local, then we need to make sure all projects are highly visible locally.  And we need to cover many different locations.”

POTUS:  “We also need to include projects other than road related.  Otherwise we are going to miss key infrastructure areas that need to be rebuilt.”

Jordan:  “You talking about railroads and mass transit?”

POTmetro-north1US:  “Yes, specifically rail-based transit.”

Jordan:  “What about communications infrastructure?”

POTUS:  “Yes.”

Jordan:  “Water and sewer projects?”

POTUS:  “Yes.”

Jordan:  “Airports?”

POTUS:  “Yes.  We’ve neglected each one of those areas.”

Jordan:  “Seems a bit unfair to put the burden on only the people who drive.”

POTUS:  “Seriously, Jordan, your brain gone dead?”

JBrain deadordan:  “Whadda mean?”

Jordan:  “Every product we buy has some cost included for transportation.  Even if you don’t own a car, you are paying for fuel riding a taxi, train or airplane.  Plus transportation costs affect grocery prices, clothing…everything.”

Jordan:  “Then your point is the cost of fuel is really a consumption tax.  The more you consume, the more you pay.”

POTUS:  “Exactly.”

Jordan:  “But isn’t the fuel tax also regressive?”

POTUS:  “True but if you really analyze the data, most every group of taxes when measured again real disposable personal income is regressive.  Besides, you have any otquestionher ideas how to fund rebuilding infrastructure?”

Jordan:  “Not right now.”

POTUS:  “When you do, let me know.  In the meantime we need to start an education campaign on why $4.50 and $5.00 fuel is good for consumers, businesses and the country.  And, guess what?  You are in charge of the campaign?  Got it?”

Jordan:  “Yes, sir.”

POTUS:  “Good.  Now you have a week to get a draft of the campaign together.  Say goodbye, Jordan.”

Jordan:  “Goodbye, Jordan…I mean goodbye Mr. President.”