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I repeat do not subsidize gasoline and oil. It is good that oil and gas are more expensive now than in the past. Why? Because, it will help wean us of oil. Higher gas prices, give incentive to consumers to buy more fuel efficient cars, incentive to auto makers to produce more fuel efficient cars (if the most up-to-date technology was used, for example, my Lincoln could get about 40 MPG, rather than 20), and drive less (which reduces congestion and pollution). Oil companies will have more incentive to look for alternative sources of energy. In sum, we need high prices to work for us. But how can you say that? People are suffering? How can you be indifferent to the pain at the pump felt by so many Americans? I am not. People are suffering, but there are ways to compensate for higher oil prices. Rather than subsidizing gasoline, we should, for example, subsidize secondary education more heavily. Mr. and Ms. Smith may still be angry having to pay $4+ at the pump, but now they pay less for their daughter's college tuition. Reducing drug prices through centralized price bargaining (a very successful technique employed by all those other countries that get better health care than we do for less money), is another possibility. With lower college tuitions and drug prices (these are just two examples; the point is we should subsidize goods whose consumption causes positive externalities - e.g. education creates are more cultured and skilled populace - to compensate for higher gas prices), Mr. and Ms. Smith will be under no greater financial pressure than before. Yet, they will driving less, are more likely to buy a fuel efficient car - making car makers more likely to make such a car, and be consuming more of those goods that have a positive effect on society overall, e.g. graduate school for Smith Jr.
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