[For the next couple of weeks, I'm going to mix in a few devil's advocate posts in here. It's been done a few times in the personal finance space, but I think it breaks up a little of the monotony of the everyday post. I've only got a couple of ideas to start, so it could be a short-lived series. If you have some ideas you'd like me to cover, please contact me. Finally, let me warn you in advance this article is a little two articles in one. You'll see what I mean.]
In this month's Kiplinger's magazine (well October, 2013 since magazines seem to live a month in the future), I noticed an interesting article about fewer buyers for cheap gas. The author, Knight Kiplinger, states that every time gas prices go up people drive less and conversely when they go down people drive more. This is not amazing. In fact, it's common sense.
He thinks that's going to change. That caught my attention.
The nerdy folks in Kiplinger Business Forecasting Group think that oil prices are going to drop 30% by 2016... which would lead to about a similar price drop in gas prices. If all goes according to the prediction we'll have more money from the savings. Awesome. Kiplinger thinks you won't put that money into driving more, but instead towards other expenses.
In the discussion of one of my article published this week, Are We Financially a “Lost Generation”?, readers noted that the price of health care has sky-rocketed. As a military family, I'm thankfully insulated from the rising costs, at least for now. My friends mention seem to mention it at least once a month. It wouldn't be a surprise to see any money saved on gas to go towards their health care bills.
Give Me High Gas Prices
In thinking about the gas prices going down, a small part of me was disappointed. Over the last few years, I've had some conversations with my friend Kevin and he's convinced me that high gas prices are a good thing.
Why could high gas prices possibly be a good thing? When the price of gas gets high, people and companies adapt. Companies put more money into hybrids and giving us more MPGs because the people are buying those cars. It sparks change. Change for the better as we invent new solutions to combat the problem.
If gas prices stay low for an extended period of time, there's no urgency to improve. Things stay stagnant. The need for progress is limited and the money goes towards other things.
So give me high gas prices now. Get them high enough that manufactures are doing whatever they can to put a SUV out there that can get 50 MPG (or MPGe), even if it means I have to plug it in over night. Let's see smaller cars consistently get over 75 MPG. I want to a super-efficient solar panel on the roof of the car and a wind turbine on the antenna. Give me some sort of magnetic system in the engine to reduce friction. Give me whatever is going to get us there even if these somewhat far-fetched ideas can't.
And when we have cars that are super efficient, I'll take lower gas prices please. Then we'll be able to go 500 miles on $15. Our wallets and the environment will love us.
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