Why I'm not losing sleep over higher gas prices...

I should probably be complaining about the high price of gas. It is depressing that a few days ago, I drove past a gas station with gas at $2.95 a gallon and thought that was a pretty good price and that I would swing by later and get gas. I did - but 3 hours later the price had gone up to $3.05.

Would I like to pay less for gas? Of course. I'd also like to pay less for plasma TV's, 17" Apple MacBook Pro's, and Lexus LX470 SUV's. But I have yet to hear anyone talk about a plasma crisis.

But I don't drive a whole lot, so higher gas prices haven't affected me much. I probably use about a tank a week - I live 12 minutes away from work, and I drive a subcompact. So higher gas prices are costing me maybe $10 a week. Which I hate to spend, but it isn't going to force me to buy store-brand toilet paper to compensate.

This may change soon - I'm hoping to buy a house that would be a longer commute, and I would like to replace my PT Cruiser with something more substantial (and reliable), which would probably be a small SUV. But I think the benefits I would get from those things outweighs the higher costs.

But the fact is that gas prices haven't made a big impact on my budget because they are a small portion of what I spend to keep driving. My most recent Discover Gas Cashback card bill was $140, which includes a trip to NJ and back to visit the family over Easter. On the other hand, my car insurance bills are $240 a month, and I've dumped about $2000 into car repairs over the last 4 months (which is why I want to buy something more reliable). So the couple extra dollars I spend on gas are but a small part of keeping me on the road. And at least when I buy gas, I get a physical item - fuel that gets me somewhere. When I pay for insurance - and I pay something like $8 a day for car insurance - all I get is a piece of paper saying I have insurance.

So I think the reaction from both sides is a little overboard. Like James Taranto at WSJ's Opinionjournal, I think that the Repulican "lets mail everyone a check" plan is possibly the dumbest idea ever. Let's tax me, and spend a bunch of money to collect that tax, so that we can take that money and send it back to people, with all the costs of sending checks back to everyone. Why don't you just tax people less in the first place, and avoid all that deadweight loss to collect and then distribute back the money?

But I also think it's funny that those on the left are complaining. After all, high gas prices aren't necessarily a bad thing if they cause people to consume less. I personally don't think we are going to run out of oil anytime soon, but higher gas prices may reduce consumption slightly, and possibly more over the long term. I think that's good, not so much from the envonmentalist angle that it will reduce consumption, but from the fact that higher oil prices make it cost-effective to drill in places that otherwise wouldn't be profitable, and that that extra oil exploration and drilling may help to drive prices down by increasing supply. I think alternatives to oil that are cost-effective are a long way off, but this may increase research for them, and once again that is a good thing.

So I'm also not crying about the profits of ExxonMobil and the like. Did anyone complain about how little profit they were making when a gallon of gas was $1.09 like it was 6 years ago? If gas companies didn't make a proifit - and occasionally, a lot of profit - they would have no reason to sell us gas at all. Cracking down on "windfall profits" would only cause us to have fewer gas companies, higher prices in the long run - and no place to stop when the tank is going towards empty.

So I think for all the talk, that gas prices aren't going to change many people's lives - and that eventually they will go down.