Remember in school when you would get questions like this:
A
train leaves Chicago at 6:45 going 50 miles per hour. Another train
leaves Detroit at 5:15 going 70 miles per hour. If its 400 miles
between the two cities, where do the trains meet? (Answer: Fuck you
teacher!!!)
Well, turns out, you were right when you said you would never need
to know how to do that. Turns out word problems are much harder than
that. Things are not so simplified; you are not given all the
information; and, most of the time, you don't even know the question
being asked of you is a math problem. This recurring feature will aim
to highlight when a topic in the news is actually a word problem, and
then I will try to solve it.
Today's question: Should I be in favor of John McCain's proposed
"gas-tax" holiday?
The answer actually depends on who you are. I will attempt to
answer it from several points of view. Here are some facts that should
be considered with each answer.
The current gas tax is 18.4 cents per gallon (24.4 cents per gallon on diesel fuel).
Estimates peg the value of this tax to the US government at $10 billion.
As of this writing, the national average cost of gasoline is $3.39.
As of this writing, oil costs $113 per barrel.
Here is the answer if you are bad at math:
$3.39 - $0.18 = $3.21, therefore, cheaper gas! Hooray!
Here is the answer if you are good at math:
I'm
an average American. I consume 500 gallons of gas per year.
During the summer months, I'll consume roughly 30% of this gasoline, or 150 gallons. Therefore, this tax reduction will personally save me about $27 this
year. Uh, that's pretty good, I guess. Hope the government didn't
need that $10 billion
dollars for anything.
Here is the answer if you are an economist:
The average driver reduces consumption in response to rising prices once prices cross approximately
$2.50 per gallon.
Decreasing the price per gallon should result in higher consumption.
Per gallon spending drops, but overall spending on fuel will remain
roughly constant. Therefore, the effect of this tax will be to remove
$10 billion from the federal budget, and transfer those funds to the
gasoline and oil industry.
Here is the answer if you are the gasoline industry:
Sweet, we're going to
make another $10 billion dollars this summer.
