Tuesday, February 28, 2012

3.8 Spending and Infrastructure

    "Why your Prius will bankrupt our highways" was written by Jordan Weissmann and was published on 2 February 2012.The article is about how gas taxes have funded our roads for decades, but our fuel-efficient cars and tax-allergic Congress are leading to an infrastructure break-down. House Republicans unveiled a highway spending bill that would cut funding for Amtrak and nix high-speed rail projects. And it would pay for its $260 billion price tag partly with royalties from expanded offshore oil drilling. This bill dead-on-arrival in the Democrat-controlled Senate.
    The federal government has maintained a Highway Trust Fund, paid for mostly by taxes on fuel, that helps cover the repair and construction of our country's roads, bridges, and mass transit. Congress hasn't raised the gas tax since 1993, and since then, inflation has eaten away at least a third of its value. Americans are now using less fuel than they did just a few years ago. As a result, they're paying fewer gas taxes, and less money is flowing into the Highway Trust Fund

1. Why won't the Republican sponsored bill at the beginning of the article ever actually become law?
The Senate is controlled by the Democrats. 
2. What is the Highway Trust Fund?
A bank account paid for mostly by taxes on fuel, that helps cover the repair and construction of our country's roads, bridges, and mass transit
3. What does the article mean when it says "inflation has eaten away a third of its value"?
That the gas tax isn't worth as much as it should because inflation is depleting the value of a dollar. 
4. How is it actually both a good and bad thing for Congress that Americans have consumed less gasoline?
It is a good thing because Americans are caring about fuel efficiency which helps the environment, but on the down side it 
5. Explain what Exhibit 2.19 shows us.
HTF Baseline Forecast vs. Conservative Forecast
6. Explain what Exhibit 2.21 shows us.
The Annual Federal Revenue Needed to Maintain Current Highway  and Transit Program Purchasing Power
7. How have the Obama Administration's new gasoline consumption standards created new challenges for Congress?
Congress would have to make sure that current system's funding would be obsolete.
8. What are potential solutions to the problem?
Moving to a system that charges motorists based on the number of miles they drive, rather than the gas they burn.



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