The Oil Drum

34 comments on On practical solutions

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marko on October 13, 2005 - 9:27am

The complaints will become relevant to New York soon enough. At the very least, higher oil and natural gas prices will sharply raise the cost of the electricity that runs the subway system. High gas prices have already impacted buses. I bet that the MTA is running way over budget as a result.

The state government is not going to provide any more subsidy, so there will be higher fares as soon as the MTA can legally impose them.

Indeed, if high energy prices render enough Americans insolvent, there could be a sharp drop in consumer spending. High energy prices and increased credit risk will continue to exert upward pressure on long-term interest rates, with a likely deflation of the real estate bubble. Put these things together, and you have a major recession that will have an especially severe impact on the financial sector.

That will mean a decrease in tax revenues and therefore subsidies for the MTA and higher fares still for New Yorkers who will have less money to spend on them due to layoffs.

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Yankee on October 13, 2005 - 11:38am

I'm definitely not saying NYC won't be affected. Of course it will. We'll have to pay more for our subways and buses. But at least NYC already has the country's most extensive mass transit system, and I feel pretty confident that in the future, other cities are going to have to beef theirs up.

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Ben on October 13, 2005 - 11:43am

At least you HAVE a transit system. Can't say that around where I live.

I think that a huge number of people are still convinced this is temporary. That it is a result of katrina, or oil companies gouging, or a bad phase of the moon, or whatever; but they are just trying to hang on "until things go back to normal."