Oil Cost/Price Imbalance: Challenges and Consequences. Economics of National Security Strategy and Resource Allocation (1)

摘要

One of the areas of greatest imbalance in our economy is the discrepancy between the price of petroleum products, and in particular, gasoline, and the cost of those products. That is to say, the price the consumer pays for petroleum products does not reflect the actual cost of the product - a phenomenon known to economists as an externality. The actual cost of gasoline does not adequately account for either its non- renewable nature or its deleterious effects on the environment -- hence it is a detrimental externality.