If you’re wondering about how the US should deal with the looming oil crisis, Paul Notari wrote an excellent overview on RE Insider this week. His prescription for the US is exactly what we need.
High oil prices are starting to move us in the right direction, but not nearly fast enough. We need to take action before Adam Smith’s invisible hand forces action on us, through demand destruction. Demand destruction is a nice way of saying that when gas hits $20 a gallon, people will start taking their bikes to work because they can’t afford to do otherwise.
Economists who pooh-pooh peak oil becase “demand destruction will take care of the problem” are forgetting the human element: demand destruction is incredibly painful. We need to take proactive steps to solve the problem, such as those outlined in Paul’s article, or the problem will be solved for us… and it will hurt. A lot.