The economics of oil dependence

Here's an analysis that's a rehash of an analysis I had previously posted 2-13 on bikeforums.net on the high costs associated with car dependence, purely from an economic perspective. Today being independence day, and there being many cartoons pointing out our current lack of independence from oil (FWIW, President George W. Bush said that "America is addicted to oil"), let's look at the numbers again.

Note: I would have liked to start with one such cartoon, but I cannot due to copyright restrictions.

Total number of miles driven annually in the USA - 2 trillion (2 * 10^12)

Assume that each vehicle gets an average of 20-25 miles/US gallon

So 80-100 billion gallons of gas were burned to move the cars.

If each car lasts 150,000-200,000 miles on average, that means that 10-13 million cars were "spent"

Now let's suppose that each car costs (including insurance, maintenance, registration, etc.) $15,000 to $30,000. Let's assume that gas costs $2/gal, excluding taxes - taxes are excluded because they fund the government to some degree.

So the total money spent on cars in a year is between 310 billion to 590 billion dollars. Notice how I've excluded environmental effects (e.g. pollution, sprawl) as well as the health effects of a sedentary lifestyle. If we assume that a typical family has 4 people, and a total US population is roughly 300 million people, each family spends between $4100 to $7900 every year, or $11 to $22 each and every day including weekends and holidays on such.

Of course cars have their utility. Things like traveling long distances, hauling large quantities of things, and so forth are difficult if not impossible without a car. But car dependency is a form of addiction, and is a very costly habit. Imagine if biking and walking (and mass transit!) were realistic alternatives for a majority of trips, how much money would be saved.