Musings from the CU Suite

Written by Anthony Demangone

You see a data point. Is it good or bad? It is increasingly hard to tell.

I follow the "blog" Calculated Risk. I find it fascinating. It also shows me how complicated the world is. Push something in "here," and you'll likely push something "out" someplace else.

Take this post from Calculated Risk. Americans are driving less.  Year over year, total miles driven has dropped nearly 1 percent. 

Part of that is due to high gas prices. And part of that is due to the economy. If you read the blog, you'll see others talk about weather as a factor, as well as the aging U.S. population, and changing driving habits of younger Americans. Also, for credit unions, fewer miles driven, probably means less of a need for new cars, all things being equal.

But here's another wrinkle. Fewer miles driven means we're using less gas. And today's cars are becoming ever more fuel-efficient. That's not a bad thing, right? Well, unless you're trying to fix America's roads. Every time we pump a gallon of gas, a portion (18.4 cents a gallon) goes into the Transportation Trust Fund, which helps pay for highway construction.  But the tax was last raised in 1993, and the amount of the tax was not indexed.

So, fewer miles are being driven by cars that use less gas. Care to take a guess on how that trust fund is doing? It is not doing well at all. It will go into the red in 2015. 

What does this have to do with anything? 

Well, perhaps this. 

It is a complicated, connected world. A myriad of factors push down the total number of miles driven, and that one data point ricochets all the way to highway construction. You can never study a situation enough, and even then, you have to accept that you'll never see every angle out there.

Be very careful with assumptions and long-term planning. Sure, planning is very important, but even the best plans are set down on a fluid foundation.  The gas tax would work well if people simply drove more. That turned out to be a big if.

So, do you just throw your hands up in surrender? Of course not.  But all of this could be a good reminder that we control a lot less of things than we think.

Have a great week, everyone.