Will $5 gas ruin our economic recovery?
That's provided that you actually think we're in an economic recovery. I think $5 gas, at its core, increases the cost of consumer goods and decreases the disposable income that households have available, which results in decreases consumer spending. As a result of all this you'll see that the manufacturing cost of goods goes up, which cuts into a company's earnings, which means the cost of goods for the consumer goes up. As a result, company's sell fewer products and have lower earnings....... In short, a dependency on foreign oil will eat this country alive. Thoughts?
It's hard to say actually. $5 gas might not have the feared impact. When gas went from $1.25 per gallon to about $3.75 per gallon last decade (which greatly contributed to the economic crash in 2008), that was an approximately 200% increase in gas prices. That was hard for the economy to accomodate, and we sufferred the consequences.
If gas now goes from $3.80 per gallon to $5.00 per gallon that is only a 30% to 35% increase. While it won't help the economy, we may be able to absorb that sort of increase without a new recession. There are some indications that high gas prices are spurring people to trade in older cars for new cars that are more fuel efficient, which is positive for the economy.
See my Hub $200 Oil: Should We Be Alarmed? http://rocknj.hubpages.com/hub/200-Oil- … Be-Alarmed for an explantion why hitting $5 gas or $200 oil might not have the bad impact that everyone fears.
I think $5 gas will bring economic activity to a halt because there are so many people without jobs or underemployed. Plus, the cost of everything will increase along with it. Gas prices are not the only issue, oil is used in so many different areas that we don't think of. Plastics, lubricants, makeup all have a variation of oil in them. The difference from 2008 is that so many more people are out of work or underemployed. People do not have excess disposable income to be able to overcome much of an increase.
It is a shame that we haven't developed our resources in this country. We have so much oil underground and offshore in this country for atleast 100 years.
by John Coviello 2 years ago
Why Do You Think Consumer Spending Is So Anemic?Despite an economic recovery that is going on 8 years and lower fuel costs, consumer spending numbers in the US are rather weak and is some months falling. Why do you think this is? Is the money being spent elsewhere or saved?
by Nathan Orf 5 years ago
Will the Romney/Ryan duo end up destroying the economic recovery if elected?Mitt Romney has endorsed Paul Ryan's budget in the most direct way possible, by naming Ryan as his Running Mate in Campaign 2012. If elected, will their budget help or harm the nations fragile economy even more?
by Anish Patel 6 years ago
Are we in the middle of an economic recovery?
by Brian 7 years ago
This may not be news to a whole lot of people, but, I am getting sick of this. Why isn't the Government doing anything about it, especially when they know that it is killing our economy? Not, to mention that we are fighting wars over it, only to have the countries we are "Aiding" are...
by alexandriaruthk 6 years ago
Is it ok to just cut and not spend during slow economic recovery?During slow growth in an economy like the US is experiencing right now (2012), is it more a viable option to inject money into the economy (i. e, stimulus) or focus more into drastic saving measures and cutting spending?
by qwark 7 years ago
Energy money RULES!Those who are dedicated to destroying the American economy KNOW that this is the way to bring us down...and they are doing it!The economy, being as it is today, if a barrel of "crude" rises to $180.00 - $190.00's, and gas rises to $5.00's a gallon, the cost of living...
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