Why the Price of Gas Has Such Power Over Us
There’s an awful lot of misinformation out there about gas prices. Here’s what most of it means.
Gas Prices Are Fueling War
On Friday, October 1st, the federal government increased gas prices across the country. The price surge took place on a day when prices at the pump had gone unchanged for over a month.
There were signs that the economy was getting worse before prices went sky high. Consumer confidence had fallen to a 16-year low.
Meanwhile, Obama’s energy agenda includes more drilling for oil (for the first time since 1988) and expanded use of natural gas (up from about 2 trillion cubic feet in 2008 to about 3.4 trillion cubic feet in 2014).
The new price hike has also sparked confusion about how the government will balance its budget.
“Our economy is already overburdened with debt, our military is overstretched with war, and our food supply is failing,” Obama wrote in a memo earlier this month about the new price hike.
“In a world of increasingly volatile energy costs, we have to address the challenge of how to protect our economy while also making sure that we don’t increase the deficit.”
Obama and Congress want to raise the government borrowing limit, increase taxes, reduce spending, and balance the budget. They have no idea how they would do that, but they do not want to talk about it. Instead, they want to talk about the federal deficit — and make sure that the deficit is as small as possible.
As you can see, gas prices appear to be the perfect weapon to use to hurt the economy.
How Prices Hit Home
Gas prices affect the economy in three main ways:
1. By reducing overall consumption.
2. By reducing spending on things like food and healthcare.
3. By causing people to waste money on alternative fuels like electricity and