View Single Post
Old June 17th, 2004, 10:19 AM  
bloog42
New Member
 
Join Date: June 17, 2004
Location: Vermont
Default

One thing that you probably should remember to factor in is that while, yes, the gasoline prices are higher than they have been, there is a nifty little thing called inflation.

Inflation is what happens when the Government prints more money but the GDP does not rise with it.

There are many reasons why the Government would do this. Sometimes its to fund expensive things like healthcare and wars. Within minutes of the 9/11 attacks, all of the money printing places had $100 and $1000 bills rolling off them and being distributed to the banks as fast as possible. This was to prevent a run on the banks and a possible economic collapse.

Because there was suddenly a lot more money, but no more things being sold, bought, or made, we have had a small recession for the past 2 1/2 years. Of course it didn't start with 9/11 and it certainly didn't stop.

One of largest continuing causes of the recession has been the percieved higher costs of oil. When you figure in the inflation you will see that we still have cheap oil compared to the 70's and 80's.

Unfortunately our economy is built almost entirely upon the confidence of its users, which means that a percieved hike in gas prices will have essentially the same impact as a real one, and that is not very good.
bloog42 is offline