I believe that the greatest economic stimulus package that could have ever been implemented is LOWER GAS PRICES.
Seriously. I believe that super-high gas prices forced people to trim their spending to essentials and to restructure their spending - including eliminating gas hogs. Now that gas prices have eased there is extra money each month.
I do not know about you, but I saw a ton of people at Wal-Mart on Black Friday shopping with cash.
The average American family is getting an extra $50 to $200/month simply because of lower gas prices. That equates to an extra $600 to $2,400/year.
What do you think?
Economic Stimulus Package Equals Lower Gas Prices
December 4th, 2008 at 10:06 pm
December 4th, 2008 at 10:11 pm 1228428699
December 5th, 2008 at 12:00 am 1228435212
December 5th, 2008 at 02:43 am 1228444993
December 5th, 2008 at 12:55 pm 1228481730
I say "low" in the sense that OPEC isn't going to let this go on for very long. They recognize that cutting supplies now to ratchet prices up would not only cause discontent, but effectively suffocate an already weak western economy.
You may not like your customers, but it's not good for business to hurt them to the point where they can no longer buy from you.
Still, this isn't a price level they are actually happy with. There's a lot of in-fighting to raise the prices soon, and it's only a matter of time before that does happen.
As for why it got so high, it was partly because Americans at the time still haven't changed their driving habits and enjoying gas guzzlers as well as the growing demand abroad, such as China. At the same time, OPEC for a while did not increase their oil supply as they have now (Bush's trip to Saudi Arabia did not help). All the while, we were still operating with stepped up operation in Iraq by the way of the Surge. Also, our strategic oil reserve has dwindled to almost nothing, and Bush decided that he would rebuild that stockpile at all cost, and last but certainly not the least was the massive oil speculating driving prices sky high, causing a large bubble that has since burst at this point.
The one silver lining coming out of this is that I hope we Americans will finally seek a way to permanently reduce our dependence on foreign oil. The idea has been kicked around for literally decades, but so long as there was cheap oil and big oil lobbying at Washington, little was ever done about it.
But now that US automakers are struggling to survive, hopefully, we're going to get some real changes for the better.