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Archive for Friday, March 16, 2012

Persistent higher gas prices would threaten economy

March 16, 2012

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— Inflation remains tame throughout the U.S. economy, with one big exception: gas prices.

Those higher prices haven’t derailed a steadily improving economy. But if they surpass $4 or $5 a gallon, experts fear Americans could pull back on spending, and job growth could stall, posing a potentially serious threat to the recovery.

And the longer prices remain high, the more they could imperil President Barack Obama’s re-election hopes.

A few weeks ago, economists generally agreed that the economy was in little danger from higher gas prices as long as job growth remained strong. But fears are now mounting that gas prices could begin to weaken consumer confidence.

The average pump price nationwide is $3.83 a gallon. Energy analysts say it’s bound to climb higher in the weeks ahead.

“It’s a thorn in the side of the consumer and businesses,” said Chris Christopher, an economist at IHS Global Insight. The economy this year “would have been better and stronger if we didn’t have to deal with this.”

So far, higher prices aren’t undermining the economic recovery, which is getting a lift from strong job creation. It would take a big jump — to around $5 a gallon — before most economists would worry that growth would halt and the economy would slide into another recession.

That’s because an improving economy is somewhat insulated from any threat posed by higher prices at the pump.

The risk is that gas prices could eventually slow growth by causing some people to cut spending on other goods, from appliances and furniture to electronics and vacations. Gasoline purchases provide less benefit for the U.S. economy because about half of the revenue flows to oil-exporting nations, though U.S. oil companies and gasoline retailers also benefit.

Many American businesses suffer, too. They must pay more for fuel and shipping and for materials affected by high oil prices, such as petroleum-based plastics. Profit margins get squeezed.

Even if prices ease after the summer driving season, don’t expect gasoline to fall below $3 a gallon.

Comments

kernal 2 years, 1 month ago

Oh, come on. Are we going to keep hashing this over and over again? We've known for years that we couldn't keep paying low gas prices. Why the H#)) do you think car manufacturers began making cars using less fuel - because they're cute?

How did we ever survive without our SUVs!

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Flap Doodle 2 years, 1 month ago

Getting out all the old favorites, merrill?

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its_just_math 2 years, 1 month ago

"And the longer prices remain high, the more they could imperil President Barack Obama’s re-election hopes."

Think I've seen it all now......Obama is the victim of high gas prices. Ummmm----yah. Good example of media corruption. Of course, most of this forum's esteemed members won't take it that way.......unsurpisingly.

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Richard Heckler 2 years, 1 month ago

I'd say the republican party aka RINO/CINO party is far more expensive and detrimental to the economy that high gasoline prices. This is some achievement.

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Richard Heckler 2 years, 1 month ago

10 reasons NOT to bank with Bank of America http://www.truth-out.org/ten-reasons-not-bank-or-bank-america/131

Where did the Bush/Cheney/Paulson Bailout Money Go? Not much is known http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

Move Your Money - To local institutions and do your community a large favor.

A database to assist those wishing to move their money out of big banks that took taxpayer money and used it to pay themselves large bonuses:

http://moveyourmoneyproject.org/

http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.html

http://www.democracynow.org/2010/1/4/move_your_money_project_urges_people

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Richard Heckler 2 years, 1 month ago

Republicans cost the nation too much money! Let's not get duped again!!!!

According to what I was reading:

Republicans were in control when the economy crashed in 1929 which took 24 years to bounce back in the year 1953. It all happened under the umbrella of deregulation and reckless wild speculation with the people's money. Such as lending people money to play Wall Street and making loans such that took place during the Bush/Cheney years.

Where was so much money coming from to fuel this reckless use of money? From the Federal Reserve and and citizens money they were depositing in the banks.

Why would anyone support deregulation and zero enforcement when YOUR MONEY is at risk?

Back in 1929 like now the bankers and federal reserve did not give a damn for they knew the taxpayers would be forced to bail out this basically criminal activity. All under the republican umbrella.

Americans it is time to demand that the big banks be busted up and the Federal Reserve be taken out of "private" hands! Why would anyone support deregulation and zero enforcement when YOUR MONEY is at risk?

Republicans cost the nation too much money!

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Richard Heckler 2 years, 1 month ago

Why would anyone support deregulation and zero enforcement when YOUR MONEY is at risk?

There are no fiscal conservative republicans running because the RINO/CINO money sources will neither support nor fund fiscal conservative socially responsible government thinkers.

This ain't pretty in fact it looks to be the RINO economic policy written in stone = allowing reckless management of financial institutions then having taxpayers bailout the billionaires. When a party repeats itself what else is there left to think considering the past 3 repub presidents have participated in economic destruction of a magnitude beyond reality.

Why would anyone support deregulation and zero enforcement when YOUR MONEY is at risk?

Take a look at the long documented history of economic destruction which cost taxpayers trillions of $$$ and a combined effort equaling 20 million lost jobs.

How many more times should voters screw themselves,lose their homes and lose their retirement plans?

These same players are wanting to steal trillions of Social Security Insurance dollars.

Republicans cost the nation too much money! Let's not get duped again!!!!

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