Do you ever stop and realize what the increasing price of oil will do to the American economy in the long run?

Question

Everything is tied to oil. As gasoline prices increase, so do the costs of production and distribution. Do you think this will eventually doom our economy?

Look at the bigger picture here, and what increasing fuel prices will do to the middle class. More and more people are living paycheck to paycheck, with more people utilizing credit than putting money in savings/investments. It will be harder and harder for the middle class to keep within a livable budget. The cost of gas, groceries, durable goods, heating ect will all increase exponentially. Increasing the interest rates may be a short term fix for inflation, but eventually higher interest rates will depress an already shakey housing market and we will likely see a dramatic increase in defaults.
I think the only winners here will be those who invest in oil. Everyone else will be reduced to second class citizens.

Answer 1

I did stop and realize , so I invested in it , they say if we pop a clutch with Iran oil will go over 125 dollars per barrel , making gas go up to 8 to 10 dollars per gallon ...

It will doom those who live off of the good credit they just had to have , but unless you have plenty in savings you will be hurting , so slow consumer spending will not hurt me , I am not a big spender I am a saver , I do not buy nothing to support Hollywood ( movies Cd's etc.), they have money and will be fine without my money if the economy slows way down , I slipped in a several decent investments, and have cash on hand , yes the economy will hurt , those who have plenty of cash will be fine , those with credit and no cash will suffer the most ....

Consumer Debt is already over 2.5 billion and half are expected to default , of course they blame Bush for making them use credit cards , and get motgages without doing the math before they signed a contract ...The feds cutting the rates is going to hurt the economy , and it is only done to help the idiots who borrow money they can not afford to pay back ...So despite gas prices , consumer debt will crush the economy if it is not paid back to the banks , I do see credit becomming almost obsolete , which will prove grandpa right when he said work , and save all you can ... many soccer moms will be on mopeds because many of their large SUV's are tied in with a lease or second mortgage , which was stupid to do ...I think stupidity of borrowers will kill the economy just as quick as higher fuel prices , I have worked , saved , and lived debt free , and yes 8 dollars per gallon will stop most joy riding , and maybe slow down my playing in the mud in a truck that gets 7 miles per gallon but it will not totally stop me from living .....

Answer 2

I think that's the idea. The have's and the have more's (oil CEO's and investors) are going to do very well, and the middle class is footing the bill, and if we had to deal with this another 8 years, our economy would go under. Thank Heaven next year is an election year.

The current situation has absolutely nothing to do with supply and demand. The prices are being artificially jacked up, and CEO's are retiring with 400 million dollar retirement packages.

It's robbery, plain and simple. Jan. 20, 2009 is going to be the first bright day in a long time for the middle class.

I'm having to buy a lot of gas on my credit card. Thank Heaven I don't have a long commute, or I wouldn't be able to make it financially.

Answer 3

no. because we will gradually become more efficient. i think its a good thing. right now we are screwing up the enviornment and there is a lot of waste, if its expensive cleaner energy sources will become more practical and we will drive smaller cars, use more efficient machinery, rely on efficient rail transportation rather than trucks, etc. and like the guy above me said we have some of the lowest gas prices in the world, its been twice as expensive in europe for years and they do fine. theyve adapted and they are a lot more conserving than we are. they all use public transportation, they live in smaller houses or apartments, etc- in america people have the mindset that its a "right" to own a car- and a big wasteful car at that, not have to use public transportation, have a big house with AC cranked in the summer and heat cranked in the winter expensive oil will be one of the best things that has happened to this country.

and you know what- if everyone just took steps to be more efficient, demand would plunge (and prices with it) if everyone did things like recycle plastics, take all of the big trucks and SUVs off the road, buy domestic foods from grocery stores rather than stuff from australlia or china, take a bus on longer commutes, keep the heat down in the winter and the AC down in the summer, etc. we could be saving a lot of energy which would reduce demand and drastically lower prices as well as pollution. but people are too stupid and selfish to make their lives a little less comfortable.

it is scary though, oil is expected to become too expensive to use as a workhorse fuel within 50 years, its not that far off and at the moment we dont have much to replace it. yeah there is alternative energy, but at this point most of it sucks and is unfeasable on a large scale. but everyone has to have their big trucks and SUVs that get 10 mpg

Answer 4

Considering that the U.S. has been lolling in a kind of fantasy with the lowest gas prices in the entire world, the rise could upset some. The rise in gas prices does however increase the profits of Americans that have invested in oil. There will be a balance out, no problems

Answer 5

This is the dilemma our society is facing and the government is trying to keep it under wraps. Eventually it will come out because the oil will be so expensive they will have no more excuses. The difference in political parties and this election will be the most critical in our nations history. The republican answer for Peak Oil is to take it from the middle-east and the democratic answer is alternative energy. This is the beginning of the oil wars and we ain't seen nothing yet if the neo-cons have their way.

Answer 6

It will not doom the economy. Many of American citizens have stocks in oil companys. Those that do are making large profits.
Granted prices are rising, but American can afford to 'dig deeper' into the wallets to pay for the increase. The Fed will keep inflation in check by raising intrest rates. I would not be worried about this.

Answer 7

I think the rising cost of oil is a great thing. Maybe now we will be serious about finding alternatives that don't fund terrorist regimes. We won't be so beholden to them that we can ignore when they attack us, as we did with Saudi Arabia on 9/11. We also might put a lot less crap in the environment. It's a very good thing.

Answer 8

Rising oil prices are a great thing. The more prices go up, the more the demand of oil (especially foreign oil) goes down. If prices continue to surge, companies and automakers will look for alternative fuels to please American appetites for energy consumption. The US economy is robust and diverse. Living in a capitalist system, we will find answers to our oil problems.

Answer 9

So far Gasoline prices are holding it is the heating oil that will harm lower income persons. The price of fuel for trucks will cripple the economy if the govt. does not intervene.

Answer 10

Yes that will doom the economy. This is why Bush is trying to take over the Middle East. Even Alan Greenspan advised him that if we were ever denied access to their oil line our economy would face a disasterous effect.