A spirited debate about gas prices started in the comments of my previous post and has continued over at The American Check-up.
Some seem content that the recent spike in prices have somewhat abated and don't think it should an issue to be concerned about anymore.
Well I don't know anyone who isn't concerned about the price of gasoline, fuel oil and natural gas. It cost me $2.50 a gallon to gas up my car yesterday and I was recently notified that our budget plan to heat our home will be $50 more per month than last year. That is a big chunk of money that I would normally spend on other things. This enormous rise in energy costs in such a short time frame is going to have all sorts of negative consequences. Inflation is going to spike as the price of energy affects the price of just about everything. People will have less disposable income and will be forced to cut back purchases of non-essential goods and services. And that will hurt retail sales, manufacturing and entertainment industries. If inflation keeps increasing at the 1.9% (22.8% per year) rate it did last month the Fed will hit the brakes, raise interest rates dramatically and probably send the economy into recession. Not to mention the hardship it will cause for people of modest means who are going to have to make some very unpleasant choices.
This is not a new problem. We have gone through one oil crises after another since 1974 when OPEC cut off our supply because of the US support of Israel in the Yom Kippur war of 1973. President Carter tried to move this country toward energy independence and was ridiculed for his efforts. Because of our dependence on foreign oil this country is now involved in the 2nd war in the Middle East in the last 15 years. There are more to come. Oil is the biggest national security threat to our country. If we didn't need oil who cares if Iraq invades Kuwait or any other country? We wouldn't be sending billions of dollars to the middle east to fund their armies and terrorists. Right now the US is financing both sides of the war in Iraq. The Republicans answer? Give tax breaks to companies that are swimming in money to encourage more drilling. Common sense measures like raising the CAFE standards, encouraging conservation and developing alternative fuels are ignored. Of course there is no money in doing those things. Am I the only one who doesn't think it's a coincidence that the top jobs in the government are held by oil men and we're paying almost $3 a gallon for gas?
1 hour ago