How bad will gas prices effect the economy? What's the breaking point?

Question

I heard a report of gas being a stifling $4.99 a gallon in LA today, it averages 4.15-4.45 in my area. But what’s the breaking point? Will gas get so expensive that people literally won’t be able to afford to drive so much so that they can’t work? We are hearing predictions of anywhere upwards of $6-$7 a gallon within the next couple of years, really?

It seems so backwards that at the same time the government is sending us checks to help stimulate the economy they are supporting the gas companies in their efforts to make gas as expensive as humanly possible. Correct me if I’m wrong but doesn’t that defeat the whole purpose of those checks? If everyone is so broke they can’t afford gas, where does that money ultimately end up? That’s right, in their gas tank. And if driving is so expensive, are people spending as much time on the road as they used to? Shopping? Going to the movies? Buying things?

Answer 1

In my macroeconomic corner of the world, gas prices have already affected the economy.  Both my husband and I are working from home as much as possible, not driving unnecessarily, not using electricity or water that we don't have to and putting off home improvement projects and purchasing consumer durables.  We are cutting back where ever and when ever we can and saving everything we can.  Many people in our area have already reached the breaking point and we see it every day with the number of foreclosures hitting the market.  Some people are walking away from over 50% equity in their homes because they can no longer afford to run them, not because of the mortgage crisis.  I do not think we have hit the bottom yet, but when filling the tank takes more than you make that in that day you know we're there.

Answer 2

we Americans depend on oil way to much.  were to green for our own good.  we could be drilling off the coasts of America but no we want to save the environment.  we could drill in Alaska more but people want to save the wildlife up there.  so its either pay the d**n gas prices or stop protecting wildlife that contains oil under it.

Answer 3

Well the breaking point is called Peak Oil, and its not so much a breaking as a cracking point, if you will. Put basicly its when the production of oil starts to cost more because the amount of available oil is declining. So the Earth's doesn't have to run out before we run out. Some believe that it already happened.

The scary part is that what you said about 'we can't live without it' or something along those lines, is quite the understatement. People don't realize that the petroleum that goes into our personal cars is a small fraction of the big picture. The water you drink, the food you eat, the monitor you're reading this on, is all a by product of oil or is made possible by oil.

People currently seem to be ignoring this. Sure we'll grumble about gas prices, but people don't see what is pushing those numbers up. Most just assume that its greed, which COULD be it. I don't really know for sure. Peak Oil is a solid theory but its one of many possibilities. As intelligent beings we have the ability to make predictions and projections, but sometimes we trust in them too much. No man can know the future. But one thing I do know is that our system must change. An economy based on infinite growth is already broken because nothing on this planet is infinite, least of all oil.

So will people stop buying gas at some point? Will we not be able to afford it one day? In the UK its the equivalent of $8 a gallon right now. So I'd say we here in America have it good. But I think that one day the pumps will be dry, and that will happen before we reach a point where we can no longer afford it.

We HAVE to change our system, our lifestyle, and our energy sources NOW. We can't wait one day longer. We should have been off of oil by now but everyone has just ignored it. They seem to want to ignore it for as long as they can. Like I said, no one can know the future, but it takes a fool to not realize that we can't continue the way we are now.

Answer 4

The question we should be asking is how long are the American people going to be deceived by not being told about the different areas in US being so rich in oil reserves. Start digging into  web sites to learn about this. The more you learn and find out, The more questions you will have. Instead of playing this sharade like were being forced to, we have to stick together and get this word out that we can dig for oil here at home and be self sufficient. One site in particular is "The Bakken Oil Formation".  It's pretty sad that we're sitting on 500,000,000,000 barrels of oil and being forced to pay  $4.15 a gallon for gasoline. That's a no brainer.

Answer 5

Raise Gas Price = Raise at everything else except salary.  Look look recently we had record milk price and mostly food. Mainly due to very high diesel price, trunk use diesel to transport food.

Higher gas price force many people to limit their spend on thing they don't really needed like electronic or other fun actives, result less people go watch a movie or shopping, force them to do deep discount, cut down employee etc..

Answer 6

don't be shy.  tell us how you really feel.