With gas prices at record levels, how are India and China's economies still growing so fast?!?

Question

I don't understand it...we're paying more than $4 a gallon and are quickly sliding into a really deep recession here in America, but India and China aren't exactly big oil-producing nations!

Why isn't their economies slowing to a grind as well?

Answer 1

I think your premise is kind of off.  Yeah, the economy is in bad shape, but it isn't simply gas prices rising by $1/gallon up from where they were last year.  The typical American uses about, what, 20-25 gallons a week.  So it's about 50 dollars more per weak for the average family.  This is a difference, but you can adjust to it.  And many are.  But, to be outraged is simply to admit to prior ignorance.  I think you could see this coming for years.

Their economies are not slowing to a grind because they are not the same economies as us.  Gas prices are affecting the economy, but not as much as insufficient demand.  The Fed doesn't lower interest rates so people can barrow it for gasoline!  LOL, it's to increase investment spending which is the primary source of economic growth.

Answer 2

Consider this though, China is Communist, the "State" buys the gas, thus fixing the consumer price any where they want. Since they buy in such great quantity, they can do as they wish. India is staffing the world's Internet services and paying their people dirt. A bicycle in India is a prized possession. There are far fewer people over there that own vehicles. We on the other hand, have vehicles that sit in the garages and are used during the summer, that's where the rub really is. If a "Big Boy Toy" tax was instituted I bet gas wouldn't be as hard to get or cost nearly as much. Did you know, at least 25 cents per gallon is just sales tax? And there's federal taxes and profit mark ups as well? Profit driven everyone of them.

Answer 3

The goverments are subsidizing it and keeping the price down artificially.