Soaring Gas Prices Threaten Family Budgets

Gasoline prices, which for months lagged behind the big run-up in the price of oil, are suddenly rising quickly, with some experts saying they could approach $4 a gallon by spring. Diesel is hitting new records daily, and oil settled at a record high of $100.88 a barrel on Tuesday.

The increases could not come at a worse time for the economy. With growth slowing, energy increases that were once easily absorbed by consumers are now more likely to act as a drag on household budgets, leaving people with less money to spend elsewhere. These costs could worsen the nation's economic woes, piling a fresh energy shock on top of the turmoil in credit and housing.

"The effect of high oil prices today could be the difference between having a recession and not having a recession," said Kenneth S. Rogoff, a Harvard economist.

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Comments

[mmckinl]

Yep, Starting with Reagan, 30 years of twiddling our thumbs.

And now the price must be paid, but it won't be paid by our incompetent leadership, it will be paid by those who can least afford it.

[jackpinesavage]

In 1914, Henry Ford and Thomas Edison planned to build an affordable electric car (if not for the war and some shenanigans by the lead battery cartel, they might have succeeded). This was at the time when Edison was working hard to get everyone off the grid.

They say we're not ready for hydrogen (though Honda's ready) because there is no infrastructure. But there is. Hydrogen is a common industrial gas and there are several US companies who already pipe/truck hydrogen around...c­ompanies with revenues in the billions.

At the same time, we're happy to build infrastructure to pursue corn ethanol...­which has the unpleasant side effect of pushing up food prices. Why grow wheat for human consumption when there are fat subsidies and high prices for fuel corn? A 50# bag of flour in my area has recently climbed from $9 to $30.

We have all the answers, we just aren't willing to put them into practice.

[guajiro]

Ethanol, hydrogen, natural gas, electric, they're all comin-roun­-the-bend! Don't fall for blaming the high gas prices on ethanol. Con-Agra and other huge multi-billion dollar corporations have bought out massive farm lands in Mexico and have moved Hog slaughter/beef slaughter and other similar operations there to avoid OSHA, EPA, etc. Look around the country; you won't see many hog slaughter operations, except in Iowa, Nebraska, anymore. The newer version of ethanol, cellulosic ethanol, won't use corn. It will use switch grasses and is a boon to the local farmer. This is why these huge corporations are spending billions in trying to get americans to buy into the idea that ethanol is a bad thing. Look, there is a surplus of oil on the market right now and they're still not dropping the price of gas. Whatever happened to that bull they used to feed us about prices going up because of terrorism and other fears that drove the market price of gas up? Well, now that there's a surplus, why aren't the prices going down? A shortage of refineries they'll say. Yeah, well, just like Con-Agra and other american companies (Ford, Cheverolet, Caterpillar, John Deere, Annin Valves, Johnson Controls, ETC.), have all managed to move operations to Mexico, it won't be a hard sell to any impoverished Mexican state to accept a deal with an american company to build refineries there, right across the border. As usual though, it's more cost effective for them to fool the public than to serve the constituents who make their livelihood possible.

[lungfish]

My father is a long haul trucker, an independant, and told me last week that he has never seen so little freight moving or so many parked trucks. This is a very bad sign.

Meanwhile, the idea that owning a monster truck like Wadenelson1 mentioned in his post below doesn't seem to want to die. These vehicles are gas guzzling, polluting and a menace to anyone that isn't in a similar sized vehicle.

If we don't get a handle on steering consumerism towards sustainable practices we won't have much to sustain.

Opec "has us over a barrel" and these are Bush's friends who are doing it. The Saudi's have no love for the US, but they will take our money. They also sponsor terrorism against the US, a majority of the 911 attackers and plotters were Saudi and financing came from Saudi backers. Of course, bin Laden is Saudi.

Why didn't we just attack Saudi Arabia? The argument was stronger than it is for attacking Iraq... We could have tactically nuked the place flat and taken over the oil and reconstruction market for what we have spent on simply pacifying Iraq.

Instead we are treated to 100dollar a barrel oil while Dubya makes out with Prince Abdullah -

[almoguy]

A friend of mine owns a furniture store and he has now turned almost exclusively to getting his shipments via rail. His shipping costs are about 1/3 cheaper than by truck. I am seeing evidence of a resurgence of the rail system in the mid-south. Tracks are being repaired on abandon runs and engines and cars are being revamped. I think this is a very positive move. One engine and lots of cargo space--it makes sense. I am encouraged by this trend.

[guajiro]

I wouldn't worry about the over-sized vehicle fella. I'm already seeing tons of 4-wheel trucks and SUV's with for sale signs on them. Come the weekend, when everyone's zipping around town in a 50 mpg, air-conditioned sporty SUV-lite, they're sitting at home grousing about gas prices.
http://autoshows.ford.com/174/2007/10/01/verve-concept-small-cars-in-ford%E2%80%99s-future/

[wadenelson1]

As I sat eating my lunch in Del Taco today, I saw an endless parade of trucks go through the drive-thru, starting with a 2008 F-350 to a Duramax to a Expedition, crew cab after crew cab, on, and on, and on. Literally, 25-30 supersized vehicles in a row.

On a lunch run. Not hauling anything in the bed. 1, 2 guys at most in each of 'em.

I remember when a lot of contractors used to throw their crap in the back of a dinky Toyota 4x4 pickup and call it good. Even haul a little lumber on a headache rack.

Not only do these monsters guzzle fuel, they make it unsafe to share the road if you try and drive an Accord or a Prius. My entire car sits below the bed of most. Talk about BLIND SPOTS. They can't even hear my horn over the bellowing of their diesel engines.

There will be abandoned supersize trucks parked everywhere in a few years, as well as all those who couldn't keep up the payments sitting on bank lots. Like car-henge, it will be a monument to American selfishness. I got mine!

What America has become, with the haves versus the have-nots, I feel more and more like an alien every day. An illegal alien.

[rascalov]

And the bigger the truck ... the less chance it has anything in the bed.

[ajax2]

Ben Bernanke played three card monty with the public today and blamed them for bringing inflation on themselves. Ben as the experienced con artist, hid the Bush debt 9 trillion, and Bush dollar .50 cents, below the table.

"Bernanke said there are "slightly greater upside risks" that inflation could turn out to be higher than the Fed currently anticipates, given the recent run-up in energy and food prices."Sh­ould high rates of overall inflation persist, the possibility also exists that inflation expectations could become less well anchored," Bernanke warned. If people, companies and investors think inflation will move higher, they will act in ways that could turn inflation even worse, a sort of self-fulfilling prophecy."

You'all brought it on yourselves, Uncle Ben.

[iPolitics]

Iraq is #4 in oil reserves. Think the war had an impact on these prices?

[turkeyfish]

Why the Iraq war has been fully paid for by all the Iraqi oil revenues. Hasn't it?

Who was it that gave us this line?

[mrcontinental]

Threaten? It's no longer a threat, it is already present and causing havok.

[bushdoescrack]

america is a nation of whiners, just came back from england, gas was about $2.10 a litre, i heard little crying though. almost every car i saw was a small, fuel efficient type, americans have a lot to learn.

[OilWarsDotCom]

Fuel has ALWAYS been high in most other countries. Our fuel prices have trippled in in last 4 years. This has not been a gradual increase blue collor folks could keep up with. Most of Americas workers are service people (since we manufacture little here) who only see a 2 to 3 % a year increase in pay.
Until incomes catch up with the increased costs of fuel and goods, I think folks will quit buying crap they don't need......­Of course there is always mastercard

[McJeff]

better car design, more fuel efficient, and (here's the difference between US & UK) not as far to drive.
That's one of the main reasons why high european gas prices don't get whinged about so much by the euros....t­hey don't have to drive as far on average.
I'm in England and France several times a year, and mostly what I am impressed with is their excellent design approach to autos. They handle better, have nicer interiors, and get better gas mileage. The cars are smaller, but more fun to drive. They aren't tiny, just not as huge as most of the American pickup/SUV things I see here in the States.

[Henk]

The bulk of the price difference is Tax. Europeans get something from that: Health Care, Free Education and an excellent public transportation system. Talk about freedom. Give me what they've got and I don't care what the price of gas is. All I get for the high price of gas is the pleasure of knowing that my money has made Exxon Mobile the most profitable company in the history of the world. Yippeee!

[turkeyfish]

You obviously haven't talked to any London cab drivers. I got an earful the last time I was in London.

Admittedly, the Brits don't have the American problem of paying for oil with dollars. As Bernake and Co. print money to bail Bush and Co. out politically before the election, the price of oil will rise very quickly as these "new Bush-Bernake dollars" buy a lot less oil (not to mention anything else).

You can tell a lot about the strength of a country by what people think its currency is likely to be worth in the future.

You can expect prices of all items to begin to go through the roof, even during the current deepening recession. Its only when they realize that they have destabilized the bond market that the Fed will retrace itself. Once the bond traders get panicky hold on to your hat as the bottom is going to fall out of a lot of things and people will learn that this administration has no credibility on anything, other than greed and incompentance.

What Bernake is signaling to the markets is that the Fed is prepared to bail out the Republicans by printing money, even if the average American will have to pay for it in inflation. His problem is of course, that those who buy debt (bonds) will demand protection as well and real interest rates will rise, even as the recession grows more severe and the entire financial market gets shakier and shakier.

[OilWarsDotCom]

Better bust out that Hamburger Helper - Oh wait, who can afford hamburger?

[mrcontinental]

Tuna helper is more like it.

[OilWarsDotCom]

Daaaaaaaaaaaaaaaa - Of course the price of fuel affects family budgets. NO persons salary has be able to keep up with the increased cost of transportation. If fuel cost you $200 a month three years ago - It is now $600 a month. Did your salary go up to cover this cost? Probably not. Did all the made in China crap at Wally Mart go up? You bet. Folks are going to quit buying items they don't need and that is, other than war, what the American economy is based on. 60 inch 1080p TV or gas to drive to work?
PS the Euro is over $1.51 - The Canadian dollar is worth 2 cents more than the US Dollar AND gold is up to 958.60 and ounce, silver 19.26 and Platinum 2127.00 an ounce. Perhaps a depression will help the sheep see the light and rid this nation of the corporate thieves and politicians

[kimbutgar]

My husband and I sold our Nissan Pathfinder in 2003 because we knew that under bush gas prices would rise. We brought a Pontiac Vibe for his daily commute that gets a lot better gas mileage. I have another gas guzzling car that I use only 2 times a week for errands. I take the bus most days.I would love to buy a Prius but don't want car payments. Things are getting tough out there and bush today says "We're not in a recession, I don't think we'll go in a recession. We're in a slowdown". What country does this man live in? He is so clueless! He lives in his Ivory tower and has no idea what real Americans are experiencing. He is the worst president ever! And he wants to veto the mortgage bill.

[OilWarsDotCom]

That's it - these rich corporate types as well as politicians won't hurt like the common man. When we are in the soup line they will be dining on Tbone steaks.

[gcallaghan]

When that soup runs out, we'll take that steak and there isn't shit they can do to stop us.

[bitabingbitabangbitaboom]

TIME TO REBOOT AMERICA!

[gcallaghan]

Gas hikes result in price hikes across the board: food, clothing, heating, etc. It used to be that families could get through tough times by getting an extra part-time job to stretch the budget. The problem now is many jobs disappeared overseas and many of those affected already work at more than one job. This anti-american administration's policies are coming to fruition a few months earlier than Bush planned. He'll still be in office when his shitstorm hits this nation. If people believe his response to Katrina was an indication of how uncaring and incompetent the retarded codpieceboy is, they ain't seen nothing yet.

[almoguy]

I have a truck (that I actually use as a truck) that gets close to 30 mpg. I am constantly being asked by "Big Boy Toy" truck owners how my gas mileage is, and they really respond angerly when I tell them, not at me, but at the hogs they are driving. I rarely see these guys "fill it up" which is in the $70-90 range. They are basically driving $35,000 dollar anchors that they will never be able to sell.

[drkazmd65]

Dumped my Olds 88 at the end of 2003 partly for that same reason almoguy for a used 1.6L engine Mazda. In my (mostly highway) daily commute I get 35-37mpg and it 'only' costs ~$30 still to fill it up.

It's paid for, it's reliable, and it sure helps us not break the budget just to get to work.

[OilWarsDotCom]

Exxon made more profit last year that any other company in the history of the world! We are getting shafted by the corporations without even a kiss!