Question about our economy

[JerryNumbers]

Gas prices, when they are up to $4.00 per gallon, they're a major influence on our economy.

You took a walk around several blocks to try and prove it isn't, but you did no prove it.

Owner operators of 18 wheelers were hurt ecetermly bad by prices, they suffered severely, and did not have near as much money to support their family and to keep their truck up.

We have a Tyson's processing plant and feed mill in our town, they cost went way up and cut hugely into their profits, this effect the economy.

People who drive cars, because gas was costing them so much, they had less money to spend at the retail stores, this effect economy.

The railroads, with cost of fuel up, it cost them double to get the train where it was going.


You need to think this thru again.

[Pastorj]

I recently took a look at my own budget as I was thinking about the economy.

Prior to gas pricing skyrocketing
1. Food bill (about 225 mnth)
2. Gas bill (about 100 mnth)

After gas went to $4 a gal.
1. Food bill (about $400 mnth)
2. Gas bill (about $225 mnth)

Now, the issue is really not gas prices, but diesel prices, but the point is still the same. With the loss of about $300 mnth to these expenses, it made it much more difficult to pay bills. Now, I am not in debt and have a year worth of savings to cover hard times.

Let's apply this to a large # of Americans who are already in serious debt.
If the average family who lives pay check to pay check and in debt by thousands of dollars had the same impact to these two bills, they go deeper into debt and decide to stop paying their mortgage.

In a short period of time, banks begin to foreclose on these homes and the housing crisis is born. As banks begin to fail, the nation falls deeper into a crisis.

What started this whole thing. Hurricanes Katrina and Rita. Supply dropped after Katrina and Rita as the refineries were seriously damaged. Simple finance (Law of supply and demand). Supply was low and demand was very high. Over the last two years supply has increased dramatically and demand has dropped dramatically. Hence gas prices have fallen dramatically. Store prices have not followed as Diesel prices are still around $3 a gallon. So though my gas bill has fallen below where it was, food prices have not fallen as Diesel prices are still high.

In order to get out of this financial mess - People need to cut spending and pay their bills. As personal debt drops, spending will actually increase as people will have more money to spend on other things. For instance, the average American is in debt around $12-15k in just credit card debt. If you eliminated that debt, you would be able to buy things that you need which will then get our economy going.

Government bailouts are not the way to go.

[JerryNumbers]

Diesel fuel has come down just a bit, but your right, they are not where they once were. So transportation cost has not dropped very much, what little it has, companies are pocketing the saving.


I just feel, this was coming, It was just a matter of time, to many people had bit off more than they could pay back

For instant, one person I know who is on what we use to call welfare, she draws about $550.00 per month. She build a new $80,000 plus home, government loan, her part of the payment was just a bit over $250.00 per month.

But with only an income of $550.00 per month, there is no way she can afford to make that payment. But she is just one of the many out there who has done this.

But on top of that you have others who are making anywhere from $30,000.00 a year and up, who also have new homes with a high payment, and they are living pay day to pay day, many of them have reached the point they can no longer make their payments.

America has to many situations like the above. Something has to give, and its a downward spiral of our economy that is giving.

In our home town we have a Pilgrim Pride feed mill, with many Pilgrim chicken houses in our country. Pilgrim Prides stock is down to 37 cents a share, a part of the blame is high fuel cost.

Not long back I talked with the complex manger of our local Tyson's operation about 6 months back, he told me fuel cost are killing them, its the number one thing that has driven up our cost and we have no control over it. he stated, if it stays up this way for another 1 to 2 years, we are going to be hurting very bad.

Him having said that lead me to believe fuel cost is the one problem that has hurt Pilgrim, that plus they have bought out some other companies, but if the fuel cost had not have gone up so high, they would not be in as desperate of a situation with a complete lack of cash. I fear they may fall, if they do it will be hard on many people in our area with loss of jobs, and many farmers with chicken houses and a bank note and no chickens.

Maybe they will do like the auto companies, ask the government for help.

Of course our government should stay out of it.

[Danny Carlton]

Gas prices, when they are up to $4.00 per gallon, they're a major influence on our economy.

You took a walk around several blocks to try and prove it isn't, but you did no prove it.

Owner operators of 18 wheelers were hurt ecetermly bad by prices, they suffered severely, and did not have near as much money to support their family and to keep their truck up.

We have a Tyson's processing plant and feed mill in our town, they cost went way up and cut hugely into their profits, this effect the economy.

People who drive cars, because gas was costing them so much, they had less money to spend at the retail stores, this effect economy.

The railroads, with cost of fuel up, it cost them double to get the train where it was going.


You need to think this thru again.

Your budget = micro-economics
The economy = macro-economics.

Two different animals. If gas prices go up, other prices go up, but when prices go up, consumption goes down. When consumption (demand) goes down, prices then go down. That's called market forces. It's the natural equilibrium that exists in any free economy. If your spending rose for a few weeks, that may or may not affect eh economy as a whole. Even raising the price of one item doesn't effect the economy as a whole. That's one of the emotional aspects of what we perceive is the economy, but actually isn't.

Take a layoff in a specific industry. While a bunch of people will lose their jobs, that's a reduced expense for that industry, which translates into lowered prices for the rest of us. Those unemployed workers will also have to tighten their spending, meaning a small reduction in demand, also lowering prices. As prices go down, the demand by the rest of us goes up, which means productions goes up, which means more jobs--to match those needing jobs. Free markets self adjust. Gas prices went up this summer as they do every summer, as they do dramatically ever summer just before a presidential election. Market forces compensated and there was really little effect on the economy as a whole. The bailout mess is a different matter, but one that will be corrected once the MSM feels they can safely give credit to Obama.

[Danny Carlton]

Another thing ya'll are missing is the effect ethanol has had in all this mess. As there was a push last year for more ethanol used in gas (a worthless effort since ethanol has been proven to pollute worse than gasoline) demand for corn (what ethanol is made from) shot up. So corn prices went up, and since corn is the main feed for the beef and dairy industries, their expenses went up. So we saw a lot of prices go up, simply because of the increased use of ethanol in gasoline, an increase that had little to do with the price of food but a lot to do with the price of corn. This summer corn production increased to meet the demand but didn't really hit the overall pricing until the crops could be harvested and processed. That overlapped the seasonal oil price hike by Saudis trying to manipulate our government. As prices spiked up, the corn crops came in, demand lowered (both from the ethanol and people driving less) and the Saudis were left with a seriously lowered demand for their nasty ol' oil. Gas prices were only up a month at the most, when the sank like a stone. But with the bailout, food prices have been sluggish to respond to the lowered transportation expenses, and are still feeling the effects of last years lowered corn supplies--which affects corn products as well as beef and dairy, and eventually effects many other products that use corn as an ingredient--like high fructose corn syrup. Also as supplies of corn oil diminished, demand for other oils increased, which means those prices went up, along with everything they were ingredients in. It will take a while for the effects of the ethanol push to be balanced out since retailer are often slow in allowing prices to reflect costs when those costs are going down.

[deafnva77]

He who controls the Oil, controls the People-
He who controls the food , controls the World... H. Kissinger

[JerryNumbers]

Another thing ya'll are missing is the effect ethanol has had in all this mess. As there was a push last year for more ethanol used in gas (a worthless effort since ethanol has been proven to pollute worse than gasoline) demand for corn (what ethanol is made from) shot up. So corn prices went up' date=' and since corn is the main feed for the beef and dairy industries, their expenses went up. So we saw a lot of prices go up, simply because of the increased use of ethanol in gasoline, an increase that had little to do with the price of food but a lot to do with the price of corn. This summer corn production increased to meet the demand but didn't really hit the overall pricing until the crops could be harvested and processed. That overlapped the seasonal oil price hike by Saudis trying to manipulate our government. As prices spiked up, the corn crops came in, demand lowered (both from the ethanol and people driving less) and the Saudis were left with a seriously lowered demand for their nasty ol' oil. [u']Gas prices were only up a month at the most, when the sank like a stone. But with the bailout, food prices have been sluggish to respond to the lowered transportation expenses, and are still feeling the effects of last years lowered corn supplies--which affects corn products as well as beef and dairy, and eventually effects many other products that use corn as an ingredient--like high fructose corn syrup. Also as supplies of corn oil diminished, demand for other oils increased, which means those prices went up, along with everything they were ingredients in. It will take a while for the effects of the ethanol push to be balanced out since retailer are often slow in allowing prices to reflect costs when those costs are going down.

Wrong, gas prices have been up much longer than a month. Try about 2 years.

[Danny Carlton]

Wrong, gas prices have been up much longer than a month. Try about 2 years.

All prices creep up due to the permanent inflation that's part of the Keynesian economics policies the government enforces. Within that 3% creep, though, there's some fluctuation. Gas prices always go up during the summer, and go especially high during presidential election years.