Draining the Economy? (High Energy Prices)

http://abcnews.go.com/sections/Business/US/Gas_prices_040309-1.html

Consumers and airlines may be feeling the impact of higher oil and gasoline prices right now. But a number of economists believe going forward that higher energy prices will have a slowing effect on economic growth overall.

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Kathy Bostjancic, senior economist for Merrill Lynch, says the higher gasoline prices act as a "tax on consumers and corporations." Consumers pay more to fill their gas tanks and heat their homes, explains Bostjancic, and this "diminishes their disposable income."

Merrill Lynch estimates that every penny increase at the pump is equal to $1 billion in lost consumer spending. Using that equation, the 20-cent-a-gallon increase at the pump this year is taking $20 billion in spending out of the economy.

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Another way to think about it? Merrill Lynch estimates federal tax refunds this year would total about $55 billion from February through May. That would be about 30 percent higher than last year and would, theoretically, give the economy another boost similar to the one it got last summer from child tax credit checks.

But Bostjancic says Merrill Lynch believes the higher pump prices will wipe out as much as a third to half of the economic impact of federal refunds.

However, *'s "re-selection" chances are about 5/4!

there's no denying it, nor hiding it. Its here to stay.

explain the 1.00 per gallon difference between California and Florida.

n/t

I almost feel guilty. But I think we pay too little for gas in the US. We must pay too little, every other vehicle sold nowadays is an SUV. I cringe when I imagine what the rest of the world thinks about us, driving our big macho trucks, sucking the rest of the petroleum out of the ground, going to war to protect this privilege of ours.

Which require fuel to be cleaner with less environmental damage. Hell, some parts of California have more expensive gas than we do here in Hawaii.

the word "Inflation" was used a few times.

Hopefully come November, Chimpy will be inflated and float away.

The economy is getting stronger by the day.