I have enjoyed the falling gas prices of recent as have some retailers I have been doing commerce with, much to the chagrin of Wall Street and the investors. More on Wall Street and the investors later. But for now.
Good news with the falling gas prices I now find myself with more disposable income. This is how this works for me. First I have had no significant pay raises in quite some time, therefore even though I have a job I live on a fixed income. My pay is split into the following. First I cover the basic necessities food, clothing and shelter. Second are the utilities. Third is gas costs to get my butt to work, figured by actual miles driven and fuel mileage. Fourth is to save 10% of what is left. Why 10% you ask, because I know and have known that even though I am required to pay into Social Security I will not get a monthly check, the money will run out. Fifth give to the Church. Sixth what ever is left is disposable, meaning it is spent in the local area in an attempt to keep the employed, employed. If what I want to buy is not available in the local area, then I must shop outside, either way someone has a job. Consequently the less the third costs me the more of number 6 I have, the more number three costs the less of number 6 I have.
More good news. The falling gas prices have allowed me to take the boat out more often. Going fishing more often has meant more trips to the bait store and the gas station. The owner of the bait store has had more business, selling shrimp. The owner of the gas station has been selling more gas. The owner of the shrimp boat has been going out more often and catching shrimp, if no one is fishing he can not sell his shrimp that are to small for restaurants. The fuel for the shrimp boat costs less, the shrimp he sells costs less, the owner of the bait store sells shrimp for less because they cost him less, I go fishing more often and buy more shrimp and gas. All of this is because fuel prices have come down. Yes, economics are this simple.
I understand supply and demand. If the supply is low and demand is high prices go up. If the supply is high and demand is low prices come down. I also understand that supply can be manipulated to effect price. I also understand this if production and transportation costs are low so are prices, and that the opposite is true.
Items 1, 4 and 5 are not negotiable and will be done. Item 2 fluctuates with the season. Item 3 is a must, if my butt does not get to work none of them happen. Item 6 is dependent on all before.
The only one that I have even the slightest control over is second, the utilities, but only to a certain extent. I can control how much electricity I use but I can not control the cost.
Bad news my power company will be raising the rates for electricity this month. My electric bill will be increasing thereby effecting my disposable income. New regulations from the feds.
More bad news, the new republican controlled congress is considering raising the gas tax. This too will affect my disposable income.
Even more bad news, for the owner of the gas station, I will be buying less gas. To the owner of the bait store, I will be stopping by less often for shrimp. To the owner of the shrimp boat, the owner of the bait store will be needing less shrimp. We all will likely be needing less fuel.
The federal government once again has it all backwards. In an attempt to take more from the American people, they will in all probability end up with less. The federal government should be finding a way to lessen the burden on business. Business will get people back to work not the federal government. If more people were working, more people would be going to work and buying gas to get there. Stop taking and use what you have already taken, but use it wisely. Tell America where all of the money in the Highway Trust Fund went. While you are at it tell America where all the money you took from us went. The only money you seem to have enough of is welfare money, never hear that it is used up, must not be many on welfare. Since there must be a surplus of welfare money use it to fill up the other accounts. Surely you have not done the opposite. Have you?
Now to Wall Street and the investors. Frankly, I do not give a rat’s butt about your worries and concerns about the falling gas prices. The only reason that Wall Street has been doing so good is that the feds have been pumping money into your stock market. Directly or Indirectly. With the feds holding the interest rate at or near zero the investments have been flowing to Wall Street. Where else is there to invest with any real possibility of a descent return? Do not worry yourself too much I am quite sure your friends in Congress will bail you out once again. Just for grins and giggles disclose how much money really is in the stock market. You are not driving the Economy. The only thing you are driving is America to the poor house with the aid of Congress, Politicians and the Fed.