Rising gas prices hurt consumers, economy
Published 12:00 am Friday, May 14, 2004
Tribune editorial staff
As gasoline prices in the area near a record high of $2, consumers are beginning to panic.
However, the cost of fuel is not only a threat to our wallets, but it is also a threat to the economic well-being of the nation.
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As consumers spend more on gasoline, they have less money to spend on other products. When demand slows, so does production of goods. When the production of goods slows, workers are laid off.
Meanwhile, just about everything gets more expensive or else profits decline due to gasoline-dependent transportation one way or the other. In addition, travel and tourism dollars are lost because families simply cannot afford long drives for vacations.
It is plain to see that higher gasoline prices are going to cost consumers in all aspects of purchasing - not just at the pumps.
OPEC cutting back production is a major source of the problem, but experts have pointed to other issues that have lead to the dilemma.
The rising energy demand in the United States, China and other countries has not helped. New federal and state requirements for cleaner-burning fuels has lead to a rise in production costs. Disruptions in oil-producing nations such as Iraq, Venezuela and Nigeria has diminished the world supply.
More troubling long-term are the signs that the growing middle class in India and China are starting to buy cars. Nothing will push up gas prices like another billion cars on the world's highways.
As motorists, we will just have to be patient and hope this is just a passing phase. The Bush administration and Congress need to take a long, hard look at energy policies and see what can be done to corral this problem before it gets out of hand. They need to find a way to bring gasoline prices back down before it becomes a national concern in the form of an economic downturn.
The issue should be an interesting topic of debate in a presidential election year.