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   Friday, April 15, 2005  
Permalink Hello. Do you feel a recession coming on?

I remember ten years ago, when petrol was about $1.20 a gallon, and there was some talk about Democrats wanting to put on a 25 cent tax. I remember thinking it might be a good idea. That money could have done a lot. Maybe we could have rebuilt the aging electric grid around the nation. When will that happen?? Maybe we could have done more to educate a lot more children and send adults to college or retraining. Back in those days, we couldn't get enough foreigners to come in on a H1 visa to fill the jobs Americans were not qualified to do.

Conservative Backlash
Of course, any talk of raising taxes will have the Republicans and the extreme right wingers (their poodles) grumbling at how irresponcible that would be. It would cause a recession, they claimed, because upping the price on fuel would eventually cause inflation. The theory goes like this: produce and other consumer items need to be trucked in, and if fuel prices go up, so will our cost of living. I thought it was a load of bunk, and so far, under George W. Bush, I have been proven right. For a long time now, petrol prices have been at $2.00 nationwide, and a lot higher here in California.

Everything has a breaking point
But in the back of my mind, I felt their reasoning made sense. Sure, when petrol goes up, so will the price of everything else. The problem was, Republicans thought it would happen immediately. Democrats thought the ceiling was higher, and that there was a cushion effect. And even if it did happen, the Democrat reasoned the benefits would outweight the bad. I agreed with the later. I felt that Americans wouldn't mind paying a bit more for petrol and so far I was proven right. What did they do when gasolene shot above $1.60? They bought up gas guzzling SUV's like crazy!

Well, today I am wondering if we are reaching that ceiling the conservatives once spoke about. The price is now over $3.00 a gallon in San Francisco. Farmers are close to going bankrupt, with many fearing this could be their last year in business. There is talk in the news of a possible recession if things stay the way it is. Ironically, it wasn't the Democrats to blame. It is all the doing of a mad President's over zealous spending policy, and the benefit of his spending is not the America people, but the Iraqi people. There is no stopping to the madness. Bush wants to keep the spending going. He has all the motive in the world to keep spending more on Iraq. No one likes to be proven wrong, and he aims to get at least something done right.

To bad we all have to suffer for someone's fragile ego.

posted: by veggiedude: 4/15/2005 06:44:00 PM  

2 Comments on: "Hello. Do you feel a recession coming on?"

Posted by: Joel Gaines on
5:28 PM  

I don't see a recession coming on. Fuel prices are not going to create a recession. Time and again, we have seen fuel prices go up and no lessening of demand.

Fuel prices are a simple matter of supply and demand - but globally. China has quadrupled its demand for fuel over the past few years as more people are able to afford a car there (thanks to capitalism). The US is finally paying prices for fuel that people in Europe and Japan have been paying for years (I know - I lived in both).

As with any commodity, the more people want it - the more it costs. They don't call it black gold for nothing :)

Take care!

JG


Posted by: veggiedude on
5:01 PM  

The reason fuel costs more abroad is because it is heavily taxed. I wish it was over here. The government in those countries use the taxes to fix the infrastructure of the nation, so people see a result of the tax. Over here, we are 'taxed' by corporations who put the money into their personal bank accounts. That is the difference. Latest news is that inflation was quite high last month and seems to be on the upswing.

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