Gas Prices in America May Cause an Economic Depression

Transportation is the backbone of what drives our economy. Without gasoline products, people would not be able to travel as efficiently and products would be harder to be delivered to their destinations. In the current market, crude oil prices are constantly rising. A few short years ago, consumers were seeing gas prices between one and two dollars per gallon. Today, consumers would be considered lucky to see anything below three.

There are many factors in why the gas prices are so high. These factors are the crude oil price, taxes, refining, and distribution. For one example, look at the production and delivery of gasoline itself. If someone was to thoroughly look at these four factors, one would eventually see a pattern of concern. As crude oil prices continue to rise, the cost of delivery would also rise, considering it takes gasoline to deliver gasoline. The ending result would be an upward trend in the cost of crude oil, taxes, and refining to cover the cost of delivery.

The delivery of gasoline to pumping stations across the United States and the rest of the world will not be the only thing affected. Everything boils back down to transportation. The cost of goods being delivered to convenience stores, retail outlets, shopping malls, restaurants, and any other type of business will have to increase in price to off-set the cost of product delivery. As a result, the consumer will pay even more to these businesses to off-set the cost of goods.

One key element in gasoline prices causing an economic depression is how wages remain constant. As the cost of goods to consumers continue to rise (indirectly from the cost of gas), a typical household would have more trouble finding the appropriate finances to purchase anything other than household necessities. As money becomes harder to obtain to those consumers, businesses will eventually lose money due to consumers not buying product, jobs will be cut to withstand the loss of cost of goods sold, and the value of stock within those businesses will fall because overall demand will deminish. As an end result, an economic recession or depression is inevitable.