The price of gasoline in the United States is headed for record highs, according to an article in Sun?day?s Wichita Eagle newspaper.
Until now, I think most people around here haven?t really changed driving habits much. We did for a while, but then kind of got used to it about a year ago when gas was north of $4 per gallon. We don?t like the higher prices but still manage to go just about everywhere we want to go.
We have a cheaper fuel alternative in natural gas, which is plentiful in the U.S. But that idea hasn?t gained much traction. It appears we would rather buy oil from people who don?t like us. Or tell Canada to send its oil to China.
Most everyone knows that expensive gas is not good for our economy. We all use it, and the trucks who bring goods to us also use it, or diesel, which is even higher-priced.
I did a little research on the Internet regarding gas prices. The cheapest gas I could find, at 12? per gallon, is in Venezuela. It is highly subsidized by the government, and when the government threatened to remove some of the subsidy recently, riots broke out. I, for one, wouldn?t want to live in a country headed by Hugo Chavez.
A good portion of the cost of gasoline in our country is the state and federal taxes levied on each gallon. The federal tax is 18.4 cents per gallon and the states vary from a low of .08 cents in Alaska to 49.6 cents in Connecticut. Kansas comes in at 25 cents per gallon, which is below the national average.
I found a map that shows where gas prices stand throughout the U.S. in case you are planning a trip. Looks to me as though you should drive around in Wyoming and forget about California and the northeastern states. To get a picture of gas prices go to gasbuddy.com/gb_ gastemperaturemap.aspx
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Interest rates are about as low as they have ever been in my lifetime, yet where is the widespread clamor for cheap money?
Oh, a few people can take advantage of this situation, but many are sitting on the sidelines because you still have to pay it back.
The cheap money makes it easier for our county to borrow to fund purchases?programs, tax holidays, etc.?for you name it with money we don?t have. Tell me what happens when the cost of money goes up, and it will.
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When I was borrowing money as a much younger man, the rates were usually in the 8 to 12 percent range. Now it is half of that and I don?t even want it. In fact, the rate was as high as 17 percent in the mid to late ?80s. Makes me shudder to think of it.
I bought a new car in the late ?60s for 1 percent per month, which sounded like a good deal then.
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We used to use the ?Rule of 72? to determine how long it would take for your money to double in value. If you were receiving 8 percent interest, it would take nine years to double your investment (72/8=9). These days it would take more than 100 years to double your savings if you are receiving around 0.7 percent interest.
This also explains why many senior citizens don?t have near the income they used to have based on the return they receive on their savings today. When savings rates were in the 12 to 15 percent range in the ?80s, life was pretty good for seniors.
Just trying to explain things.
If you wish to share your comments or ideas, my e-mail address is joel@hillsborofreepress.com.
