from December 2011, Economics
Throughout the history of mankind, we've always had the rich, and we've always had the poor. What makes America different, what makes her special, is we have a third economic tier called the "middle class". Only liberty and capitalism give you this middle class. No other system of economics (capitalism) & government (representative republic) combine to do so. This combination creates this robust middle tier and allows all to move upward based on individual effort and drive. This system promotes innovation and betterment for all.
And this is exactly why we must stay true to the founders of our country and not follow the ways of our current president who sells us utopia but whose policies are moving us back to the world of a few rich, many poor and none in-between.
The chart above describes average annual gasoline prices in the U.S. for the past 90 years. The black line tracks the nominal or actual gas price (the price at the pump) while the red line translates the price into 2011 dollars. There are a couple of items to note:
- For the second time since 1918, we are now paying as much in real dollars for gasoline (the first being the oil crisis in the mid-70's). Think of that. Commodity prices are supposed to go down when there is vastly more supply of that commodity. Moreover, beyond our ability to produce significantly more gasoline, we are even better at distributing it than compared to 1918, and yet we are paying the same real price as 90 years ago.
- Notice the steep climb in pricing from 1996 to today. In just 15 years gasoline has increased 233%! If we do a little math we can quickly see the average driver who travels 15,000 miles in a year and whose car gets an average of 22 miles per gallon now pays around $1,350 more to drive their car than they did in 1996! If you want to know why a dollar doesn't buy much anymore, look no further than your gas tank.
Imagine if we could return to $1.50/gallon gasoline. If you are a two-car family that's, on average, $2,700 in your pocket — each year.