It’s a number no American thought they’d ever see at the pump again: Gas prices in Oklahoma City have fallen to $1.99 / gallon, a statistic that is symbolic of the cheaper gas prices nationwide.
Oddly enough, the runaway spiraling inflation that was the legacy of the Bush administration was often blamed on high gas prices raising the costs of shipping and hauling freight, hence retailers had to mark up their goods to keep up. But now that gas prices are literally half of what they were just a few years ago, shouldn’t the rest of the economy fall back in step?
At least one FOX News anchor, Phil Flynn, has been driven to inquire whether or not we should be happy about falling oil prices. A runaway deflation in gas prices could also lead to a minor recession, where consumers wait out on buying goods because they expect prices to fall. A deflationary spiral, while it sounds good on paper, can be devastating to an economy’s stability.
Tom Rothman says one thing is certain for now: A drop in gas prices for December means a healthier holiday shopping season, since consumers will gladly spend the money they saved at the gas pump in the mall instead. But come next year, it may be time to pay the proverbial piper.