Today, I've been reading about our crumbling economy, and how Bush and the Fed hope to step in with an economic stimulus plan to curb a recession that now appears imminent. I read a very interesting article that I can't find right now, but I'll break it down. This article had a talk with an economist who said that one of the reasons why consumer spending originally sustained during the price spike in gas was because consumers thought it was fleeting, that it'd be a temporary thing. But as months (and years) have progressed, the price has only gone up. So seeing that it's here to stay, more consumers are tightening their pocketbooks.
The rise in gas prices, combined with the inflation in everything as a result, is like a 150 billion dollar tax increase, according to this economist. In that event, no economic stimulus package is going to help, it'll be a band-aid. Just a case of "too little, too late."