The lower-gas-price-tax-cut is "unequivocally good" meme is becoming more and more full of holes by the day. All that extra disposable income means moar iPhones, moar dining-out, and moar GDP... right? Wrong! As CBS reports, [3] a new poll finds 73% of Americans will not use any extra cash from lower gas prices to buy additional gifts. What is even worse for America's credit-growth-dependent economy - 69% of Americans will use this extra disposable income to pay down outstanding bills and expenses. The final nail in the coffin of exuberance, two-thirds of Americans say they see no benefits from lower gas prices. But apart from that... keep the narrative going...
While "common knowledge" is that lower gas prices must be good for everyone, as CBS reports [3], this is not the windfall of disposable income-driven GDP-boosting exuberance so many extrapolating Keynesian economists are hoping for...
Despite a recent drop in the price of gas, 45 percent of Americans still think the price is too high. Thirty-nine percent of Americans think gas prices will go up, while 40 percent think they will go down.
[4]
Sixty-three percent of Americans say lower gas prices have not had any effect on their financial situation, but for a third, the price drop has been beneficial.
[5]
Majorities say they will use any savings from lower gas prices to pay bills or save; fewer will pay off credit cards, do home repairs, spend more on holiday gifts, or travel more.
[6]
Americans are now more skeptical that the president can have an impact on the price of gas. Most Americans - 53 percent - think the price of gas is beyond the control of the president.
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So of course - these facts about American consumers do not compute with how the textbooks say it should all work... but we should ignore reality and believe in hope for now.
