Will Rising Food & Gas Prices Curb Demand?

By iamned - Last updated: Sunday, May 10, 2009 - Save & Share - 5 Comments

The answer is no, because food and gas are examples of inelastic goods; as the price rises demand is largely unchanged. That’s why no matter how much the boo hoo hoo liberals and Ron Paul knuckle draggers complain about ‘pain at the pump’ and rising food prices it has no effect on consumption. People will keep maxing out their credit cards on food and gas, even if gas retests four dollars a gallon within eighteen months (which it will). The graph below illustrates how miles driven (blue) dips only slighly as gas prices surge.

rrr

Unlike Germany or France the United States isn’t a nanny state thanks to welfare reform. People need to get to work, and have no choice but to spend $4 a gallon on gas, which explains its inelasticity. No gas = no commute = lose job = homeless. We need to learn to embrace rising gas and food prices instead of complaining.

For inquiring minds here’s some solutions solutions to your food and gas woes: Get a better paying job. Robert Kiyosaki says you can choose to be rich, which is great advice because being rich is better than being poor. Or use more credit card debt. Or consider shopping (and I know this may sound unappetizing) at PetCo for Gourmet Fancy Feast wet cat food. Cat food is high in protein and very cheap. If you want to be creative get tortillas and turn it into a cat chow taco. A case of 24 3-OZ cans of Fancy Feast costs only $15.

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5 Responses to “Will Rising Food & Gas Prices Curb Demand?”

Comment from Kevin
Time May 11, 2009 at 4:09 am

Go Costco!

Comment from Ali
Time May 12, 2009 at 6:54 am

Yet another piece of astonishing stupidity from this website. Rising food and gas prices do not curb demand for food and gas. They curb demand for laptops, LCD displays, and automobiles because consumers have less cash to splurge with. Those good ARE elastic.

Comment from Jeff
Time May 12, 2009 at 8:14 pm

Good lord. This guy is a complete idiot. “For inquiring minds here’s some solutions solutions to your food and gas woes: Get a better paying job.”

Telling that to the millions of unskilled laborors would get you killed. Its ignorant to think people can just get up and find higher paying jobs when the economy is in the dump and people from “high paying jobs” are being laid off all over the country. Cetin/Ned you are a dumbass.

Comment from WTF
Time May 14, 2009 at 1:40 pm

LOL

Comment from stats79
Time May 17, 2009 at 7:00 pm

Who the hell is this guy and how did he get to be so stupid? I mean you can’t just fall off the turnip truck and be this stupid. You got to work real hard at it. Ned, if stupid is your goal, you can rest on your laurels now.

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