Gallon of Gas

In the summer of 2008, it is foremost on everybody’s mind. According to Myron Gushlak, a Canadian investment banker, people may be over-reacting to the price of gas in the United States. If we assume, for the sake of argument, that gas cost $1 a gallon in 1975, it may surprise you to know that it costs about the same today in actual spending power taking into consideration the cost of living increases over the past thirty-three years.  If you use the “value consumer bundle” which is the average expenditure of consumer units, (a number the federal government bandies about) a dollar in 1975 is equivalent to $4.58 today. This is a modest estimate. Myron further points out that if you use the federal government’s Gross Domestic Product (GDP) index per capita, a dollar in 1975 is equal to $6.04 today.  That number makes gasoline cheaper today than in ‘75 .

            Mr. Gushlak was not trying to minimize the impact of the meteoric rise in the past six months.  That impact is just now starting to trickle down through the economy. But a little perspective may serve as a sweetener in a very bitter cup of coffee.

            I’m sure you’ve seen those lists on the internet of the relative price of other liquids. A gallon of lowfat milk costs $3.79. A Gallon of Carlo Rossi Blush wine costs $5.65. Evian spring water $6.40. Budweiser beer $8.88. Red Bull energy drink, $30.69 a gallon. Gas doesn’t seem so outrageous by comparison, especially if you deduct local and federal taxes. Be grateful that if your car engine sputters, it does not need Robutussin DM to get it to move down the road. Robutussin comes in at $109.76 a gallon.