Aggregating all of those savings, a $1 drop in gasoline prices amounts to around $10.8 billion of supposed stimulus in the form of consumers keeping more of their own money. That’s $1 multiplied by an average of 360 million gallons per day, times 30 days in an average month. Now, $10.8 billion per month is a pretty big number, but it is nowhere near the $85 billion per month that the Fed was pumping into the banking system during QE3, for example.
Still, $10.8 billion per month ought to do something for stimulus, right? Yes, of course, but that is unless it gets eaten by monsters. Mwahh, hah hah!! The Robert Wood Johnson Foundation (RWJF) estimates that the average price of healthcare premia will rise by 12.56% in 2016, a figure way above the estimate of 5.8% per year as modeled by the Centers for Medicare and Medicaid Services for the 2014 to 2024 period.
The National Conference of State Legislatures estimates a US-wide cost for a “Silver” plan medical insurance for a 40-year-old non-smoker at $314 for 2015. So if we apply a 12.56% growth rate from RWJF, that amounts to a jump to $353, or $39/month. That pretty well eats up the $1.11 per day savings on gasoline.
Ergo, the stimulus of lower gasoline prices has been eaten by monsters.
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