UNDATED (WKZO) - As gas prices inch their way toward four-dollars a gallon. One expert says the increase could put a huge crimp in Michigan’s economic turnaround plans. It’s a fairly simple equation—gas prices go up, state residents spend less, the economy suffers.
Former state treasurer Doug Roberts says higher gas prices likely means people won’t go out to dinner as often, travel as much or make major purchases like automobiles. He says this could start to affect the state economy just as businesses are starting to turn things around.
On Monday, Triple-A Michigan reported the average price for a gallon of regular unleaded was $3.45, the highest level since October 2008. Prices are expected to climb even higher as tensions in the Middle East and Africa drive up the price of crude oil.
In prepared testimony to the Senate Banking Committee Tuesday, Federal Reserve Chairman Ben Bernanke echoed Roberts’ opinion and warned that a prolonged rise in oil prices could pose a danger to the U-S economy. He added that if oil prices increase a temporary and modest increase in consumer prices could ensue, but not runaway inflation.