US economy and a simple question
Quite frankly I'm tired of hearing that we aren't in a recession, but we may be headed towards one. I don't buy the old definition of two consecutive quarters of declining GDP. That just doesn't sit well with me.
I want to know this instead. For every US dollar I spend, how much of that stays in the US economy?
I fill up the tank on my Saturn Aura, costs about $36 these days or more depending. How much of that $36 stays here?
When I buy three 2 liters of Diet Mt. Dew for $3.63, how much of that stays here?
Is there a measurement for this? I don't know. If there is, I'd like to see it. I'd like even more to hear about it in the news if that's possible.
Comments
Alan on 19 Jan 01:03
I wholesale imported children’s outerwear. If a coat retails for $100 about $17 is left outside the US. So roughly 83% stays in America. Email me if you’d like an I can walk you through the math.
If I export a coat to Canada for $50 it’s the same 83%, but from a Canadian point of view only $50 of the $100 coat stays in Canada.
The point is if you buy an imported item from an American company the vast majority of the dollar stays in the US.
Corkynation.com
Scott on 19 Jan 01:19
Alan, thanks for that. It’s good to see how that works for imported goods.
I took a moment to look it up for filling up the Saturn and it seems to breakdown like this:
14% = Taxes 08% = Marketing and Distribution 28% = Refining 50% = Crude Oil
(source: http://auto.howstuffworks.com/gas-price1.htm)
That’s 100% and doesn’t take into account the markup at each gas station, but that markup on a per gallon basis seems to be really small. I guess that explains why there aren’t any pure gas stations left, they all have convenience stores.
Based on this I would conclude that > 50% of the cost of gas stays here in the US, for the most part. Obviously a large chunk of the crude oil comes from overseas but even some of those funds are distributed among US employees and investors.
Going with the example of buying three 2 liters of Diet Mt. Dew, I can be pretty certain that almost 100% of that money stays here in the US. Interestingly the bottles are made of plastic, an oil product, so on microeconomics scale it can’t be 100%. But the bottlers are usually local companies working on behalf of Pepsi, delivered by folks working locally, and sold at local shops.
This is a fun exercise.
Post a comment