How expensive is gas, actually?

Some interesting information from our friend Russ out on the left coast that I bet will surprise you:

■ “Most of what Americans spend their money on is made in China.” Not so.  Just 2.7 percent of personal consumption expenditures go to Chinese-made goods and services. 88.5 percent of consumer spending is on American-made goods and services.  According to The Bureau of Labor Statistics, Americans in 2010 spent 34 percent of their income on housing, 13 percent on food, 11 percent on insurance and pensions, 7 percent on health care, and 2 percent on education. Most of those services and goods are made in America. Only 7 percent of food is imported, according to the USDA.  The truth, surprising to many, is that real manufacturing output today is near an all-time high. What’s dropped precipitously in recent decades is manufacturing employment. Technology and automation has allowed American manufacturers to build more stuff with far fewer workers than in the past

■ “We owe most of our debt to China.” Another “ain’t so.” China owns 7.6 percent of U.S. government debt.The largest holder of (the $14.9 trillion) debt is the federal government itself. Various government trust funds like the Social Security trust fund own about $4.4 trillion worth of Treasury securities. The Federal Reserve owns another $1.6 trillion.  The rest of our debt is owned by state and local governments ($700 billion), private domestic investors ($3.1 trillion), and other non-Chinese foreign investors ($3.5 trillion) — mostly Japan and the United Kingdom.

■ “We get most of our oil from the Middle East.” Uh-uh. Just 9.8 percent of oil consumed in the U.S. comes from the Middle East. It is true that 51 percent of the oil we use is imported, but most comes from Canada and Mexico.

■ “Gasoline prices are outrageously expensive compared with what our parents and grandparents paid.” I researched this one myself. It is true that in 1918 gasoline sold for 25 cents a gallon and didn’t rise above 50 cents a gallon until 1974.  But adjusted for inflation, the 1918 price was the equivalent of $3.75 a gallon in 2011 dollars. The 1974 price was equivalent to a little over $2 a gallon.  In terms of 2011 dollars, gasoline has never been higher than that 1918 price. It has taken 94 years, and we are just now entering record territory.

The information is from http://inflationdata.com.