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1 of 5A gallon of gas went for $1.58 at this gas station on Jan. 15, 2015 in Nevada, Mo.Barrett Emke for TIME -
2 of 5A pump at the Pilot Travel Center on East Austin Road in Nevada, Mo. on Jan. 10, 2015.Barrett Emke for TIME -
3 of 5Murphy USA gas station in Nevada, Mo., Jan. 10, 2015.Barrett Emke for TIME -
4 of 5Arnone's Car Care Center & Phillips 66 in Kansas City, Mo. on Jan. 16, 2015.Barrett Emke for TIME -
5 of 5Pilot Travel Center on East Austin Road in Nevada, Mo. on Jan. 15, 2015.Barrett Emke for TIME
At first look, the collapse in oil prices over the past year, from $107 per barrel in June to below $50 a barrel today, seems like the proverbial free lunch for American consumers. The decline in prices is the equivalent of a $125 billion tax cut. And it’s effectively a progressive one, since the biggest beneficiaries will be working- and middle-class people who spend a disproportionate amount of their income on gas for their cars and heating fuel for their homes. American households with oil heat could save $767 each this winter. That cash can now be spent on a new car—or a washing machine, an electronic gadget, clothes or a few dinners out.
That should boost spending, and …
Read the full story, which appears in the Feb. 2, 2015 issue of TIME, here.
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