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.