Yes, gas/fuel prices may cause a depression if they go back up as they did in 2008. Very high fuel prices, the housing thing and consumer spending cutbacks created this recession we are now in. With a recession already in progress, if we're hit again by very high fuel prices in the near future, a depression will likely follow.
Let's face the facts, fuel prices caused a real hardship on many Americans and people around the world when prices climbed upward of where prices normally hovered. With the price of everything else following fuel prices upward, Americans by the millions were hit by an almost overnight economic hardship whether or not they were paying for an overly expensive home.
This hardship was very real for someone with limited money to spend on something as necessary as fuel and food. When a family or individual normally spent $100 dollars per month for gasoline and all of a sudden was hit by $400-500 per month fuel expenditures, grocery price increases, home heating and cooling cost increases, etc, their meager savings went out the window very quickly. They were left with running up credit card debt, drastically cutting back on other purchases and finally dumping things they could no longer pay for like an unpaid for home or car.
Sure the housing thing was a problem but not the only problem. Trucking companies and truck owner/operators went bankrupt and some even closed down because of fuel prices. Increased fuel surcharges had to be implemented or revised which pushed consumer goods prices up. Service providers, where extensive vehicle use was involved, had to increase prices where they could or face going bankrupt and/or closure.
Banks were hard hit by consumer cutbacks, defaulted credit cards, customer bankruptcy or defaulted loans of different types including home loans. Shaky banking practices only fueled the fire.
Think that auto manufacturer problems was created solely by banks not lending? Think again. Auto sales started declining because of very high fuel prices! Auto manufacturers like GM, Chrysler and Ford were already getting in trouble before the banks really stopped lending. All the other auto manufacturers, like Japanese auto manufacturers, are getting into trouble now that the recession is official and in full swing. Government bailouts will not help with consumers not buying!
The price of a barrel of oil declined to very low prices at the end of 2008 and the first part of 2009. Gas prices were low during Christmas but oil company shenanagans brought prices back up some in short order. OPEC cutbacks in production threaten to increase oil prices once more. I'm afraid speculators are just waiting in the wings too.
Our Government officials have largely stopped their talk of high fuel prices since the election. The only real talk is development of alternative fuels, higher car fuel mileages, etc. Things that'll take years to bring to fruition. A short term fix for higher fuel prices has went out the window along with the election and OPEC knows that.
The only thing that will hold fuel prices somewhat at bay is this recession, and reduction of prices may follow deeping of the recession. But, with all the greedy people out there, very high prices may be just around the corner. Another year of very high fuel prices coupled with this recession will almost certainly cause a depression.
A depression of similar or worse proportions to the Great Depression will be devastating to present day America because we are completely unprepared to make do with little for a prolonged time. Little vegetable gardens instead of large life sustaining gardens, gas and electric heat instead of fireplaces or wood burning heaters, little to no everyday livestock and other farm animals, higher population density, are but some of the reasons for the next depression to be very very bad.