Posted on 11/25/2013 4:29:01 AM PST by Kaslin
At the beginning of this year, many Americans opened their paychecks to find that their take-home pay was suddenly less than it had been the previous month. The payroll tax cut had expired, resulting in the average American worker owing an additional $700 in payroll taxes this year compared to last.
For a two-parent household, that’s $1,400 less with which to pay the bills, put food on the table, and fill up the gas tank. But it’s far from the only added expense straining family budgets. Oil prices, in particular, have skyrocketed over the past decade, imposing higher direct and indirect fuel costs on families during already tough economic times.
Just like the payroll tax increase, increased fuel costs in the form of high gasoline prices are eating up paychecks while providing no additional economic benefit or utility. In 2012, the average household spent a record $2,912 on gasoline. Compared to the 2002 average of $1,235, that is an extra $1,677 that families have been forced to spend on transportation costs. That’s money that could otherwise be saved or used to grow the economy, such as by starting a new business.
While American families are bearing a considerable brunt of the burden, high oil prices and oil dependence have negative economy-wide impacts. In 2012, Americans spent a record $900 billion on petroleum products, and a recent study found that high oil prices added $1.2 trillion to U.S. debt over the past decade. This economic drag is part of the reason our recovery from the Great Recession has been anemic and the unemployment rate remains high.
To be clear, it’s not America’s great oil companies causing this, as some of their anti-corporate, anti-capitalist detractors might want you to believe. The fact is that the price of a barrel of oil – whether that oil is pumped in North Dakota or Saudi Arabia – is determined by a global oil market that is affected by supply and demand factors around the world. Anything and everything – from economic growth in China to instability in a major producing region like the Middle East – can send prices higher. This geopolitical exposure of the global oil market to volatility explains why Americans are paying so much for gas despite record domestic production.
Moreover, America’s vulnerability to oil supply disruptions forces our brave men and women in uniform to bear the tremendous burden of protecting the global oil supply. And of course, high oil prices enrich major producers including the Organization of the Petroleum Exporting Counties (OPEC), a cartel whose members (many of which work to harm America, including by funding jihad) manipulate the market to make prices higher than a free market would dictate. It’s no coincidence that OPEC enjoyed record revenues last year, the same year Americans spent record levels on gasoline.
Effectively, the global oil market imposes a tax on American families and businesses whenever the price of oil goes up. And just as you can’t hide from the IRS, there is no real way to avoid this tax either – unless you stop using oil.
To be sure, oil is the lifeblood of the U.S. economy and will continue to be for the foreseeable future. However, new transportation options such as vehicles powered by natural gas and electricity are beginning to offer consumers the freedom to have their mobility powered by something other than oil.
A bipartisan group of Fortune 500 CEOs and former four-star military officers has a solution that will foster greater freedom for individuals with respect to the transportation sector. Their organization – Securing America’s Future Energy (SAFE), for which I am an adviser – has proposed opening up new federal lands for oil and gas exploration and utilizing a portion of the new revenue captured to bolster basic research and development of the new technologies America needs to break oil’s monopoly over our transportation sector.
The goal is to allow American families to opt-out of paying high oil prices without having to sacrifice their current vehicle performance or lifestyles. Rest assured: This concept for an Energy Security Trust Fund will not consist of Solyndra-style green energy cronyism that picks winners and losers.
No stone should be left unturned when it comes to improving our economy, protecting our security, and helping overtaxed American families keep more of their hard-earned money. New transportation technologies will delink our economy and security from the global oil market, helping offer relief from the high gas bills straining family budgets. It’s time to get serious about embracing these solutions.
Whether said employees are parents is irrelevant to the calculation.
Is this a new trend, to describe every worker as a "parent?" It reminds me of the way they now refer to every housing unit as a "home," instead of a house, townhouse, apartment, etc.
It’s really sloppy writing and the writers at Townhall.com are not immune to it.
Ken Blackwell, iirc, is in particularly desperate need of an editor. He has Word Salad Syndrome.
Hmmm ... welll ... perhaps because we ARE supporting a rebellious and incorrigible child (the gummint), that yes ... I guess we ARE parents
Time to take the brat out into the woodshed, cut off his allowance and get him to rake the leaves.
And teach him some manners ... we are yes sir and yes ma'am.
The author of this article is just not paying attention.
On the supply side —the US for the last three years has increased oil production by 1 million barrels a day annually. For at least the next two years oil production will increase by 1 million barrels @ day annually.
Many analysts believe that the USA will be a net exporter of oil by 2020.
On the demand side large numbers of trucks and busses are switching over to natural gas and fuel economy of gasoline driven cars increase. The two factors together are causing demand for gasoline to decline even as the economy expands.
The net result of declining demand and rising supply will be falling prices...its inevitable.
Out beyond 5 years is the electric car. Tesla is forcing the major car companies to invest heavily in electric cars. If Tesla can build a 30k electric car that can go at least 200 miles on a charge in 2016—then volumes on the electric car will ramp up sufficiently to eat into demand for oil.
Shell oil has put out a paper on the future of energy demand. Shell believes that the demand for oil will peak in 2030 and by 2040—the demand for oil will start to decline.
http://oilprice.com/Energy/Energy-General/Shells-Predictions-for-the-Future.html
Good one!
The real answer to undercutting world oil prices is natural gas. Much of the gas from shale deposits in this country have not been produced for various reasons one of which is the collection pipelines have not been built.
The state of WV is working on using natural gas for state vehicles. Tax credits. Ideally tax credits should be offered for both natural gas and multi-fuel vehicles including conversions of existing ones.
Why worry about the oil companies making a few buck when we have Government ordered health care coming along to bankrupt us.
Obamacare is going to kill business.
The problem is the devaluation of the dollar. Remember when grocery chains gave you a free turkey at Thanksgiving if you bought $10 worth of groceries....which paid for the entire holiday meal? That was in the ‘60s.
The Feral Reserve has so devalued our currency that a $.39 loaf of bread then, now costs $2.75. So naturally, the .29/gal. of gas is now going for $3.50/gal. Greedy Government conveniently doesn’t count food and fuel in its inflation numbers, but citizens still need to eat and drive to work, if they are fortunate enough to have a job.
And this is why the American Middle Class is sinking like a stone.
It is all about $ per (million) BTU. Yes, that archaic unit of measure.
Compared that way, oil is 6 times more expensive than natural gas. The shift to natural gas for fixed industrial and commercial consumption has already occured. Next is the vehicle shift to natural gas, whether compressed of liquid. This is ongoing. After that natural gas becomes a feedstock to produce diesel fuel.
Airplanes, marine shipping and rail will likely be the last to convert; if ever to a natural gas fuel. Plus many personal vehicles will stay oil based.
So Shell is correct, oil consumption will peak in our children’s lifetime.
Those are very good observations, but that was not my point.
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