There's another, little discussed, ace in the hole here. Iraq is sitting atop 10% of the world's oil. Due to sanctions and the aged extraction technology, Iraq has been pumping about 30% of what it could be pumping. In a matter of weeks extraction will begin to increase exponentially, and increased export will begin.
The return of Iraqi crude to the world market will affect crude prices immediately and drastically, such that under a dollar per gallon gas is possible by the fall. A decrease of the magnitude I think we will experience will fuel inject world economies and literally turbo-charge the engine of the world's largest user of petroleum. For OPEC, already weakened by the Russians' refusal to play ball, Iraqi oil represents the final death blow to the cartel, further pressuring prices downward over the longer term.
These could be huge developments for the US economy going forward, possibly greater in impact than the tax cut, and we don't need Senate approval for this one.
These could be huge developments for the US economy going forward, possibly greater in impact than the tax cut, and we don't need Senate approval for this one.
You're absolutely correct. The economy always does well when the price of fuel goes down, and it does act as a tax cut of its own. This real effect of a gas price cut, added to the confidence-raising effect of having the war over (and the side benefit of a lower threat of terrorism), will help the economy a bunch. BTW, gas is already on its way down in price. I fill up at Sam's Club here in TX, and the member's price is down to $1.379 from a peak of $1.489 only a couple of weeks ago.