Energy prices hurt US economy
Image via WikipediaThe American economy just can’t catch a break.The administration could have certainly softened the blow to the enconomy from rising oil prices if it had not been doing so much on its own to raise the prices of energy. It has been stubbornly determined to strangle domestic production of oil and gas in order to drive up prices, while at the same time wanting to raise the taxes on most domestic energy. In the process it has outsourced our energy supplies to mad men like Gaddafi and Hugo Chavez.
Last year, as things started looking up, the European debt crisis flustered the fragile recovery. Now, under similar economic circumstances, comes the turmoil in the Middle East.
Energy prices have surged in recent days, as a result of the political violence in Libya that has disrupted oil production there. Prices are also climbing because of fears the unrest may continue to spread to other oil-producing countries.
If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.
Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.
“We’ve gone beyond responding to the sort of brutal Technicolor of the crisis in Libya,” said Daniel H. Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “There’s also a strong element of fear of what’s next, and what’s next after next.”
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The Obama energy policy has been a basically anti energy policy. Now it is looking like another blowout.
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