March 7, 2011 Leave a comment
Gas prices continue to rise. In two weeks the price of a gallon of gas has increased by 33 cents to $3.51/gallon. Some forecasters predict it could soon hit $3.75/gallon or even more. The American middle class is feeling the hit from this dramatic increase in gas prices. Since June of last year gas prices are up almost a dollar per gallon. This hits the middle class the most because we are the most sensitive to price changes and we rely the most on our cars.
Several years ago when oil prices skyrocketed President Bush eased supply issues by opening up the strategic oil reserve. This caused prices to decrease and stabilize, which was a great benefit for middle class consumers. What is President Obama doing to ease the hit on the middle class? He’s busy fighting a court order forcing the administration to issue new drilling permits in the Gulf of Mexico.
That’s right, during a major oil crisis the President is refusing to issue permits for more American supply. Rather than ease American dependence on foreign oil, the President is making us more reliant by refusing to allow more drilling. This administration hasn’t issued a new drilling permit in nearly a year and they’re fighting hard against a court order that orders the administration to issue new permits. Couple this with the administration’s continued refusal to allow new drilling in Alaska, South Dakota and elsewhere and the picture is pretty clear. The Obama administration is hostile to the middle class.
President Obama talks in fanciful, dreamy language about wind power and electric cars. All of this is complete nonsense. Wind energy isn’t cost effective and it’s unreliable. The nation isn’t going to be powered by wind. As for electric cars, the Chevy Volt, produced with millions in tax subsidies, is overpriced and inefficient. From all accounts sales are less than 1,000 so far. The Volt is the perfect example of why government subsidies don’t work because they don’t consider market forces. That of course doesn’t stop the Obama administration from hailing the Volt.
Gas prices are hitting hard in the pocketbook of the American middle class. For each dollar the price increases, US consumers spend $156 billion more on gas each year. This translates to $156 billion less spent on other consumer goods. It also translates into over $100 billion sent overseas because Obama and the Democrats refuse to allow drilling here in the United States. Price increases on gas don’t affect the rich and they affect the poor less because they tend not to depend on automobiles. But for the middle class, these price increases seriously affect our way of life. They seriously affect our individual freedom.
So what can government do to relieve the pressure on the middle class? First, government can get out of the way and allow drilling in the Gulf of Mexico, Alaska, South Dakota and elsewhere in the US. Government intervention in the oil market has caused prices to remain high, by allowing the free market to work prices will decrease. Second, the government can eliminate costly summer gasoline blends, which will cause the price of gas to rise 10-20 cents more come May. Third, governments can reduce taxes on gas, which would provide immediate relief at the pump. Here in Michigan we’re spending over 50 cents per gallon in tax between Federal and state gas taxes and state sales taxes. That represents 50 cents per gallon that could be spent on other consumer goods rather than government.
I of course don’t expect our socialist government to even consider proposals that will reduce the cost of gas. The Obama administration has no concern for the middle class and will no doubt continue fighting against new oil drilling. Because the administration is dominated by environmentalist leftists they won’t even consider eliminating wasteful and ineffective summer gasoline blends. As for taxes, if there is one thing government never eliminates its an excise tax. The end result here is that the middle class will continue to see our quality and way of life diminish while the Obama administration does nothing. On election day next year don’t ever forget that the Obama administration spent four years actively working against the middle class.