The $22B per Month Bailout Not Reported
According to the EIA (Energy Information Association), the current gas consumption for the US in just over 9M barrels per day or 378M gallons per day. Over the recent weeks, gas has decreased in price in many areas by more than $2 per gallon. Some simple math tells you, US consumers are saving $22.6 Billion per month.
If we expand that to actual barrels of oil used per month:
US Petroleum used per day: 20,680,000 barrels/day
Of that, the US imports 58% or 12,036,000 barrels/day
Oil now bounces between $55-$65 today which is well below the high that was just over $140. Now we can’t take the top or bottom, so lets say the difference is between $130 and $60 for a savings of $70 per barrel. Each day the US saves $840,000,000 or $25.2 Billion per month on foreign oil.
As long as oil prices remain low, consumers save more than $22B per month and the US spends $25B less to the middle east. The impact is even greater when you factor in the US oil production savings to consumers.
Point is, we can not jump to quick to issue billions in bailout funds when natural market forces can work their magic. The problem with the bailout funds is that they reward irresponsible behavior, whether it is the over extended consumer, the auto manufacture that makes a product people don’t want, or the investment banks who take unnecessary risks.
Right now we have every lobbyist group standing in line for some share of government money. We have the US Chamber of Commerce urging Obama to approve a $150B stimulus package when he gets in office . The FDIC wants another $24B to help additional foreclosures. Nancy Pelosi wants $25B for the Auto industry from the $700B package. Now businesses led by Goldman Sachs, Time Warner, and Wachovia Corp want $300B stimulus package from Obama.
The most frustrating part is that the main media networks lead the decrease in oil as plunging on lower demand and it is extremely hard to find a story that implies this is good for the US consumer.
The Labor Department reported Tuesday that wholesale energy prices dropped by 12.8 percent in October, the biggest one-month fall since 1986. All types of fuel declined, with gasoline falling by a record 24.9 percent, surpassing the old mark set in 1986.
Home heating oil prices fell 9.6 percent, natural gas intended for home uses fell by 5.9 percent, and liquefied petroleum gas dropped by 27.6 percent, the biggest decline in more than three decades.
Analysts noted that this is the time of year when energy prices bottom out.
They mention all the prices falling, but nowhere in the story to they mention this as a stimulus to the economy and they keep the focus on the negative.
CNN for the same search yields similar stories. What would the headlines be if Washington said they will issue a $25B per month stimulus to consumers? Why can’t we here the stories about the family that could not afford to heat their house 6-months ago will now be warm this winter.