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Wednesday, August 30, 2006

Bad News for Democrats

The USA Today has an article today that should send shivers down the backs of democrats who are just certain that they will regain either the House or the Senate, or maybe both, this November.

According to the article, "Gasoline prices are falling fast and could keep dropping for months."

"The only place they have to go is down," says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). "We'll be closer to $2 than $3 come Thanksgiving."
If that happens, the only thing that democrats have been able to point to as they have continued to perpetuate the myth of a bad economy will no longer be a problem for Americans.

Not only will Americans be feeling better about gasoline prices, but the lower prices will themselves help to further stimulate the rest of the already strong economy.

It's good news for consumers and the economy. Continued lower prices "may act like a tax cut" and stimulate spending, says Richard DeKaser, chief economist at National City in Cleveland. He calculates that higher energy prices the first six months cut growth of consumer spending 1 percentage point.
Now, before leftists start shouting, "Of course gasoline prices are gonna go down right before the elections; Bush is gonna lower the prices so that republicans can get elected," pay attention to the reasons the prices are going down.

The end of summer. Driving slows, reducing demand for gasoline. And federal requirements for clean air, summer-blend gasoline end next month, making gasoline cheaper to refine and import.

Sluggish demand. Gasoline use in the first eight months of the year is up 1% vs. a year ago, less than the 1.5% to 2% growth that's typical, says Michael Morris, analyst at the U.S. Energy Information Administration. "Wholesalers are trying to get rid of product. The growth in demand for gasoline has really tapered off," he says.

Wholesale prices are falling faster than retail gasoline prices, meaning stations are making more money than when prices were $3. Wholesale prices Tuesday ranged from $1.77 to $1.79 a gallon, well below the $2-plus prices typical until recently.

Petroleum traders, worried that prices are too high to last, are selling their holdings. That pushes prices down. They also believe hurricanes won't disrupt Gulf of Mexico production, OPIS senior analyst Tom Kloza says.

Crude oil, which accounts for roughly half the price of gasoline, ended New York trading Tuesday down 90 cents, at $69.71 a barrel. That's the first time it's closed at less than $70 since May 4.

Notice that there is nothing there about George Bush sitting in the Oval Office waving a magic wand and lowering gasoline prices for the election.

President Bush cannot lower the price of gasoline any more than he had the power to cause it to rise in the first place. But the price is coming down, and that's bad news for Democrats.

4 Comments:

Blogger SkyePuppy said...

There's nothing the Democrats hate more than happy people...

4:21 PM  
Blogger Bryan Alexander said...

Good point. Funny, but true.

8:14 AM  
Anonymous Anonymous said...

The only reason Gasoline prices are falling. Is becouse it is getting close to election time. Mark my words, if republicans control the house again, The prices of oil will rise again. Its all politics. Lower taxes is not what stimulates the economy, You need to do your research on his so called tax cut. A millionair will recieve almost 200,000 a year as a tax break. An avarage person that makes around 20,000 to 30,000 a year will recieve a whoppin $3.00 to $5.00 in tax relief. What the hell am i gonna buy with that. The fact is when american companies Shut down becouse some idiot take the cap off of imported goods, This cause's american companies to leave the country or fold and allow imported companies to come an hire employee's at a cheaper wage than americans are used to making. Forcing americans to shop at place like wallmart becouse they can no longer afford to buy good american made products, Which in turn hurts all american companies. What country are we suppossed to support. United States, China, Japan, Hong Kong. Explain this to me. I am having a hard time understanding how buying imports is stimulating the economy, when it is driving peoples wages right into the ground. One other thing. Mexicans are now taking the lower wage jobs, So when all the good paying jobs are gone. What will we have. Well ill tell you what we will have. We will have Corporate America. We will have Rich and we will have Poor. No Products will be made in the USA. And the Mexicans will have all the low paying Jobs. Sounds like a good way to stimulate the economy? Remember 1 thing. The middle class is the economy, If we cant afford to buy anything, the economy suffers. I guess maybe there are not enough true americans any more that believe buy american build american.

5:35 PM  
Blogger Bryan Alexander said...

Anonymous,

First, thanks for visiting and for leaving a comment.

Second, I hope you don't actually believe that a bunch of politicians sitting in Washington are controlling the price of oil. I know there are people who believe that, but the fact is that oil prices are controlled by the world markets. These markets are influenced by many factors; however, politicians (democrat or republican) raising or lowering prices based on what is politically expedient at the time is not one of those factors.

As for taxes, Democrats love to complain about "tax cuts for the rich." The fact is that everybody, rich and poor got a tax cut, and generally speaking, the poorer you are, the higher percentage cut you received. For example, a person making $500,000 per year paid 39.1% of his income in federal taxes in 2001. In 2006 he will pay 35%. That's a 4.1% cut. A person making $70,000 paid 30.5% in 2001 and will pay 25% in 2006. That's a 5.5% cut. Someone making $30,000 went from 27.5% in 2001 to 15% in 2006, a cut of 12.5%.

You're right in saying the rich got a bigger cut if by that you mean a raw dollar amount. Just using the above examples, 4.1% of $500,000 is $20,500. 12.5% of 30,000 is $3,750.

So instead of giving "the rich" a smaller percentage tax cut, many democrats say that the rich should get no tax cut at all. Now that might make you and I feel better because we stuck it to "the rich," but other than us feeling better, what good would it do?

Remember, it's the rich who create jobs for the rest of us. People making $30,000 do not employ other people; people making $1 million do. People making $1 million invest in the economy. The result is that everyone, poor and rich alike, make more money than they were making before. These people then spend more money, federal revenue actually increases, and the economy grows.

Lower taxes do stimulate the economy and have every time they've been enacted.

But don't take my word for it. Look at the numbers. The American economy is growing right now at a record pace and has been for the past three years.

The Treasury saw a 14.6 percent increase in federal revenues in 2005 over those in 2004. In the 1980's, under the Reagan tax cuts, revenues nearly doubled.

So you can continue to listen to democrat talking points on the economy or you can look at the actual facts. Either way, you're welcome to visit Right Thinking any time.

12:17 PM  

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