Gridlock News

  The President and Congress were very happy to offer the $170 billion economic stimulus plan last week, but shortly after they started dismissing it as not enough. 

Today, Oil futures hit $100.10 on expectations that OPEC will suck up that entire economic stimulus in the form of higher oil prices. 

If prices had stayed in the high $88 range where they were when the Stimulus was taking shape, the US economy could have benefited more from the cash.  However, with a country that uses more than 20 million barrels of oil per day, the increase of $12.10 to the cost of each barrel of oil will cost the country over $88 billion dollars.

That price comes before the oil runs through the refineries at an inflated cost that also pushes up Oil company margins and profits and taxes too for that matter.  It also increases the cost of staple products such as milk (recently hitting $4 per gallon) and goods.  Not to mention all other non-essential items from automobiles to clothes to drugs and specialty items like a bath lift.  Everyone feels the price of higher oil.

At the end of the day it would appear that Americans just lost half of their economic stimulus package at the pump before anyone actually received a check!  They will rapidly loose the rest sometime before summer.  That will do little to stimulate the US economy.  It might not even do much to pay down credit card debt, the previous candidate to receive the majority of the stimulus package.

Bloomberg.com