With gas going up $.10 a gallon almost overnight in many places, I felt this diary from
BOR was of interest not only to those in Texas.
The author of this piece is Robert Ricketts Ph.D., he holds an endowed chair in taxation at Texas Tech University and is running for U.S. Congress in the 19th dist. of Texas.
With crude oil closing at $75 dollars a barrel, it is time that Americans are given an honest look at how the benign deficits that our current Congress continues to propose are truly affecting their pocket books.
Last month, our Congress raised the national debt ceiling tonine trillion dollars. The White House deputy budget director predicts a budget deficit this year of over $400 billion. They tell us not to worry, that deficits don't matter. The theory seems to be that if they repeat something often enough, we'll believe it, no matter how nonsensical it is.
The truth is that deficits do matter. Continuous deficits are a sign of fiscal irresponsibility. Five years of record-setting deficits, like the ones we've had since 2001, represent recklessness on a scale not seen before in this country. We are already suffering the consequences of this reckless irresponsibility, and things are going to get worse if we do not change course soon.<
What are the consequences of the past five years of fiscal irresponsibility? The value of the dollar has fallen by over 30% since May of 2001. When our money is worth less, we pay more for everything from real estate to oil. For example, in May of 2001, a barrel of oil sold for about 28 dollars, or about 33 euros. Today, that same barrel of oil sells for over 70 dollars, and just over 56 euros. This means that while Americans are paying 150% more for a barrel of oil today than they were five years ago, Europeans are only paying 70% more for that same barrel.
That's right; the price of oil has risen over twice as fast for us as it has for Europeans. This difference is the result of the falling value of the dollar - if the dollar had retained its value vs. the Euro, the price of oil, currently about $72 per barrel, would be about $50 per barrel.
Put another way, about 50% of the increase in the price we pay for oil is directly attributable to the sliding value of the dollar. Every time we fill our car at the gas pump, every time a trucker hauls a load of goods across the country, every time a farmer turns on an irrigation pump, and every time we book an airline reservation, we are paying more because our Congress has decided that fiscal responsibility is not important.
Please help Robert in his fight for Sensible Government.