Venango County Tea Party Patriots

A non-partisan, non-profit, non-member, association dedicated to educating the public and promoting the principles of fiscal responsibility, constitutionally limited government and free market economics, and all other lawful activities.

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Falling Gas Prices are Silver Lining

From the Oil City Derrick:

Gasoline prices are silver lining as economy weakens

By SANDY SHORE
AP Business Writer
There’s some good news behind the discouraging headlines on the economy: Gas is getting cheaper. At least two states had stations selling gas for $2.99 on Friday and it could fall below $3 in more areas over the weekend.A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the U.S. since early April. The national average is now $3.61. Experts predict further declines in the next few weeks.If Americans spend less filling their tanks, they’ll have more money for discretionary purchases. The downside? Lower oil and gas prices are symptoms of weakening economic conditions in the U.S. and around the globe.

On Friday, oil plunged nearly 4 percent as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. The unemployment rate rose to 8.2 percent from 8.1 percent. Sobering economic news from China and Europe also contributed to the drop.

West Texas Intermediate, the benchmark for oil in the U.S, fell $3.30, or 3.7 percent, to $83.23 per barrel, the lowest price since early October. The drop adds to a 17 percent decline in May. Brent crude, which is used to price international oil, lost $3.44, or 3.4 percent, to $98.43 per barrel, its lowest price since January 2011.

U.S. drivers should feel some relief, even if they’re worried about jobs. Auto club AAA says pump prices fell nearly 5 percent in May, the largest monthly percentage drop since November. Some station owners in South Carolina on Friday even presented drivers with a gift at the start of summer driving season: $2.99 gas.

Dan Durbin, president of R.L. Jordan Oil Co., says low wholesale prices allowed at least seven of the company’s Hot Spot stations in Spartanburg, S.C., to lower the price to $2.99 per gallon. South Carolina also has the lowest gas tax in the nation.

Durbin predicted that more of his stations and some competitors will lower prices once they sell off higher-priced supplies currently in their tanks.

Gas also fell below $3 in Harrisonburg, Va. It could hit $2.99 or lower in Georgia, Missouri and Oklahoma perhaps as soon as this weekend, according to Tom Kloza, chief oil analyst at Oil Price Information Service.

Gas hasn’t been below $3 per gallon anywhere in at least two months.

Analyst Patrick DeHaan of the website GasBuddy.com expects prices to fall below $3 a gallon soon in Tennessee, Alabama, Mississippi, which benefit from proximity to refining hubs.

Kloza predicts that motorists will pay an average of about $3.50 per gallon or lower by Father’s Day. And drivers on the West Coast should see even bigger declines than other parts of the country. Their prices had been rising because of a gas shortage.

Gas prices should stabilize in July and August, Kloza says.

It’s still questionable how much lower gas prices will boost consumer confidence.

Phil Flynn, an analyst for The Price Futures Group, believes falling gas prices could give consumers a psychological boost. But that could evaporate if hiring doesn’t pick up and stock markets keep swooning.

“If you don’t have a job, it doesn’t matter if gasoline prices are $5 or $2 a gallon,” he said.

Those who can afford a new car payment will appreciate falling gas prices. Automakers reported selling 1.3 million cars and trucks in May. Auto sales remain a bright spot in the U.S. economy. Still, those sales won’t reverse a decline in gas demand in the U.S. because the new models are more fuel efficient than older ones heading to the scrap heap.

Energy futures fell across the board, as did global stock markets. Heating oil fell 7.53 cents to $2.628 per gallon, gasoline futures fell 6.59 cents to $2.657 per gallon and natural gas dropped 9.6 cents to $2.326 per 1,000 cubic feet. U.S. stock markets dropped more than 2 percent and are now lower for the year.

 

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Is There a Solution to Our Economic Problems?

For those waiting for our economic problems to be solved, you can quit holding your breath.  There is simply not going to be a solution to our economic problems on the national level.  So why is that the case?  Well, it is because the economic policies of both major political parties are very, very similar when you take a close look at them.  Yes, that statement may sound downright bizarre to many Americans, but it is true.  Both major political parties supported the Wall Street bailouts, both of them fully support the job-killing “free trade” globalization agenda, both of them have dramatically increased the national debt when in power, both of them fully support the currency-killing policies of the Federal Reserve, and neither major political party would get rid of the income tax and the IRS.  And that is just for starters.

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Facts on Buffett Rule

The facts of the Buffett Rule are simple. The President wants millionaires (and small businesses taxed as individuals) to pay a minimum tax of 30 percent. For all of his rhetoric that the measure would “stabilize our debt and deficits for the next decade,” the Buffett Rule would bring in only $47 billion in revenue in ten years. To put those numbers in context, President Obama’s budget calls for adding $6.7 trillion to the national debt. So the Buffett Rule would cover just 0.7% of all of Obama’s debt and .1% of Obama’s spending.

None of this even touches on the failure in logic underlying the President’s argument, as we detailed in depth last week. In short, President Obama is employing the Buffett Rule as an election-year class warfare weapon. And he’s aiming it at the highest-earning families and businesses in America who are already shouldering the vast majority of the country’s tax burden. Just one example: The top 1 percent of income earners — those earning more than $380,000 in 2008 — paid more than 38 percent of all federal income taxes while earning 20 percent of all income.

What’s more, the whole idea of the Buffett Rule is based on a fallacy. The President says his tax is necessary because people like billionaire Warren Buffett’s secretary pay a higher tax rate than the wealthiest Americans. In reality, Warren Buffett pays over 50 percent tax on his income. He earns much of his income as capital gains and dividends from stock he owns in businesses — he pays a 15 percent tax on this income, but first, the businesses that generate this income pay a 35 percent corporate income tax. Corporate income is subject to at least two layers of tax. To create an artificial political fight, Obama and Buffett conveniently ignore the first.

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