Thursday, October 20, 2011
According to Consumer Affairs:
The oil price spike of the past year, which saw gasoline prices increase by over $1 from the summer of 2010 to the summer of 2011, will drive household expenditures on gasoline to a record average of $2,900 this year, according to a study by the Consumer Federation of America (CFA).
Crude oil is about $30 higher than costs or historic trends justify, CFA found, generating needlessly high prices for petroleum products that will drain about $200 billion out of the economy.
This $200 billion drain is over one percent of gross domestic product and almost 2 percent of consumer spending.
“Since consumer spending is the main driver of the U.S. economy, when speculators, oil companies and OPEC rob consumers of that much spending power, the inevitable result is a dramatic reduction of economic activity and employment,” said Mark Cooper, CFA’s Research Director and author of the report.
A 2% reduction in consumer spending on goods and services translates into the loss of hundreds of thousands of jobs.
Read the rest of the article here.
Looking for a solution? The Open Fuel Standard would create millions of jobs in America. Read more: America's Economic Recovery.