Will Rising Costs Keep Obama From Being Re-elected?
Al Ritter
The administration from the very beginning wanted energy costs to “necessarily skyrocket,” but the question is…..Will it keep the president from being re-elected? It is no coincidence that oil prices and food prices are not factors in figuring the federal Cost of Living index. Many things can be affected by a formal raise in the federal cost of living index, including social security payments, which the government wants to purposely keep low.
The recent monetization of the debt, (government buying up bond paper) that the federal bank never said would happen has contributed to the devaluation of the dollar. Each year the government prints more and more money, and if 2011 holds true to the pattern established by past administrations will approach $900 billion give or take $20 billion. To put that figure into perspective, the money printed in 2005 was only $380 billion. The treasury department prints so much money a day that they consume 18 TONS of ink daily! President Nixon started this inflationary practice when he was the commander in chief, by taking the gold reserve standard off the table, meaning that the government could only print as much money as they had gold to back it.
Now money is created from thin air, and the more that is made the less the overall production is worth. Keep in mind that the government prints money, they then hand it over to the 12 branches of the Federal Bank for distribution. Now also keep in mind that the Federal Bank is not part of our government, regardless of their name. They answer to no one, not even the President, and the only one that can even remove their power is congress, and they refuse to intervene. The fed decides who gets money and how much they get; basically they control our economy, not Timothy Geithner.
How can deflationary practices lead to inflation? View the economy like this; deflationary practices make our money worth less than it was last year. When we have to buy more as a country than we produce, it means we have to import materials. If we use the money that is now worth less than it was last year we will have to use more of it to acquire the same goods. Thusly we have inflation. Oil and food stuffs are the leading contributors to inflation, and correspondingly are NOT included in the cost of living indexes the government releases. A rise in food and oil prices affects everyone equally, and when that happens, it disproportionately affects the poor to a greater amount.
Keep this in mind as President Obama demonizes oil “price gougers.” According to the EIA, the oil companies made on the average 8.3% profit after taxes last year, that 8 cents on the dollar folks. For 8% they drill they refine, and they do research and development. Now let’s look at the REAL PRICE GOUGERS, the government taxes that gasoline at about 40 cents per gallon (depending on what state you live in), but the federal government tax alone represents 13.7% of each gallon. The government produces NOTHING other than money so don’t think for a minute that there is a cost for each gallon of fuel they tax on other than in the collection of that tax. 13.7% clear profit, for doing NOTHING! If the definition of “price gouger” is nothing more than making an exorbitant profit on the back of someone else, the administration has no farther to look then their own back yard!
