November 30, 2012
Oil Prices and the Fiscal Cliff
Gail Tverberg, Energy Collective
The United States’ fiscal cliff is very much related to several changes we have been going through recently, and will likely continue to experience: High oil prices (more than triple their level ten years ago). High oil prices cause people to cut back on discretionary spending, leading to layoffs in discretionary industries and debt defaults. Governments get less revenue in taxes at the same time they need to increase spending for unemployment benefits, bailing out banks, and stimulus funds. Result: financial problems for governments of oil importing countries, including many Eurozone countries and the United States.
TAGGED: Social Security, Medicare, fiscal cliff, oil prices