Creeping Gas Prices

A couple of months ago there was concern that oil would cost $100 a barrel and gasoline would go for $4.00 a gallon. May 2008—With oil about $125 a barrel ($133 on May 21), and projections of $150 to $200 a barrel, gasoline is expected to go to $4.50 per gallon. Chevron stock has gone from $36 to $96 a share since May 2003 (Editor`s Note: Over $100 a share since this was written ten days ago). The other major oil companies also have done very well.

Opinions differ as to why the U.S. invaded Iraq, but no one can deny the war's effect on oil prices or that the soaring profits of the major oil companies stem from disruption of oil supplies. Furthermore, at a cost of about $100 billion a year for the war in Iraq, the U.S. Treasury suffers while the oil companies thrive.

May we suggest a new type of economics? Forget the "voodoo economics" of former President George H. W. Bush. Let's have "quid pro quo economics." The actions of the U.S. have helped the oil companies with windfall profits. Now it's time for the oil companies to do something for the U.S., particularly the U.S. Treasury. Times of war call for special measures. So long as we are at war in the center of world oil production, oil profits should pay for the war, with the oil companies transferring their profits from consumers to the U.S. Treasury.

The impact the war on the Treasury is immediate and extending into the future. Borrowing is not the answer. Finding more revenue is.