The Bush administration has made quite a show of distributing the economic stimulus checks ahead of schedule. Going into the mail on Monday, these checks are designed, according to President Bush, to “help Americans offset the high prices we’re seeing at the gas pump, at the grocery store, and will also give our economy a boost to help us pull out of this economic slowdown.”
What Bush doesn’t seem to understand is that these checks may only stretch far enough to pay for the rising price of gasoline.
The US Energy Information Administration estimates that the price for an average gallon of gas will increase by $.40 per gallon this year. If gasoline consumption remains steady at 2007 levels, then it will cost an extra $231 to fuel a car in 2008. CNN explains:
For a middle-income single person, that represents more than a third of their rebate money […] For the average American family with two cars, that’s $462 of additional spending on gas – over a quarter of their rebate.
Hard to argue that these checks are really an economic stimulus, aimed at promoting local retail spending and the purchase of local consumer goods, when the money is going straight into Americans’ gas tanks.
Bush might still have had a leg to stand on if gasoline were produced, refined or processed here in the USA, but that’s one more thing that he forgot: most of our gas comes from overseas. In fact, two thirds of the nation’s oil is imported, mostly from Canada, Mexico and Saudi Arabia.
“The rebate goes into the tank, and then finds its way into economies far from our own,” said Jared Bernstein, a senior economist at the Economic Policy Institute. CNN breaks down cost of a gallon of gas:
In plain English, the bulk of what you pay for this gallon of gas goes to oil—and chances are, that oil had nothing to do with an American manufacturer. It looks like the only “stimulus” here in America is the 7% going to the guy who owns the gas station.