Exploring the ramifications of cheap oil for the U.S., the world—and you
At first look, the collapse in oil prices over the past year,
from $107 per barrel in June to below $50 a barrel today, seems like
the proverbial free lunch for American consumers. The decline in prices
is the equivalent of a $125 billion tax cut. And it’s effectively a
progressive one, since the biggest beneficiaries will be working- and
middle-class people who spend a disproportionate amount of their income
on gas for their cars and heating fuel for their homes. American
households with oil heat could save $767 each this winter. That cash can
now be spent on a new car—or a washing machine, an electronic gadget,
clothes or a few dinners out.
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