the simple solution is for the Fed to print more dollars <iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/Ldi-2v2Y8ys" frameborder="0" allowfullscreen></iframe>
That works if it's everyone's individual self-interest. That's why free enterprise works. It's in everyone's individual self-interest to make the most efficient use of their skills and resources. What doesn't work is government interference because the government is too stupid to know what's efficient and what isn't.
Keep an eye on the big picture, here. Say that they actually tap the reserve in an attempt to keep crude around $100, for example. Say they succeed for the next 6 months... and the economy manages to grow another 1.5-2% over that time period. What happens if, 6 months from now, something really does hit the fan in the Middle East? What if a Shiite uprising really does overthrow the government in Saudi Arabia, OPEC is thrown out the window, and the United States faces a *true* supply disruption? The US economy grinds to a painful halt, quickly, and we start looking to the '70s (and Max Max) for solutions. So, imagine these are your two scenarios: 1) - if you tap the reserves, 95% probability prices are kept at $100 before retreating as the MENA region quiets down, 5% probability petroleum imports into the US are halted by new hostile revolutionary governments in the Arab peninsula, and the US doesn't even have enough reserve left to plan another regime change, 2) - if you don't tap the reserves, 50% probability prices quiet down anyways and growth continues, 50% probability oil prices hang around $110-120, and acts as a brake on US recovery by 1-2% a year. Which one do you choose? If I were in Obama's shoes, I go with the second option; both of those outcomes are at least survivable. The first option is potentially catastrophic.
The Palin "drill baby drill" concept won't work for bringing down oil prices in the short term, it takes 3-5 yrs just to get those rigs/platforms running at full steam. With Libya situation having no end in sight and other middle east countries dealing with unrest it would be wise for the U.S. to start making more deals for oil imports with countries that are NOT in the middle east(canada, russia, mexico, etc) and start to tap into the reserves for a few months at a time. The U.S cannot afford to let oil prices get too high or it may cause the economy to stall to a point that we in the U.S will end up paying dearly for it( slowing consumer spending, slowing manufacturing activity, job hiring stalls, etc). Im sure some republicans are licking their chops hoping Obama won't use the reserves. That way if oil prices go higher to the point the economy stalls, they can say.. "you see?, you need to vote republican at the next pres election". The republicans are so cold hearted about winning the next pres election they would gladly let the U.S economy fall again just to get those votes.
You're framing the question incorrectly. It's not what one would do in Obama's shoes, it's what Obama will probably do based on his past behavior. From his past behavior, it is fairly evident that he is not the kind of person that saves for a rainy day or is big on US military action. He will will probably tap the reserves, engage in greater deficit spending to stimulate the economy, and give a speech (with a teleprompter).
Hello: Do any of you really think that in an emergency (not the marginally higher energy prices we are discussing) the government would share the reserve oil with the general population. That defies rationality. It is projected to last the country about 90 days or so. Estimates differ by agency. It would last the government (including the military) quite a bit longer. Who do you think is really going to get it. Soccor moms and gas jockeys or Homeland Security and the Military Branches? Think on it! jim
Agreed. The people that think they'll get relief from the SPR are the same people that think that they're among the elite. Time will show they are in for a rude awakening.
After the Libyan government falls the defeated non-defected soldiers will run around blowing up oil fields T or F