OPEC’s $1 Trillion Dollars Cash Quiets Poor as $100 Oil Fills Coffers

(article by Ayesha Daya and Vivian Salama , published by Bloomberg News)

Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro-democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

Unlike past booms, when Abu Dhabi bought English soccer club Manchester City and Qatar acquired a stake in luxury carmaker Porsche SE, Gulf nations pledged $150 billion in additional spending this year on their citizens. They will need to keep U.S. benchmark West Texas Intermediate crude oil at more than $80 a barrel to afford their promises, according to Bank of America Corp.

Our Take:
We have no choice but to fund the hush money Middle Eastern tyrants are using to quiet the unrest of their citizens. And that trillion dollars a year is our life blood. Forget all the rhetoric coming out of Washington right now, the fingers pointing about the lack of jobs and the high cost of health care.

If we produced our own energy we would keep a minimum of $150 billion dollars in our own economy, and fund 8 million jobs. Unemployment and the affordability of health care would no longer be in crisis.

The next time someone tells you that using ethanol is somehow a waste of money, ask them whether they approve of us footing the bill for free food for all Kuwaitis in the coming year. This at a time when one in ten people in Minnesota may use of a food shelf this year.

Because oil production is so concentrated, these Middle Eastern countries can make promises that will cost the revenue produced by $80 a barrel oil, and they can guarantee that the market will meet that price, and more.

It is time to shatter these energy shackles. When we cannot pay for our own social services, it’s no time to be writing blank checks for energy so other countries can offer Cadillac entitlements.

 

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