Earlier this year I suggested the oil companies would lower prices during July, August and September, thus reducing third quarter profits as they would be announced just weeks before the November elections. Another round of record oil profits would send angry consumers/voters to the polls.
The challenge comes in increasing margins during October so the final quarter of 2006 can return to gang buster status. While an attack on Iran’s nuclear facilities will cause profits to soar instantaneously, that’s months away according to the Israeli foreign minister. So how do the oil’s get prices to inch up ever so slowly the consumer doesn’t feel high heat?
Oil prices rose by more than $1 a barrel Monday after BP PLC said output from a massive Gulf of Mexico platform damaged by last year's Hurricane Dennis would not be restored until mid-2008, at the earliest.
Huh? Didn’t the oils just cite supply exceeding demand as the reason for the pronounced drop off this past month? How does a supply source offline since last year factor into the situation?
The second number Bush will be taking credit for is the reduced federal deficit. This will be waved in front of the country as evidence the Bush tax plan works and his success in reigning in federal spending. What he won’t say is Congress and the President pushed 9 days worth or 2.5% of Medicare and Medicaid spending into the 2007 fiscal year. They are reducing the federal deficit through the use of shell games.
The President’s 2007 budget calls for $647 billion on health care, 57% for Medicare and 33% for Medicaid. Using these figures as approximate for 2006, the federal government budgeted $582 billion for the two programs. A nine hold would push $14.4 billion dollars of care into the next fiscal year. Tack $13 billion onto the number the President says he saved the country in 2006 due to his “outstanding” leadership.
I suggest we honor those leaders by leaving them outstanding in their fields this November. Don’t send them back to Washington!
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