It must be that new math. President Obama points his finger at the evil oil companies and blames them for high gas prices. He claims that if we eliminate their subsidies that prices will go DOWN! Huh?
The Hill reported -
The president laid out his own plan for controlling prices, focusing on ending price gouging but calling for an end to the $4 billion in federal subsidies for oil and gas firms.
He said there are some steps the U.S. can take to improve the situation such as ramping up domestic oil production and ending subsidies for oil and gas firms.
“That’s $4 billion of your money going to these companies when they’re making record profits and you’re paying near record prices at the pump. It has to stop,” Obama said.
Wikipedia defines a subsidy (also known as a subvention) as a form of financial assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry (e.g., as a result of continuous unprofitable operations) or an increase in the prices of its products or simply to encourage it to hire more labor.
Got that? Subsidies prevent an increase in prices. Remove the subsidies…prices go UP!
Nicholas Loris at Heritage.org said it best.
Blaming speculators and creating unnecessary task forces is a good way for the Administration to signal it is “doing something” about high gas prices. But the truth is that the federal government is merely diverting attention away from its bad policies.