Oil Up, GDP Down

Our economy can’t catch a break. Last spring the European debt crisis derailed any chance of a recovery; now it’s oil. Prices have surged due to fear of violence disrupting oil supplies and the fear that political instability in the ME will persist. Every $10 rise in oil raises gas by 25 cents and that costs about $30-$35 billion; a quarter of the payroll tax cut and shaves between 0.2% and 0.5% off GDP growth.