Nobel economist Paul Krugman argues that the GOP’s goal of increasing U.S. oil production will not help gas prices. The logic is simple:
- Prices for oil and gas are set by world supply and demand. China’s huge demand is the likely cause of recent gas increases. The amount of additional oil “supplied” by more U.S. drilling would simply not be a large enough to impact gas prices.
- U.S. oil production has recently increased significantly yet that has not led to gas price decreases. So adding even more production will not decrease gas prices.
The GOP also argues that increased U.S. oil production would add enough jobs to decrease U.S. unemployment, citing the example of North Dakota. Again, Krugman explains that the numbers don’t add up. The additional employment supplied by increased U.S. oil production just isn’t enough to significantly impact overall U.S. unemployment.
Why is the GOP promoting these policies when they are logically incorrect? According to Krugman…
To appease their lobbying and campaign contributors, the oil and gas industry.