Although Treasury may have accepted oil IOUs early in this process, the Treasury like its contractors, would want to be repaid in cash, not oil. Strategic oil reserves would be full and the government would have no particular use for all that crude oil.
That problem would be solved when the U.S. sold its oil receivables to U.S. oil and gas refining and distribution companies ExxonMobil, ChevronTexaco, and the like, for a price in the range of $12 - $15 a barrel.
At that price, the Treasury would make a substantial profit on the sale of the IOUs. The U.S. would thus be fully repaid for its earlier cash outlays to contractors and the excess cash would more than pay for both the war itself and for the earlier Bush tax cuts. These profits would continue to reduce the U.S. budget and trade deficits significantly well into the future.
Meanwhile, U.S. oil refiners would drastically reduce their own raw materials costs from $28 a barrel to around $12. The result would be huge windfall profits for those companies. Consumers might see a modest change in home heating oil prices or gas prices at the pump, but most would be satisfied with the assurance that prices would remain stable. The oil companies would thus make more money than ever before.
Follow the Money
Who would pay for such a scheme? The short answer is: you would. Or, as U.S. taxpayers and energy consumers, we all would.
Follow the money: Treasury (i.e., U.S. taxpayers) would fund both the war and Iraq's post-war reconstruction. Then U.S. consumers would buy refined petroleum products from the oil companies, who would purchase their raw materials from the government.
The government would make money, the contractors would make money, the refiners would make mountains of money, and U.S. citizens would pay for it all. Bush and Cheney would thus pick our pockets twice as taxpayers and as consumers and we would never know the difference. The fact that thousands of Americans and hundreds of thousands of Iraqis died to make it all happen would be incidental. "Freedom is not free."
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