Monday, April 2, 2012

Carrot and Stick

I've frequently noted that it would've been a whole lot cheaper for us to offer Saddam a deal he couldn't refuse: buy all his oil at double or triple then-prevailing market price. This would've been LOTS cheaper than going to war with him!

We've been using stick against Iran, in the form of sanctions.
Doesn't seem to be working.

How 'bout trying a carrot?

Let's suppose that following Obama's re-election, oil prices drop dramatically.
This is NOT an unreasonable proposition (see graphs in preceding post).
... say $40/bbl is the prevailing market price.
We offer to buy ALL Iran's oil for double that price - $80/bbl.
Iran exports around 3Mn bbls/day.
That'd cost us about $88Bn/year.
We'll make the deal for 4 years.

Of course there would be strings attached.
IAEA and anyone else who wants to inspect Iran's nuclear facilities would be welcomed with open arms.
There would be NO movement toward developing a nuclear weapon.

On the plus side: this is $$$ directly from U.S. tax-payers - and we just GIVE the oil to our Big Oil buds. They don't have to pay one red cent for it.
(Of course, they would have to pay for transport & refining... )

That $88Bn/year works out to about $350Bn over 4 years.
Based on cost of Iraq war, 4 years of war with Iran would cost about $356Bn.
We save $6Bn with my plan.
... AND - our Big Oil buds get the oil for FREE!

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