Gas Prices May Derail Obama Re-election

The surge in gasoline prices to about $4 a gallon is hurting American consumers. And that pain may bounce back to President Barack Obama as he seeks re-election next year, The Hill reports.

“Right now it acts as a very pernicious tax increase,” said Mark Zandi, chief economist for Moody’s Analytics, who has advised both parties on the economy. And voters generally don’t react too positively to tax increases, of course.

The rise of gas prices to $3.50 from $3.00 alone may lop off $75 billion to $80 billion from U.S. economic output, Zandi said. “There’s nothing worse for our economy than a significant increase to our energy prices,” he maintains. Again that’s a development unlikely to sit very well with voters.