A rule of thumb for oil prices and growth

Brad Plumer wrote A rule of thumb for oil prices and growth "As my colleague Steven Mufson reports today, tensions with Iran are putting upward pressure on crude prices — and oil was already at a record high in 2011. Analysts are now fretting that oil could kneecap the fragile recovery. So is there a good way of estimating the effects of pricier oil?"

"Here’s another way of looking at it: In 2011, the United States paid about $125 billion more for oil imports than it did in 2010 (thanks, in part, to the disruptions caused by civil war in Libya). That “oil tax” was essentially enough to wipe out the entire stimulative effects of Barack Obama’s middle-class tax cut. A similar oil spike this year would cancel out a hefty chunk of the benefits of extending the $200 billion payroll tax cut bill that Congress is fighting over."