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[Forbes] John Mauldin - Oil provides more than 70% of the revenues of the government of Iran. The rise in oil prices has been a bonanza for the regime, allowing it to subsidize all sorts of welfare programs at home and mischief abroad. One of the chief subsidies is gasoline prices. Iran is spending 38% of its national budget on gasoline subsidies. Iran produced over 6 billion barrels of oil before the revolution in 1979. They now produce around 4 billion barrels a year. They are currently producing about 5% below their quota, which shows they are at their limits under current capacity. Iran looks like Russia did in 1988 - a welfare state built on the Soviet model widely understood as a formula for long-run economic suicide. 2007-07-09 01:00:00Full Article
Mullahs Gone Wild
[Forbes] John Mauldin - Oil provides more than 70% of the revenues of the government of Iran. The rise in oil prices has been a bonanza for the regime, allowing it to subsidize all sorts of welfare programs at home and mischief abroad. One of the chief subsidies is gasoline prices. Iran is spending 38% of its national budget on gasoline subsidies. Iran produced over 6 billion barrels of oil before the revolution in 1979. They now produce around 4 billion barrels a year. They are currently producing about 5% below their quota, which shows they are at their limits under current capacity. Iran looks like Russia did in 1988 - a welfare state built on the Soviet model widely understood as a formula for long-run economic suicide. 2007-07-09 01:00:00Full Article
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