The multiplier effect is the effect most people leave out of their economic equations either out of ignorance or because lets face it: Its almost impossible to get a real fix on what it is or how much it actually impacts economic activity.

The tax cut debate is a good example: One side pretends that all tax cuts are static while the other side pretends that all tax cuts result in many multiples of return in the form of increased economic activity. The truth is somewhere in between, and not only is it impossible to predict in advance, it's even impossible to accurately measure after the fact and therefore, the subject of ongoing debate. We can estimate all day long, but the models are always built on estimate after estimate after estimate...

The oil price multiplier is huge as oil is the raw material that drives everything else in our economy. Its also huge psychologically as it hits us all in the pocketbook every time the heater kicks on or we fill our car with gas. But the amount we pay to the rich oil sheiks while large, is nothing in comparison to the size of the overall American economy. So if those sheiks decide to sit on their fortunes instead of spending them on new SUV's manufactured in Detroit: Let them.

I think they already a buying mostly European: The failed luxury tax of a few years back pretty much killed the american yacht building business. Those dollars are now gone forever.

Scott