ABSTRACT
This chapter explains that both people and companies, in other words were worse off, as if they had been subjected to a tax that was as large as the oil price rise. It was as if the US government had imposed a big increase in indirect taxation, such as a sales tax, on the whole country and then handed the entire takings over to the oil states. Even before the rise in the oil price, a serious imbalance had begun to emerge among the industrial countries. The ministers recognized that for some time the world was going to have to live with the oil producers' unspendable surpluses and that if the industrial countries reacted to their new and increased balance of payments deficits by any of the traditional ploys of deflating, devaluing or slapping on import controls they would simply pass on the deficit to other oil-importing countries.
