“Stealth Stimulus” Shouldn’t Fly Under Congress’ Radar
ShareThisNovember 18, 2008· 2 Comments
The Wall Street Journal’s “Real Time Economics” blog points out that falling oil prices are a great boon for the economy, dubbing them a “stealth stimulus.” This is something we have been arguing for while—reducing energy costs provide a cost-free stimulus for American industry and consumers.
Wall Street Journal reporter Brian Blackstone notes that the almost $90-a-barrel drop in oil prices over the past four months “translates into as much as $300 billion in stimulus—more than 2% of gross domestic product—without lifting a finger or adding to the budget deficit.”
Unfortunately, this message hasn’t made its way to Washington, DC, where leaders from around the world met over the weekend at the G-20 summit to discuss a coordinated effort to stem the global economic slowdown. And much like the multi-billion dollar lame-duck stimulus package being debated by Congress this week, these economic efforts are doomed to fail if government giveaways and more regulation are the only options on the table.
Adding to that problem, many in Washington want to reinstitute many of the restrictions imposed by the recently-expired federal offshore drilling moratorium. This plan seems counterintuitive considering that the very same people clamoring to pass the spending-heavy stimulus bill want to keep domestic energy sources off-limits.
The reason these two moves don’t mesh is simple: Energy is critical for economic growth. It powers businesses, transports people, moves goods, and creates jobs. Simply put, energy drives our economy. So why spend hundreds of billions of tax dollars to bolster our faltering economy, if you’re just going to turn around and implement policies that increase energy prices—handicapping our economy?
More Federal spending is not the economic stimulus we need.
To revive our nation’s economy and foster economic growth around the world, wise investment and pro-growth public policy is essential. As The Wall Street Journal reported last week, “…the need is for sensible, reassuring policy, and a global government spending spree financed with higher taxes or more borrowing won’t stimulate much of anything…”
What will stimulate the economy and create real jobs is access to America’s energy resources. This is a “sensible” policy that will stimulate the economy and not lead to increased taxes down the road.
January 30th, 2009 at 7:20 pm
I’ve been saying the same thing for the past 10 years. One of the secrets to the US’ strong economy was gasoline and diesel when they hovered between $1.00 and $1.35 per gallon for years. One of the worst signs for me (not just when the price of crude went up) was when the cost of diesel started to climb way ahead of the cost of gasoline. For years diesel would be cheaper than gas (slightly) in the summer and then slightly higher in the winter (obviously due to home heating oil use) But, three years ago I noticed that diesel fuel stayed consistantly 50 cents to $1 above the cost of gasoline. Congress did nothing! That was one of the downfalls. Any fool realizes that higher diesel fuel means higher costs for every single thing we purchase and companies purchase. It still to this day does not make sense that diesel fuel should cost 25% more than gasoline. From a refining standpoint, it actually should cost less to make and is slightly less volitol to transport, so go figure. Sounds like another conspiracy. Exxon posted record profits for the year despite a bleak third quarter, so when can we wrestle them to the ground and ask for more than just the corporate tax on that insane profit (which was at all of our expense when gas was $4/gallon)
February 3rd, 2009 at 5:50 pm
I want to know what I can do, I want to become a senator and I think your agenda is the only one that I seem to like. It will assist our country and the world if America is strong the world is strong.
I run a General Contracting firm, I know that Jesus is the son of GOD. I have the laws written on my heart. I would like to take the cause to DC and force and teach the American public what needs to be done.
Thank you for all your comments on your web site. Very informative, keep up the good work. Amen
Sincerely
David S. Batchelder