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.