Joe Perez

iTrader: (8)

Both points of view are correct.

Yes, higher energy prices will force people to be more energy-conscious, and more money will go into R&D on "green" energy sources. People will buy "cleaner" cars, and traffic congestion will decrease slightly. We know all of this as a matter of historical precedent.

It will also harm "the economy" as a whole. More money will flow out of the US to oil-producing nations, sales of domestically-produced automobiles will decline relative to sales of Asian automobiles (though, in fairness, the Volt may change things this time around), and don't forget that much of that money spent on "green energy" comes from taxes and deficit spending, that money could otherwise have been spent on consumer goods, food and trackdays. And while a lot of R&D on "green" energy happens in the US, that's a trivial sum of money compared to actually manufacturing all of the so-called "green" products (solar cells, lithium batteries, etc), and 0% of that takes place within the US, so that's yet more money flowing out of the country.


None of this is theory or speculation. All of this has happened before.

Scrappy Jack

iTrader: (2)

Is that accurate? I hear that on the TV and radio all the time...

Where do you think the USA gets most of its imported oil from? (Hint: there is minimal, if any, overseas transport involved).

Does the money that family spends at Wal-Mart end up overseas?

fooger03

iTrader: (2)

Someone has to make the cheap TVs, and Jeans, and replacement light bulbs to supply wal-mart with...they damn sure aren't doing much of that in our neck of the world...

Enginerd

iTrader: (1)

They lend us money so we can buy their cheap crap.

Joe Perez

iTrader: (8)

In May of 2011, 42.4% of the US's crude oil imports came from producers in Africa and Asia, 23.5% from Canada, 19.9% from South America, 13.5% from Mexico, and 0.7% from Norway.

I don't know if 100% of our imports from Canada and Mexico travel via pipeline, or if overseas shipments are used to service some fields in those countries. If we assume imports from those two countries are exclusively by pipeline and no shipping is involved, then "overseas" imports (those from Asia, Africa, South America and Europe) account for slightly over 63% of total imports.

Domestic production of crude oil in the US is presently around 5.5m barrels / day, which accounts for slightly more than 1/3 of total US crude oil consumption.

Diamond Dave

Well, the US economy runs on New car sales, New & existing home sales, and other consumer spending. Unemployment is running at a conservative 9% (with actual unemployment possibly edging 20%). Foreclosures are not ebbing. Call a local bankruptcy attorney to find out how busy they are.

So yes, US Consumers must buy things to keep the economy rolling. If one could assume that most US consumers are buying things without cash (i.e., they don't have the cash, but think they can just buy on a credit card), then US consumers must buy those plasma screen TV's, Vinyl windows, and new cars with credit.

The government doesn't create jobs, but they sure do have the ability to negatively impact how employers spend their money. Increasing taxes on "the wealthy" also does what? Help those with money find ways to hold onto their money instead of injecting it into the economy.

Braineack

iTrader: (62)

timely, just read something that mirrored that today:

this was in regards to super rich not giving money to charity and arguing that their businesses are charity in the sense that people benefit from products, jobs, and indirect positve impact to suppliers and retailers. Ending with the question:

Diamond Dave

Accurate points about focusing on "green" production right now. Hell, any production is what we need. Don't limit us to forcing Green production or green jobs.

Once US auto makers produce excellent products they will earn more sales.

Although, I do think that when oil or fuel prices increase, that only makes it more expensive or more difficult for overseas production to be competitive.