Just would like to wish everyone a Merry Christmas and a prosperous New Year. I think that 2010 will have some ups and downs and unfortunately, I think we are going to enter a period of stagflation until we address the fundamental issues that prevent this country from being truly competitive.
The single most important issue is that we need to stop relying on foreign energy and need to return our balance of payments to a sustainable level. There is a very simple approach to economics that basically can determine the wealth of a country by taking wealth created, add it to wealth already in existence, subtract wealth consumed and adjust for wealth imported/exported.
Now the basic formula can get complicated depending on how you measure wealth and whether wealth can be created out of nothing (i.e. housing bubble). However, what is clear is that the amount of wealth exported in trade for an item that is almost immediately consumed such as oil has a negative impact on the wealth of the nation. It is the most obvious and potentially most easily fixed drain on the nation's wealth. Use of more natural gas and coal while we develop alternative energy resources will lead to retained wealth and more jobs. It may not be the most economical solution for any one individual or business, but as a nation it needs to be our number 1 priority.
No comments:
Post a Comment