Reply #47: It's not just the price, but also the balance of trade issues surrounding the oil [View All]

[OmahaBlueDog]

We run huge trade deficits buying oil from the Middle East, Africa, Mexico, Canada, and Venezuela.

Then, we have to invest huge sums in defense to defend these overseas interests.

Drilling for more oil helps in the same way direct pressure aids a bad cut -- it's short term. Substituting wind for oil burning electrical plants can be a big part of the solution. Hybrid technology and better electric cars can help. We have plentiful NG in North America, and retooling to NG engines is not a huge leap from a technology standpoint. It's mostly building distribution infrastructure.

To your bigger point. Energy costs are part of the equation. Housing (little being built or sold and falling prices) is a second problem, and it's likely here for a while. We were in a huge building boom from the post WWII years, through the 60s, 70s, and 80s as the Boomers married and had families, And then through the 90s and into the middle of the last decade as the Gen ys and Gen xs married and had their families. The problem now is that the Greatest Generation is dying off and the Boomers are retiring (when economically feasible), and there will be a glut of used housing coming onto the market at the same time that many still can't sell because their mortgages are underwater. Many of these homes will end up in the rental markets, and it will be interesting to see how that impacts suburban demographics. Meanwhile, growth will likely remain glacial for the foreseeable.

The good news is that if the wars in Iraq and Afghanistan really do wind down, an economic boom usually ensues somewhere between 5-10 years after troops return. The military is good at teaching discipline, leadership, fearlessness, and management skills -- all of which translate well to the private sector.