Energy: The Hole in the Dike

While Obama and Boehner spar over raising the debt ceiling, unemployment continues to go up. While the debt is a small part of the problem, the real problem goes unabated. Once more with feeling, it is energy, energy, energy.

Picture the United States in the 1960’s as a vast reservoir of money sloshing around North America. Then OPEC comes and pokes a hole in the reservoir by violating American anti-trust laws. The money starts to leak out of the reservoir. First a little bit, then more, then even more. By the 1970’s it turns into a crisis, and the government makes a half hearted effort to the plug the hole out from which American money is leaking…except now they are called petro-dollars.

Rather than actually fix the problem, America looks the other way as the government sticks a finger in the dike rather than permanently fix the leak. Over the years, the leak has become bigger and bigger, and the money continued to flow out…until there was no more.

Financial derivatives may have been the tinder that started the financial in September of 2008, but it was the complete draining of money from the reservoir to OPEC that prevented the fire from being put out. The reservoir was empty.

But once again, rather than fix the problem, the Federal Reserve opened the spigots and tried to fill the reservoir with water by pouring money into the dry lake bed. Funny thing, because the hole was still there, the money flowed out of the reservoir as fast as the Federal Reserve could pump it in at the other end. The money was worthless.

And now there is no money. The Fed shut off the tap. And the nation is broke with a national debt equal to the entire GDP of the nation. And so long as we are energy dependant on OPEC, things cannot and will not get better. The reservoir cannot refill itself so long as the leak is still there. We send $1 billion/day to OPEC to pay for our oil. The figure is unfathomable...and the EPA blocks all efforts to plug the hole.

It is fixable.  We can do it.  But our political class seems to be dealing with symptoms, badly I might add, rather than fix the problem. While the national debt and the debt ceiling are important issues, neither can be fixed without first becoming totally energy independent. It would keep the money at home.  The reservoir could fell again…and that would resolve most of the problems.

The largest reserves of natural gas and coal are in the United States. We have the capability of producing safe nuclear energy. The second largest reserve of oil in the world is in Canada, not the mid-east. And we haven’t even begun to touch oil reserves off shore and in Alaska.

Now it is time to cage the environmentalist. Challenge the nation to become energy independent within five years with infrastructure spending to support cars and trucks powered by natural gas, hydrogen, diesel, and electricity. Fund by selling energy bonds to the public, not to China.

This effort will create millions of jobs funded by Americans rather than the Chinese, and make us wealthy and prosperous once again.

It’s time to plug the hole in the dike.