Free Markets, Free People

Employment: Why “government spending” should be shelved in favor of encouraging private investment

In macro terms its really fairly simple.  We have always come out of busts with booms.  Wondering what the next boom is going to be and how to help it launch itself is where government should be looking and trying to act  – not at deficit funding government make work projects and future energy schemes still some decades from reality.

For instance – a little look into the not to distant future and a scenario that would help us in both the balance of trade and employment, arenas (the latter almost immediately).

But also, we will help to satisfy burgeoning demand for petroleum in Asia, South America and Africa. Yes, the US is an oil importer. But if we import less, that will help to satisfy world demand just as much as if a new exporter appeared on the market. If we import a billion barrels a year (2.74 million barrels a day) less, at current prices that works out to $100 billion off of our huge trade deficit. This could also be a huge engine of job growth. We now have about 2,000 rigs drilling, and more are being added all the time. For each rig there are the roughnecks, the service companies, the drilling pipe and casing producers, the local service providers, etc. It is big business, and growing fast.

Fortunately, we have lots of places to drill, in various shale formations around the country. (It’s not “shale oil” in the classic sense, better to call it, “shale associated oil”). For those who think that Yankee ingenuity is a thing of the past, just look at our oil and gas industry. It serves as a powerful testament to the power of the free enterprise system that a great many people chipping away at the same problem can come up with creative new ways of extracting oil from the earth that a centralized government program of oil production would never (and has never) originated. You don’t see these new drilling techniques coming from Russia, which is still sadly statist in its efforts to exploit natural resources.

We have the resources, we could be exploiting them now (relatively speaking) and have them benefit our economy while we do the pie-in-the-sky energy research the Democrats think is the panacea to all our problems.  I’ve never understood their insistence on ‘either/or’ in that regard.  Why can’t we do both simultaneously – which seems both logical and would help do exactly what they claim they want – employ Americans. 

Timothy Siegel’s point about innovation is well taken as well.  One of the reasons we’re moving past the peak oil predictions of the past is because of innovation from private oil companies that is allowing them to extract harder to reach and exploit oil and gas at a reasonable price.   We, as a nation, should be encouraging that instead of doing everything in our power to cripple such innovation.

Instead we get solutions like those below from the left.  Government should spend money when one of the greatest engines for economic revival is left sitting at idle while the administration figures out how to get more sugar in its gas tank.

It’s freakin’ nuts.

~McQ

Twitter: @McQandO

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6 Responses to Employment: Why “government spending” should be shelved in favor of encouraging private investment

  • But incentives matter, if the price of oil is too low, there will not be any incentive to explore better energy technologies outside of oil (and, of course, we all know that Big Oil has roving bands of armed lawyers & lobbyists ready to quash any research that threatens their prehistoric business model).

  • For the left more government and more spending is always the answer.   Education in the tank – spend more.  Benefits a burden – spend more.   Need a hole dug?  Hire 10 ditch diggers and 12,000 bureaucrats to regulate, oversee and look out for the billions allocated.  And of course the EPA will need to do an environmental impact study and those 10 ditch diggers will have to be outfitted with hazemet gear and must be union workers.

  • You don’t see these new drilling techniques coming from Russia, which is still sadly statist in its efforts to exploit natural resources.


    This is something that bewilders me about people who trust the government to fix all our ills: GOVERNMENT DOESN’T INVENT MUCH OF ANYTHING.  Yes, government can start a huge project and raise tax money (or borrow out the wazoo from China) to pay for it, but government doesn’t invent anything.  Drugs, spacecraft, computers, medical techniques, etc., etc.; all these are invented and made by private companies.

    Government’s best role in this is to get the hell out of the way.  My gosh, can you imagine what “the arsenal of democracy” would have been like if the federal government of 2011 had been around in 1941???

  • This is really a control issue.  The administration wants to direct the activity in areas like energy production, utilities, etc.  So, they would rather control the direction than actually watch some “out of control” processes create jobs.   Control will be their downfall.  It is probably too late to even try to turn things back to the private sector.

    • “Wondering what the next boom is going to be and how to help it launch itself.” needs to read:
      “Wondering what the next boom is going to be.”