Wednesday, October 8, 2008
The Economic Engine 2008
Did you watch the Presidential Debate last night? I thought it was a good debate. Both men presented their positions and now the voters will decide which man they want to be president for the next four years.
But where are we economically speaking? Today the world is facing a financial crisis. Just a few short months ago, it was the United States that was having economic problems, today the rest of the world is feeling the pain as well. For a long time, the United States has been the economic engine, or locomotive as some would put it, that pulled along other nations’ economies much the same way that a locomotive pulls a train. But, when the locomotive slows down, the whole train slows down. Those of you who play poker and understand what it means to the game if one or more big winners remove themselves and their winnings from the game, can easily understand what the increased cost of oil and in turn gas and diesel have meant to our domestic economy. $700 billion dollars can not be taken out of our domestic economy without there being some decline in economic activity . As the price of a barrel of oil comes down, and gas and diesel come down in price, people will once again be able to buy more than just basic necessities and gas. This is where alternative sources of energy are important to change the economic equation as it relates our domestic energy needs. But, now the delicate balance and confidence have been shaken and people are thinking twice before spending their money. So much of an economy, as sophisticated as ours, is dependent upon faith and confidence. Take away faith and confidence and economic activity declines. The next administration will need to play a role in rebuilding the faith and confidence the average American consumer has in the American economy. It is not like there is nothing that can be done to change this. Throughout the United States, there are projects that need to be started from bridges to other parts of our infrastructure. The Federal Government will have to take the lead in restoring faith and confidence to the economy. Once the American engine of economic growth starts moving again, the rest of the world will follow just like the cars in a train.