Monday, August 22, 2011

What Makes Our Economy Run?

Understanding what makes our economy run is really not very difficult, and you don't have to have a PhD in economics to understand that the cost of energy is a huge factor for millions of consumers. The shift upwards in the cost of fuel derived from petroleum, such as gasoline, diesel and jet fuel, acts in the same way as a tax increase that takes purchasing power away from the consumer. Bring down the cost of all energy will lead to a greater demand by consumers for goods and services and thus necessitate hiring by corporations and small businesses to meet the increased demand.

There is a balance that must be struck between drilling and the destruction of the environment. We need to drill more here within the boundaries of the United States because purchasing huge quantities of oil for foreign countries is bleeding our economy of much needed purchasing power as well.

While our politicians talk about jobs, jobs jobs, the truth is that jobs come from demand and demand comes from consumers with money in their pockets to spend. As I said, what makes our economy run is not very difficult to understand. Demand and money are the two main ingredients.

Stay tuned.

1 comment:

Butch said...

So true. If no one is buying then a retailer doesn't need someone standing around doing nothing thus they don't hire.