Fossil Energy Restrictions Drives Debt and Deficits Higher

The fact that lower fossil fuel costs will have a direct impact on the debt and deficit is a given as history can prove. With some 700 million dollars going over seas in past years to secure oil from belligerent states in the middle East had a huge impact on our nations trade deficits.

Now with the invocation of 'fracking' to extract oil and natural gas in this country releasing huge new  fossil reserves, the cost of fossil fuels should come down but that is not the case. Mr Obama, and his progressive socialist party members, including the environmental lobby, have decided that we can not have access to these new quantities due to their impart on global warming and climate change. It's the release of too much Carbon Dioxide they say, and so are pushing renewable energy sources like solar and wind to replace the fossil fuel that drives our economy.

This is where the EPA's war on coal comes from and the denial of access to public lands for exploration as well as off shore drilling or the ANWAR in Alaska. The United States gets more then 43% of it energy from coal alone and the demand goes up every year. Renewable energy sources produces less the 2% and at a cost far higher then that of fossil fuels.

This is all about controlling outcomes through the limiting access to energy resources. This is about strangling the population by edict to gain power. Nothing has changed. It has always been this way for the progressive Democrats, only now they believe it is their time to make their move to once and for all destroy the American dream of individual freedom and establish a socialist state. They have a complicit president and control of the two thirds of the government to make it happen and they are doing that with near impunity.

How Oil Prices Affect the Debt
Source: Phillip Swagel et al., "Oil and the Debt," American Enterprise Institute, September 24, 2013.
October 3, 2013

A report from the American Enterprise Institute focuses on the intersection of two issues that have concerned policymakers and the American public for decades: heavy U.S. dependence on oil and large federal budget deficits. Surging oil prices and trillion dollar federal deficits in recent years have magnified these concerns. While both topics have been independently studied, discussed and debated, little attention has been paid to the interactions between these two factors.

One analysis estimates how historic federal deficits and debt levels would have been different if oil prices had risen at the same rate as the price of other goods and services from 2002 to 2012, instead of increasing dramatically over this period.

• The results from this modeling exercise indicate that, by 2012, lower oil prices would have resulted in the U.S. federal deficit being $235 billion lower; the accumulated U.S. government debt being $1.2 trillion lower; and the debt-to-gross domestic product (GDP) ratio being 6.6 percentage points lower.
• Some of the drivers of the would-be impacts of lower oil prices are direct, such as the reduction in government expenditures on fuel.
• The more significant drivers, however, are indirect, and include reduced inflation, which reduces cost of living adjustments for Social Security payments and higher economic growth, which raises incomes and therefore income tax receipts.

Another analysis estimates how reducing petroleum dependence through improved fuel economy and the increased use of alternative fuel vehicles in the transportation sector could affect the U.S. economy and federal budget in the future.

• The analysis finds that reducing oil dependence through the increased use of alternative fuel vehicles and improved fuel economy would make the federal budget deficit $492 billion lower in 2040.
• It would also cause the federal government to accumulate $5 trillion less debt over the 2014-2040 period, and result in a federal debt-to-GDP ratio that is 10.3 percentage points lower in 2040.