Economic Blunders Of 2011
Now that the new year has begun it is time to once again reflect on the ineptness of our government in regards to the most blundering proposals that came out of Washington this past year. You don't have to go back that far only to realize that this past fall Congress really missed the boat. But, in the end did stop this country from falling into another Abyss. This time it was the raising of the debt ceiling. All that resulted was political posturing and more fearmongeing by the powers of the Republican party. The casualty of this fiasco was that Standard & Poor diminished the United States credit rating from AAA to AA for the very first time. Ultimately, this means that the United States has to pay more in interest for the billions of dollars that this country borrows. What made this one of the most horrendous debacles in congressional history is because the whole affair was so unnecessary. It was just another attempt by the Republican led legislature to openly antagonize the President and spread fear into the public. It just so happens that in the past Congress every so often has continually passed legislation to raise the dept ceiling without any fuss what so ever. This has become a necessary move to keep borrowing the 40% of the federal budget needed to keep this country solvent.
This is not so much of a blunder by by our own illustrious government but a purposely orchestrated maneuver to give the oil companies "card blanche" for keeping our energy cost higher than they actually should be. The continuing escalation of fuel and energy costs in the United States is brought on by the top export of the United States. Believe it or not, our chief export now is refined oil. The United States still leads the world as the biggest consumer of oil than any other country. We are and continue to be the worlds biggest gas guzzler. Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export. It will also be the first time in more than 60 years that America has been a net exporter of these fuels. To fully grasp the scope of how much refined oil is exported 10 years ago of all the exports coming out of America fuel wasn't even really considered a major export, not like today. Before today the top export from the United States has been aircraft..
Why refined oil as our chief export when energy costs continue to climb at home is another major flaw in the way congressional legislation favors big oil. For decades the U.S. has relied on huge imports of fuel from the Mid-East, Venezuela, and Europe in order to meet demand here. Our reliance on foreign imports of crude oil has only reinforced the image of America as the worlds biggest energy hog. And, up until a few years ago, whenever gasoline prices climbed, there were so many concerns that there were too few U.S. refiners on line to satisfy our unquenchable thirst for oil. Still, the United States is nowhere close to being energy independent. America is still the worlds largest importer of crude oil. From January to October, the country imported 2.7 billion barrels of oil worth roughly $280 billion. Quite ironic, that with oil being such a major import into this country only to be refined into gasoline, diesel and jet fuel so that the oil companies can export the refined fuel while our own energy cost continue to escalate has to boarder on the unconscionable.
It all boils down to profits. Fuel exports, worth an estimated $88 billion in 2011, have surged for two reasons: Crude oil, the raw material from which gasoline and other refined products are made, has and is becoming more expensive to produce. Oil prices averaged $95 a barrel in 2011, while gasoline averaged $3.52 a gallon. It was just a decade ago that oil averaged $26 a barrel, while gasoline averaged $1.44 a gallon. With the upsurge of fuel exports and the United States using less fuel primarily because of cost, which continues to undermine our economy is another ironic outcome of the policies that favor exportation of energy while our own country still suffers from the increasing energy costs. Our reluctance to invoke alternative energy sources.is another deterrent in solving our energy dependence of imported oil. With the increasing volume of fuel imports has allowed refiners to sell more fuel to other gowning economies like Latin America for example. In 2011 U.S. refiners exported over 117 million gallons per day of gasoline, diesel, jet fuel and other petroleum products. All this translates why the United States continues to pay more at the pump. The more fuel that is exported the more profit for big oil and a less of a supply cushion for any national emergency here in the United States. Another reality is that gasoline supplies are being exported to generate higher profits more than they would have generated here in the United States.
The first par of 2011 saw the federal government faced without an official budget. The Government had been operating without one for over 1,000 days prior to mid January. Another blunder by our illustrious legislature because a lack of a real budget makes it very difficult for all other governmental agencies to operate. Funding the operation of government is vital to advert any shutdown of governmental services; such as National Parks. Both the Republican and Democratic parties have used threats of governmental shutdown in order to get their way. By failing to come to agreement of the budget was just another attempt to get their own legislation passed. Their failure and lack of overall consideration of the consequences of any governmental shutdown was completely ignored. What makes this one of the worse economic blunders of 2011 is that there was and still is no legislation or action on reducing the trillions of dollars of our national debt or the astronomical deficits that keep getting higher.
The Federal Reserve's policies of this past year is another economic blunder of 2011. The central bank through it's policies of flooding the U.S. economy with money didn't reach the majority of the population where it would do the most good. Actually, the cash flow went to major banks and financial institutions for the direct purpose of easing credit for increased borrowing by business to spur economic growth and increase employment. This did the exact opposite. The failure to grasp the Williams Theory Of Economic Evolution by the Fed where interest rates have remained near zero and the two quantitative easing programs not to mention the mortgage-backed securities have done nothing to ensure that the Williams Theory Of Economic Evolution becomes a reality for the United States Economy. Today, these policies continue to halt the rising unemployment rates and control inflation.
A valued lesson in history would have gone a long way to improve the unemployment rates that are at the highest level since the Great Depression. The Presidents Job Bill was another attempt to gain a foot hold on the ever increasing surge in unemployment. Had the President employed the tactics of FDR when he outlined the programs like the WPA despite the initial price tag of over 447 billion today the likely hood of passage with a renewed emphasis of infrastructure investment like FDR and even Eisenhower did probably would have passed. But there again the failure to grasp and coordinate a very divided congress without compromise this jobs bill was doomed to fail. Another blunder for 2011.
There remains much to do for 2012. Let's hope that this election year our elected officials put petty politics aside and reach accord on solving the blunders that were made in 2011. Using National Economic Reform is a vital ingredient in fixing what is wrong with the United States economy. But, to make implementation of National Economic Reform and a realization of economic growth a reality for 2012 a unified cooperative legislature has evolved from this coming election.