ISAAC CHAMBERS
Gargoyle senior editor
Posted Wednesday, Dec. 3, 2008

THE NATIONAL BUREAU of Economic Research announced Monday that the U.S. economy is officially in a recession, and has been since December 2007.

With signs that the economy is weakening coming too often for comfort, politicians and economic experts are scrambling for stopgap measures and solutions.

These measures have come in the form of economic stimulus packages and rescue plans.

The concept behind an economic stimulus package is good in theory, but falters in practice. The intent of a stimulus check is to give money back to people so they can spend it and thus stimulate the economy.

But what do most people do with their stimulus check? They don't spend it on a that flat-screen TV or that new car because they already got those with credit cards or seductive financing options. They save their money, or use it to pay off debt.

And it's getting increasingly difficult to justify bailouts and rescue plans when companies like AIG are sending top executives to party it up at an ocean resort for a cool $440,000, just a month after an $85 billion bailout.^[1] Or when the CEOs of the Big Three automakers (General Motors, Ford, and Chrysler) show up in Washington on their private jets with a tin cup out, begging for public funds.^[2] Do we really want to give matches to the people that started the forest fire?

Isn't it a bit ironic that most economists will espouse the virtues of a free market economy until things go seriously wrong, and then it's all hands on deck? Throwing money at a problem doesn't fix it, and throwing money at the wrong problem certainly doesn't fix it. While certain rescue packages can be an essential step to temporally avert disaster, it's like trying to bail out water from the RMS Titanic.

Creating new a new industry, however, can grow the economy, create jobs, restore consumer confidence, and infuse the economy with capital. A single industry has the ability to pull up lagging industries and restore the economy. The war industry during World War II pulled the U.S. out of the Great Depression, while the growth in the Internet sector during the '90s created huge growth in the economy.

The solution to our current economic problems is energy. Creating fully renewable energy sources here at home eliminates our dependence on foreign oil, ensuring that the money we spend on energy stays here. An American energy plan utilizing renewable energy will require a diverse portfolio of technologies and energy sources including solar, hydro, tidal, wind, geothermal, nuclear, and bio energies.

Investment in new energy infrastructure will create jobs in the U.S. and save billions of dollars annually through more efficient conversion, storage, and delivery. Because renewable energy is by definition diverse, it will be far less volatile than relying on fossil fuels.

Our current energy policy has been marked by instability and fluctuating prices, dating back to the energy crisis of the 1970s. The Western U.S. energy crisis of 2000 and 2001 was characterized by extremely high energy prices and rolling blackouts. In general, the cost of electricity, heating, and cooling have all risen nationwide in recent years.

The average price of regular-grade gas in January of 2007 was $2.19 per gallon. Rising to nearly twice the price in just 18 months, gas reached an average of $4.05 gallon in the middle of this past July. Since then, amid a worldwide economic downturn, the price of gas has plummeted more than $2 to an average of $1.79 per gallon.^[3] But consumers have to wonder how quickly prices will rise again when circumstances change.

The cost of energy has a huge impact on the economy. When gas prices go up, families cut down on transportation and spending. Business raises prices to adjust for higher distribution and utility costs. A stable energy system would reduce stresses on consumers, businesses, and the economy.

The research and development of new energy sources would create new technological advancements in other arenas, similar to the way the Space Age spawned critical advancements in science, medicine, technology, and our understanding of the universe.

Biofuels can be used without compromising agriculture and food supply and demand by reprocessing crop waste materials. By making more crossover vehicles (sports utility vehicles with the chassis of a sedan), we can accommodate the desire for larger vehicles while yielding better fuel efficiency and making safer driving through better crash compatibility. We can also design better car batteries.

The buildings we build— ours homes, office buildings, schools, and manufacturing plants— account for the majority of the energy we consume. Making more efficient homes and buildings with more efficient heating and cooling systems will eliminate a huge part of our energy needs. Our buildings can even be used to generate energy.

New rotating skyscrapers, designed by Italian architect David Fisher, are going up in Dubai and Moscow. Each floor of the skyscraper rotates 360 degrees, constantly changing the shape of the building. Thin turbines between floors generate enough electricity for the building to be entirely self-sufficient.^[4] The Dubai skyscraper is expected to be completed in 2010. The skyscraper is being built in sixth the time as a traditional building of comparable height– and at a cost reduction of 10 percent.^[5]

The transition to fully renewable energy will not be sudden. Fossil fuels will be an important part of the transformation— our thumb while we're adjusting to life without a pacifier. It is important, however, that we take energy seriously; that we act with resolve and swiftness.

A new energy plan for America would transform and restore our economy. The added benefits would extended far outside the realm of the economy. Independence from foreign oil would help our national security interests. Significantly reducing the fossil fuels we burn would decrease pollution, curb emissions, and help reverse climate change.

In the past, conventional wisdom was that a new energy policy would be a threat to our economy. Now more than ever, a new energy policy is essential to revitalize our economy, and the possibility of a new energy policy comes with many bonus gifts in tow.

References