Wednesday, July 30, 2008

Ignoring Supply and Demand

There is one element of the energy debate that is really quite simple. Lack of supply leads to increased prices. Democrats have claimed that drilling will have little effect on prices. However, President Bush repealed the moratoreum against off shore drilling, and prices dropped. They dropped because speculators see additional drilling as more likely to occur, and that keeps them from gambling on a shortage. Now there are a myriad of positions one can take on drilling. Drill here, don't drill there, drill everywhere, whatever you choose. However, the argument that a lack of supply isn't driving up prices is dishonest and foolish. The American people don't need an economics degree to recognize that the energy crisis is due to a lack of energy. While energy alternatives should be developed, there also needs to be a recognition that there is an immediate need for supply that is clearly effecting the economy. High energy costs effects everyone from businesses to individuals, and Congress should have the backbone to have an honest discussion about where the country stands.

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