Were High Oil Prices A Stimulus?

According to the economic theory currently being pedaled in Barack Obama’s Washington, spending huge gobs of money stimulates the economy. Funny, wouldn’t that mean that $4 gasoline should’ve been a stimulus? High energy prices sure had people spending there for a while, in amounts roughly triple what the so-called “stimulus” bill will pump into the economy. Yet the increased cost of this spending is part of what popped the debt bubble and sent the economy downward to begin with.
So, apparently, spending money does not necessarily stimulate growth and stability. What? High energy prices are a special case? Well then, that also doesn’t bode well for the stimulus bill, since nearly $100 billion of the proposed fiscal orgy will be directed specifically to “green” energy – the most expensive kind of energy there is. In fact, I think it might be called green energy because many of the technologies lumped under that banner are about as efficient as just burning dollar bills to generate steam. Now that I think about it, dollar bills, being made from cotton fiber, would probably qualify as biofuel under the bill.

Even worse, most of the money allocated for stimulatingly expensive green energy (rather than expensive regular old energy) would be doled out in grants and “infrastructure” contracts that would see most of the money not spent for months or years, long after the course of the current recession will have already been determined. With any luck, most of the funds will jolt into the economy just about the time the bailout funds and natural economic cycles start to move things along, creating a huge inflationary shock that will actually lengthen the economic downturn.

Energy Tribune