It’s time to start exporting American oil for the benefit of the U.S. economy and national security according to First District Congressman Jim Bridenstine.
He spoke at the Pipeline & Energy Expo held at the Cox Convention Center on Tuesday.
Bridenstine and Sen. Ted Cruz (R-Texas) co-authored The American Energy Renaissance Act.
“When you look at Russia, 50 percent of the revenue coming into Russia is oil money from Eastern and Central Europe,” Bridenstine said. “Those countries don’t want to be dependent on Russia.”
He says Russia has an aggressive history of withholding oil shipments to punish its political enemies.
“We can export oil and provide security for our NATO allies,” he said. “It would be great for our Oklahoma and American economies and it would be a natural sanction on Russia.”
The proposed legislation also gives states more control of their own natural resources, calls for increased energy infrastructure and a “reigning in” of the Environmental Protection Agency.
Bridenstine also called for increased refining capacity and a requirement that revenue created by exports must be applied to paying down the national debt.
“It is written into the bill that it can’t be used for more social welfare programs,” he said.
Bridenstine, who has an MBA from Cornell University and degrees in economics, business and psychology from Rice University, also addressed concerns about the fluctuating stock market and what he calls a likely government shut down next month.
“People are going to tell you the markets are going crazy and they are not, politicians are going crazy and I’ll tell you why,” he said.
He said politicians are doubling down on policies which have resulted in an $18 trillion deficit.
“We have to sell bonds to fund the government, we’ve got to borrow money to sell bonds,” he said. “When you have an $18 trillion debt, interest rates are 2-3 percent and there’s a government shutdown pending, how many people are going to buy those bonds? Well they don’t.”
He says through quantitative easing, the Federal Reserve creates new money “out of thin air”.
“They take the new money and buy newly created bonds and the government is funded,” he said. “Nobody had to cut spending or raise taxes, that’s what your government has been doing. Through that process, they artificially drive up the price of bonds and artificially drive down interest rates, so everyone can say ‘Look how low the interest rates are.’”
In the U.S., there is a 50-year low velocity of money according to the congressman, which he says means businesses are not borrowing money and banks are not lending money because of government regulations such as Dodd-Frank and Obamacare.
Individuals are deleveraging and the cash is not entering the markets the way they normally would, it’s not circulating through the economy.
Bridenstine says these efforts prevent inflation from happening, but as liquidity returns to the markets, he predicts “massive amounts of inflation” to return much like the 1970s.
“In the 1970s, we had massive inflation, we are doing it to ourselves again,” he said. “The only way to quell that inflation when it happens is the Federal Reserve will have to sell the bonds and get the greenbacks out of the market in order to hold down inflation.”
The sell-off will result in too many bonds in the market and as the price of bonds go down, the interest rates go up.
“Now you have high inflation and high interest rates at the same time,” he said. “I know people who were buying homes in the 1970s at 18 percent interest.”
The difference between the 1970s and today is the debt.
“Today, your country has an $18 trillion debt,” Bridenstine said. “Ten percent of what we spend in the government is service on that debt, interest payments.”
Bridenstine said with the amount of debt the U.S. currently has, if interest rates go up to 1970s levels, it will be catastrophic for the country.
“We’re living in scary times,” he said.
He says that’s why representatives have to go to Washington and balance the budget.
“The reason we’re having these problems is because there is no room for error, interest rates are already as low as they can possibly go,” he said. “It can be fixed, it doesn’t have to be this way with a balanced budget. It will take politicians willing to take a stand and lose an election to save the country.”
Article from Tulsa Business & Legal News