The Rise of the US

Posted on March 7, 2013.

The United States of America has embarked upon a great energy revolution. Experts have carried out studies that draw the conclusion that the country will be an exporter of petroleum for years to come. With the new rise of technology for exploiting petroleum, wind power and solar power, among others, the U.S. will be able to substantially reduce its balance of payments deficit.

It seems the U.S. may become, once again, the next world power. With no fiscal deficit, the ability to draw upon the substantial departments of research and development belonging to its universities and businesses, energy self-sufficiency, a revival in the manufacturing sector, respect for the law and an immigration policy that invites talent from the rest of the world to reside in its territory, coupled with the fact that labor costs are rising in China and the rest of Asia, the U.S. will probably return to its role as leader of the world economy for the next century.

Meanwhile, Europe — the only region that competes in technological terms — finds itself stymied by an aging population. Europe lacks sufficient incentives to stimulate entrepreneurship, with a fiscal deficit that makes prospects for growth look cloudy.

It seems that the prognosis that was made in 2009 about the decline of the U.S. following the financial crisis is not going to be realized. On the contrary, the massive debt generated by the Federal Reserve in order to rescue the business sector has achieved its goal. On the one hand, tax revenues have recuperated the money that was invested in order to rescue companies. Meanwhile, the Federal Reserve will make money by selling all of the bonds it bought from issuing companies to maintain low rates of interest and stimulate economic activity. Unemployment has gone down from 10 percent to 7.5 percent in the years following the biggest recession of the last 50 years.

Venezuelan leaders should make the most of the U.S. experience and instigate an energy revolution by applying similar measures in our own country. Despite possessing the world’s largest oil reserves, exploitation of said reserves has remained constant at 3 million to 3.5 million barrels per day for decades.

We Venezuelans have a notorious tendency to believe our own prejudices, even when reality indicates something different altogether. For three decades we have been applying currency and price controls despite the fact that, worldwide, it has been demonstrated by experience and literature that these controls have never worked as long as monetary liquidity is not controlled and fiscal spending is not efficient. We could draw from the world’s experience, which favors support for education in technology and a boom in new entrepreneurs. For decades Venezuelan governments have viewed entrepreneurial initiative with excessive doubt. Not even the government appropriately stimulates foreign business interests to invest long term. In contrast, the U.S. has taken many public-order measures to overcome stagnation and its economic challenges. Venezuelans need to be more practical and less prejudiced in order to resolve our social problems.

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