In the past year, the Federal Reserve Board has used its authority to raise those interest rates it is authorized to change. Under the current chairman of the board, this has been done in order to avoid inflation.
These actions of the board certainly have some impact on the economy over time, but they are a less important factors in the economy than free markets.
We are living in a rapidly changing period of time. The world population has already outgrown its resources, if one thinks in terms of the world population as living at the level of the average American family.
The world economy works on the basis of the law of supply and demand. Oil is in short supply in relation to demand as millions of people in China and India are entering the middle class. We can't control the price of oil by Federal Reserve Board interest rate increases.
In the year 2000, the current administration came to office in time to deal with a declining economy. We are now in a slow recovery. There is simply too much risk of turning this fragile recovery into a recession if the Federal Reserve Board continues to raise interest rates.
A better way to deal with oil prices would be a crash program to develop an economical alternative fuel, such as the program we had to develop the atomic bomb.
Such a program could be a huge benefit for the automobile industry. It could make the use of automobiles affordable for more people. It could significantly reduce the funds available to the terrorists to finance suicide bombers. It could result in an earlier reduction of troops in Iraq.
Unfortunately, lobbyists have more access to, and influence on, legislators than the general public. At the present time, major companies that could profit from such a development either can't finance it, or consider it too risky or unprofitable.
Government has the resources to do this and success in this area could result in a great improvement in the national economy and the financial position of our government.
It now appears that such a government project will happen only if a large portion of our citizens become very active in the political process with the objective of making such a project a national priority.
Jim Winter, Payson