Policy Today

Having saved the world from itself over 60 years ago and put a man on the Moon 25 years later, Americans are a proud lot. But, time waits on no one. As the country’s vaunted financial infrastructure reports over $400 billion in write-offs and credit dries up, the transportation infrastructure watches its airlines charge for carrying a suitcase while bridges collapse, and its social security infrastructure sinks slowly into the abyss of insolvency, dare we ask, “what’s next?” Try energy. Meeting America’s energy needs and moving toward a low carbon future look increasingly distant.

This article could as easily be about the financial or transportation infrastructure as it is about energy....

THE ECONOMY: DOWN AND DOWNER

Almost out of options, there's one possibility left for the American authorities–raise interest rates. The result: for starters, a stronger dollar, lower oil prices, and an incentive to save more and spend less.

Earlier this year, PT published a speech by New York financier Wilbur Ross. Ross estimated “the probable total damage from this economic crisis is something on the order of $1.1 trillion.” He went on to say, “there's another huge but unclearly defined time bomb called credit derivative swaps (CDS), in which one party contracts to pay another party in the event that a particular debt instrument defaults. Ac...