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Friday, August 21, 2015

The decline in crude oil prices has a direct positive impact on consumers, but there are losers. Oil drilling has declined, which has resulted in a decline in the sale of American manufactured oil drilling equipment.

There are layoffs in North Dakota where shale oil is becoming unprofitable to get out of the ground.

There is a danger that the negative impact on specific industries could put our fragile economy into deeper recession, but if we can weather the needed adjustments in investments of capital and labor, a long-term lowering of of fuel prices could be a net positive.

As consumers retain more of their income for spending on consumer goods rather than fuel, there could be a surge in demand for other consumer goods.

A side benefit is that lower crude oil prices means less cash for countries that want to destroy us. This could even be a lesson for them about biting the hand that feeds them, but that might be too much to hope for.

We should continue to keep up the pressure to lower energy costs by giving tax breaks for the development of clean, renewable energy.