A macroeconomic modeling analysis of the Energy Security Leadership Council's "National Strategy for Energy Security"
On February 23, at a speech at the National Press Club, Energy Security Leadership Council (ESLC) Co-Chairman Frederick W. Smith-Chairman, President and CEO of FedEx Corporation-released the results of a study of the long-term economic effects of the ESLC's National Strategy for Energy Security. Commissioned by the Council and conducted by the Interindustry Forecasting Project at the University of Maryland (Inforum) and Keybridge Research LLC, the study is based on a simulation analysis employing the highly respected Inforum LIFT model, an interindustry macroeconometric model of the U.S. economy.
In short, the study finds that, if implemented today, the ESLC policy package would result in a wide range of beneficial impacts to the U.S. economy between now and 2050. Household income and American employment would be higher, the U.S. trade deficit would be smaller, and the government budget balance will improve. Most importantly - thanks to substantially reduced oil dependence - the American economy would be much better prepared to withstand future oil shocks. In essence, the ESLC energy package can be thought of as a self-financing insurance policy that will make the economy more robust in good times and more resilient when subjected to energy shocks.