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Surging oil prices and impending debt limit negotiations have magnified concerns over heavy US dependence on oil and trillion-dollar US federal deficits. At an AEI event on Tuesday morning, Robert Wescott of Keybridge Research LLC and Phillip Swagel of AEI presented their historical and prospective analysis of the impact of America's federal debt and dependence on oil. Kenneth Blackwell of Liberty University School of Law began by describing the myth of US energy independence and the pricing of oil on the global market.
Swagel then explained how the Long-term Interindustry Forecasting Tool is used to determine the effects of different oil prices on the debt level. Wescott continued by discussing the importance of increased use of other natural resources and light-duty vehicles in ameliorating the economic distress brought on by the nation's oil dependence.
In the question-and-answer session, AEI's Benjamin Zycher critiqued the assumptions, methodology, and findings of Wescott and Swagel's paper. Zycher questioned several of the underlying arguments of paper, including the notion of a trade deficit being inherently bad for the economy, the inefficiency of oil imports, and the positive relationship between oil price and foreign dependence.
US national debt has reached unprecedented levels and threatens America’s economic security. As policymakers work to address the situation, they must examine the less obvious and often overlooked factors that are contributing to the crushing debt burden.
In a new Securing America’s Future Energy–commissioned report titled “Oil’s Impact on US Fiscal Stability,” Robert Wescott and Phillip Swagel find that high and volatile oil prices have had a considerable impact on increasing US national debt. They reveal that independent of the effects of the Great Recession, oil dependence added roughly $1 trillion to the national debt between 2002 and 2012.
Join Wescott, Swagel, and Ken Blackwell, former secretary of state for Ohio, in a discussion of Wescott and Swagel’s new report.
Join the conversation on Twitter with #OilDebt.
If you are unable to attend, we welcome you to watch the event life on this page. Full video will be posted within 24 hours.
Registration and Breakfast
Kenneth Blackwell, Liberty University School of Law
Phillip Swagel, AEI and Keybridge Research LLC
Robert Wescott, Keybridge Research LLC
Benjamin Zycher, AEI
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Kenneth Blackwell is a visiting professor at the Liberty University School of Law, a fellow at the Family Research Council and the American Civil Rights Union, and a senior adviser to Securing America's Future Energy (SAFE), an organization dedicated to improving US economic and national security through reduced oil dependence. He was previously the mayor of Cincinnati, treasurer and secretary of state for Ohio, undersecretary at the US Department of Housing and Urban Development, and US ambassador to the United Nations Human Rights Commission. During the 1990s, Blackwell served on the congressionally appointed National Commission on Economic Growth and Tax Reform and the board of the International Republican Institute. Blackwell serves on the board of directors of various high-profile organizations including the Timothy Plan, the International Foundation for Electoral Systems, the United States Air Force Academy Foundation, the Club for Growth, the National Rifle Association, and the Becket Fund for Religious Liberty. He has also served as a fellow at Harvard University’s Institute of Politics, the Heritage Foundation, the Aspen Institute, the Salzburg Seminar in Austria, and the School of Advanced International Studies at Johns Hopkins University.
Phillip Swagel is a visiting scholar at AEI and a senior adviser at Keybridge Research LLC. He was assistant secretary for economic policy at the US Department of the Treasury from 2006 to 2009, where he was responsible for analysis on a wide range of economic issues, including policies relating to the financial crisis and the Troubled Asset Relief Program. He has also served as chief of staff and senior economist at the White House Council of Economic Advisers and as an economist at the Federal Reserve Board and the International Monetary Fund. He is concurrently a professor of international economics at the University of Maryland's School of Public Policy. He has previously taught at Northwestern University, the University of Chicago’s Booth School of Business, and Georgetown University. Swagel works on both domestic and international economic issues at AEI. His research topics include financial markets reform, international trade policy, and the role of China in the global economy.
Robert Wescott is president of Keybridge Research LLC. Wescott has nearly 30 years of professional experience working on macroeconomic, financial, and public policy issues. He served for four years as special assistant to the president for economic policy at the National Economic Council at the White House and as chief economist at the President's Council of Economic Advisers. From 1994 to 1998, Wescott was deputy division chief in the research department of the International Monetary Fund, where he did research on global economic risks and policy challenges. He also was an official in the Fund's European Department. From 1982 to 1993, he was senior vice president and chief US economist at WEFA Group (today Global Insight Inc.), a private economic modeling and analysis firm, where he was responsible for all economic modeling, forecasting, and consulting operations. From 1989 to 1990, he was the first research director at the International Centre for the Study of East Asian Development in Kitakyushu, Japan.
Benjamin Zycher is a resident scholar at AEI, specializing in energy and environmental policy. He is also a senior fellow at the Pacific Research Institute and a member of the advisory board of the journal Regulation. He served as a senior staff economist for the President's Council of Economic Advisers from July 1981 to July 1983, with responsibility for energy and environmental policy issues. Zycher has also served as a senior fellow at the Manhattan Institute for Policy Research; a senior economist at RAND Corporation; an adjunct professor of economics at the University of California, Los Angeles; the vice president of research at the Milken Institute; and a senior economist at the Arroyo Center Jet Propulsion laboratory at the California Institute of Technology.