As economic growth comes to a standstill (or goes backwards), as financial markets slide and public debt cripples nations around the world, we hear a lot of talk about the need for some form of stimulus to spur economic activity.
If consumer spending, normally the most effective driver of economic growth is weak, governments often try to step in to boost activity. One problem with government-provided stimulus is that those countries that need the stimulus the most are the least able to afford it as more borrowing is almost always required when stimulus funds come from government coffers.
Tax cuts are also proposed by many economists and politicians as a way to put more money into the hands of consumers and businesses with the hope that the availability of funds will stimulate spending and spur economic growth. Calls for tax cuts, however, are often countered by calls from others for tax increases to cut government deficits which grow in times of economic crisis.
It is interesting that a potentially revolutionary technology — Andrea Rossi’s E-Cat — should be emerging against a backdrop of a world financial crisis. It may well be that a source of abundant and cheap energy could provide a far better stimulus than any of the tactics tried by governments so far. A dramatic decrease in energy costs should have the effect of putting billions and perhaps trillions of available dollars into the pockets of businesses and consumers which could be used to stimulate growth.
There would also be an important psychological aspect to a successful E-Cat launch — it would provide hope to a world that seems to be increasingly despondent about the future. Many people are deeply concerned about economic, political and environmental issues tied in with our current energy picture, and are unable to see any improvement in the outlook. Cheap, clean energy could provide a tremendous boost to confidence about the future and a major change in attitude could have an important effect on consumer and business spending. Also, if the E-Cat is truly a viable and improved alternative energy source, the new industry that will be built up around it should help create the jobs that are so important in today’s floundering economy.
We’re not there yet — but we may soon find that Andrea Rossi’s invention is the most effective source of economic stimulus available.