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Impact of high energy cost on the American economy

Energy price fluctuations in the U.S. can be blamed for negatively impacting the American economy in general. It has been argued that whenever fuel cost increases, a corresponding increase is expected in production costs. Increased cost of producing goods leads to increased prices, requiring consumers to spend more thus inflation occurs. Consequently, the consumer demand decreases as the well as the employment rate. Manufacturers tend to adopt alternative manufacturing procedures which consume less energy. This move results in a decline in production of the country which lowers the GDP (Kozmetsky, George, Piyu Yue, p. 137).
Ways through which this problem can be solved
Without the appropriate measures in place, the problem can get out of hand. Various strategies can be employed to remedy the situation. Finding alternative energy sources and more so the renewable ones is a good point to start handling the problem. If enough alternatives are found, then the prices may fall with time. Measures to conserve energy can also be instituted to ensure efficient energy consumption with little or no wastage (Consumer Energy Alliance, p 38).
The government can play a very vital role by funding projects meant to research and discover other efficient energy resources in conjunction with other private stakeholders. The American government should also be in the forefront when it comes to restoring peace politically unstable oil producing countries. Oil supply is likely to be interrupted when the region relied on for oil supplies goes to wear (Pena, Federico, p. 2).
In conclusion of the matter, unstable economic state can be restored by adopting the above suggested ways. Bringing down energy prices reduces production cost, which has a positive impact on the GDP of the states. Products and services prices also reduce meaning that inflation rates go down, saving consumers some money to invest in other areas. Combined effort by the government and the private players magnifies the role played by the private sector in the economy. It is only in a stable economy that the citizens will be able to lead a comfortable way of life.

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