How Unleashing American Energy Independence Tames Inflation

As American families struggle with high grocery and energy prices, many consumers may not stop to think about the connection between inflation and lack of energy independence. While the annual rise in food prices has slowed down from a 43-year high of 9.9% in 2022 to a projected 2.9% this year, keeping pace with overall inflation, the net effect on consumers remains expensive. Likewise, although gas prices are on track to fall 6% by next year, natural gas costs are projected to rise due to flat production and increased exports. Meanwhile, electricity prices have increased faster than inflation since 2022 and will continue to do so through 2026. Americans feeling the impact of these trends should be aware of how the energy decisions our leaders make affect inflation throughout the entire economy.

Energy as the Backbone of the Economy

Economic researchers have extensively researched how rises in oil prices trigger inflation for other types of energy, food, and core prices, such as housing and medical care. Likewise, inflation serves as a reliable predictor of energy costs, underscoring the intimate connection between these economic variables.

High energy costs ripple through every sector. Fuel and electricity push up inflation by raising costs, such as manufacturing and transportation, increasing expenses for businesses and passing them on to consumers, in addition to directly increasing household expenses. On the other hand, strong oil and gas production increases supplies and lowers costs, helping keep prices stable.

Dependence on Foreign Markets Breeds Instability

Energy costs in turn interconnect with foreign policy. U.S. energy costs remained stable from World War II to the mid-1970s, while the U.S. used quotas to limit reliance on oil imports, but they began to surge after 1975, under the effects of U.S. dependence on OPEC. Reliance on imports peaked in 2007 and has fallen gradually since then, enabling the U.S. to finally reclaim its status as a net energy exporter under the first Trump administration in 2019. Unfortunately, the COVID pandemic interrupted this trend, sending U.S. energy production into decline, while enabling China to increase its production. China has now joined forces with India to bypass U.S. oil sanctions against Russia.

American Abundance Lowers Costs

Relying on foreign nations for energy empowers America’s adversaries to leverage energy costs for economic warfare. Energy independence driven by innovation promotes strength at home and abroad, supporting an America First agenda.

Putting America First

We at “The” FourG Nation support leaders who put American energy first. We must pay attention to news about legislation that affects the energy industry, especially in our home states. Stay vigilant against politicians who align themselves with extremist groups that attack U.S. energy production, often with backing from America’s adversaries. Support political leaders who put American energy and your interests first.