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Common Currency: U.S. remains in international 'driver's seat'

Alan Zemek

Fiscal cliff, debt ceiling, spending sequester, continuing resolution.

It seems the new year is going to look a lot like the old year, where thought and time is frozen in place like an ancient mountain glacier that shows no perceptible movement as it carves out a valley, until the internal pressure of gravity and mass inevitably overcomes the friction of inertia, and the whole thing suddenly lurches forward, the leading edge breaks off, crumbles away, and falls into the sea.

So it seems is our political destiny, to be stuck in place, lurch forward, and then as political attitudes and positions refreeze, be stuck in place again.

There is no question about it; we have some serious structural issues to resolve with the way we finance and deliver government services and entitlements. But just as generals often prepare for the last war, some of our politicians are still preparing for the last election.

Sixty-seven House Representatives voted against the last minute fiscal cliff deal and derided it as irresponsible. The next day, on Jan. 2, the first trading day of this year, the stock market rocketed to a 300-point gain on the Dow Jones Industrial Average, nothing less than an overwhelming endorsement of the deal to avoid a self-imposed body blow to our economic recovery.

And what a difference a year makes.

Our on shore, domestic oil production has grown so quickly in the Bakken and other areas that deliveries to Cushing, Okla. sell for about a $20 a barrel discount from the North Sea Brent crude benchmark price.

There is a real scramble going on to find enough space to store it all. Coal dropped to less than a 40 percent share of electricity production in the U.S. for the first time in decades as older plants are phased out or converted to cheaper natural gas.

CO2 emissions are lower now than 20 years ago. Domestic auto makers are poised for a big year, with 15 million units projected to be produced. Home prices actually went up last year, and the shadow inventory of distressed properties has finally started to decline to a manageable level.

Bank bailouts, stimulus packages and bond buybacks are out. American manufacturing, energy production and U.S. economic competitiveness are in. Our economy is on the mend and the stock market has taken notice.

In geo-political terms, we are in the best position to pursue foreign policy objectives that suit our own national interest than we have been in a generation. Radicalism has been discredited everywhere. Rising middle class prosperity in India and China is increasing pressure for government and social reforms.

And one comment about all that public debt - to be snarky about it, we borrow all that money because we can. Our civic institutions are still the envy of the world and the full faith and credit of the United States still means something, that is, unless we screw it up.

Yes, we have serious spending and entitlement issues to resolve. But as far as the world's economy is concerned, the United States is still in the driver's seat.

But Washington, cramming the brakes and popping the clutch is a terrible way to drive.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera