The Flip Side of the Offshore Drilling Ban

The US government has instituted a six month ban on deepwater offshore water drilling in response to the BP oil spill, which will have its own ramifications.

"President Barack Obama's six-month moratorium on deepwater drilling in the Gulf has sent shudders across the coast's offshore oil industry — where no one knows just how extensive or long-lasting the damage to jobs may be.

Louisiana has long been indebted to the oil industry. Its thousands of good-paying jobs — offshore workers frequently earn $50,000 a year or more — counterbalance the low-wage tourism industry in the state's southern tier of parishes.

But that changed — at least temporarily — after the oil rig exploded in the Gulf of Mexico, spewing the black gold into the waters. Now, many of those who counted on making it in the oil patch are out stumping for jobs."

Given the excessively high unemployment rate in the US and the fact that a lot of other drillers have been insisting that BP has been using rogue practices in their drilling (i.e., the risk of another giant oil spill is not as great as the government suggests), the drilling ban will only further depress the economy, increase the unemployment rate and increase our budget deficits as claims for unemployment payments increase.