Economist Scott Grannis estimates there's about $180 billion of high-yield energy debt. But only about $30 billion will likely default. That's a tiny fraction of $5.1 trillion in high-grade corporate debt, and an even smaller fraction of $28.3 trillion in U.S. Treasury, corporate, and mortgage-debt market value. Additionally, it comprises a small piece of the $23.4 trillion in U.S. equity-market value.
Forget the naysayers. There is no systemic energy banking risk that's comparable to the 2008 meltdown. Not even remotely. The energy supply shock is unambiguously good.
Lurking behind the energy-price drop (AAA gasoline nationwide is about $2.20, a buck less than a year ago), don't forget $3 natural gas, which is increasingly gaining energy-market share. Also, there's the matter of the economic havoc falling like boulders on our oil-producing enemies in Russia, Iran, and Venezuela. The U.S. energy revolution has done for national security what President Obama seems incapable of doing.
Read MoreLow oil good for Americans, not global growth: Pro
Then there's the economic power of the rising dollar. 'King Dollar' is at an eleven-year high against its major counterparts. It's attracting capital from around the world. It's holding down inflation. It's providing major new purchasing power for consumers and businesses.
Lower production costs and commodity costs will increase our exports and give us more buying power for the purchase of imports. All this helps the global economic recovery.
Most people have this story wrong. It's not Europe and Japan that are going to hold the U.S. down. It's a resurgent America that's going to build them up—despite all their structural policy mistakes.
Also inside the economy, business investment is improving, housing is slow to recover but is recovering, and wage and salary income are finally growing at 4.5 percent. With less than 2 percent inflation on consumer prices, that leaves over 3 percent of real spending power. It may not be fabulous, but it is good.
Looking at Treasury bond yields, real rates are rising—a sign of better growth—while inflation fears are declining. Banking risk indicators, like 2-year swaps spreads, are very low. And profits, the mother's milk of stocks and the lifeblood of the economy, stand at a record-high share of growth. They are likely to keep growing in a 5 to 10 percent range.
Fortunately, the Federal Reserve's balance-sheet expansion never really worked. Excess bank reserves never circulated throughout the economy. The money supply has been quiescent. And that's a good thing, because if quantitative easing (QE) had worked, the inflation rate could actually have been 10 or 15 percent instead of less than 2 percent.
Meanwhile, the federal government's spending size has dropped from near 25 percent of GDP to less than 21 percent of GDP.
Obama's so-called spending stimulus has been stood on its head. In the early years more spending generated less growth—the worst recovery since WWII. But in recent times less spending is producing more growth—probably toward a 3 percent trend. (We need roughly 4 to 5 percent growth in the years ahead to reclaim America's 70-year average of 3.5 percent.)
A final optimistic thought: A big tax cut for large and small businesses combined with King Dollar is the exact supply-side-growth mix that generated booms in the 1960s, '80s, and '90s. We can do this.