Wednesday, June 19, 2013

Taxes, climate and more political notes

I am finishing that article on  the NSA/Prism brouhaha, stay tuned. Also coming: my reactions to Ironman 3, Atlas Shrugged 2 and the coming sequel to “300.”

In mental formulation -- a story on how banking secrecy affects developing nations, especially after honest governments realize how much wealth was squirreled away by former kleptocratic rulers. The archetypes would be Fernando Marcos of the Philippines and Mobutu Sese Seko of Zaire.  It has been asserted that this category of cryptic wealth is vastly larger than the sums that are at-issue for US and European tax authorities. Indeed, that may be the underlying reason why the Swiss and other banking havens… oh, but more on that later. (Unless I am bribed into silence, that is.)

Meanwhile, so much has been going on, regarding space and Mars, starships and SETI and human immortality, that I’ve neglected the process we’ll count on to get there. For all its gruesomely corrupt “sausage-making” qualities, politics is what must keep civilization running and to pay for all of that other good stuff.

So let’s turn (briefly) back to that dismal but necessary domain, with a grab bag of political perspectives.

== Letting good news affect Culture War? ==

FederalBudgetDeficitFirst, I’ve long predicted this. The U.S. federal deficit is shrinking rather quickly — both in absolute dollars and as a share of the overall economy. The Congressional Budget Office projects it will drop below 4 percent of GDP next year and below an easily bearable 2.5 percent in 2015. This, after four years in which deficits were called a far more desperate danger than joblessness, or than decaying American infrastructure, or the potentially devastating effects of climate change.

The economy is paying a price for that deficit obsession, in slower growth. Even some conservatives are now warning that austerity has gone far enough.  Oh, but if we do turn the corner in both the deficit and economic growth, where will the angst-ridden doomcaster go, to groan that we live in hell-on-earth?

Well, well, you needn’t worry. For example, Rep. John Shimkus (R-IL) said in 2010 that he opposed action to remedy or palliate climate change because “the Earth will end only when God declares it to be over.” He is the chairman of the Subcommittee on Environment and the Economy. Think this is an anomaly?  Have you seen some of the things said by the top three majority members of the House Science Committee? But this study by the University of Colorado is especially disturbing.  It found that belief in the imminence of  biblical end-times correlates very strongly with - and is a major motivating factor behind - resistance to curbing climate change.

Not all Republicans are like this! Take for example Ray Canterbury, a GOP delegate in the West Virginia state assembly, who has asked the state board of education to include science fiction novels in the middle school and high school curricula.  This article in the Guardian goes on to interview both James Gunn and me on the topic.  And kudos to W. Va Delegate Canterbury!

Nevertheless, he needs allies… fellow adult and forward-looking republicans who will join in rejecting the GOP’s current fetish with anti-intellectual hatred of all things smartypants.  Were he alive today, William F. Buckley would be at the forefront, helping with the resurrection of a different, more venerable and grownup conservatism. In fact, something like it already happened once, long ago. See The Miracle of 1947.

Oh… but lest you assume that I am solely motivated by party loyalty – (in fact I am a registered Republican who gives keynotes at Libertarian events) – let’s turn to an example of cosmic stupidity on the other side.

== Madness affects both parties ==

Seriously, what better proof could there be than this: California State Senator Leland Yee (D-SF) wants to legislate against 3D printers, proposing background checks, serial numbers and registration. All because roughly 1 part in 100,000,000 of the US civilian arsenal was crudely made on a 3D plastic printer.

"Terrorists can make these guns and do some horrible things to an individual and then walk away scott-free".

Brrr… Just because this kind of mania is more common on today’s right does not mean we should ever lower our guard against stupidity on the left.  Take, as another example, the imbecilic low-level partisan “civil servants” in the IRS who thought they were helping their side by engaging in ham-handed (and inevitably caught) bias in vetting political groups for tax exempt status.  Mind you, I’m dubious that any such group should be so favored.  But Jon Stewart was especially caustic in his appraisal of this doltish, and possibly criminal, abuse of government authority. (More on this below.)

Frankly, I hate having to do all my political shopping from one store. Heck, Jerry Brown is doing great, here in California, but the Illinois democrats bug the hell out of me, and I miss the intellectual challenges I used to get from giants like Buckley and Goldwater. Even if one side is crazier right now - (and boy has it gone plumb loco-insane right now) - we have to stay wary in all directions.

== A Republican Party in disarray… ==

Former GOP presidential nominee Bob Dole (whom I always found respect-worthy) recently told Republicans to put a “closed for repair” sign on the door until 2014 so that the party can develop a “positive agenda.”  Dole said that he doubted that he and even former President Ronald Reagan could survive in today’s Republican Party. Dole told Fox News host Chris Wallace that “there was no doubt about it” that Republicans were abusing the filibuster because motions for cloture had increased from seven in 1969-1970 to 115 in last year’s 112th Congress. “There’s some cases where it’s probably justified,” the war veteran explained. “But not many.” (For clarification: cloture votes are the tip of the iceberg. In fact, there has been more filibustering since Obama entered office than in the entire previous history of the USA.)

Speaking of grownup Republicans, one of my heroes, former Defense Secretary Robert Gates (a GOP member who served both Presidents Bush and Obama, out of love of country (and who may have saved us all, under the drunk-stumbling W-regime) is interviewed about Benghazi and the Arab Revolutions. Read the views of a genuine adult.

As an example of the dysfunction, see how the state GOP in Alaska is dissolving into civil war between party oligarchs and Tea Party “reformist” grass roots rebels who – crazy or not – have a perfect right to wrest control by popular – albeit crazy – mandate.

== And Political Miscellany ==

JEFFERSONRIFLEMoving farther afield, here’s an interesting take on the ideas underlying my “Jefferson Rifle” proposal for a cogent compromise on Gun Control. One that will protect basic gun rights better than the amazingly frail Second Amendment… while also helping to solve the tsunami of violence that will turn public opinion away from the NRA.

Whatever your position along the stupidly lobotomizing “left-right political axis” you have to find it disturbing when extremists of either wing take pains to suborn and control mass media, using the newspapers and other sources we used to trust, in order to push a relentlessly singleminded and one-sided agenda. Growing up in Los Angeles, I have always had tons of respect for the LA Times. And I join in opposing sale of the Times and the Chicago Tribune to the Koch Brothers. Sign the petition.

The Witchita Kansas Eagle ran an article chiding rural Kansas voters in one of the reddest counties in America for parroting fierce anti-tax and anti federal doctrines while accepting three dollars from the US government for every two dollars they put in.  Red radicals recently pushed through an end to the state’s progressive income tax which will now result in the court-required burden of maintaining schools and roads to fall on home owners.  How long do you think it will take for folk in such counties to realize – as their grandparents did, around 1933, that they’ve been had? (Answer: longer than you would have believed humanly possible.)

While we are in Kansas – and yes, this is a satire site – still, why does it read so realistic?

 A fascinating tell-all from within Fox News:   Joe Muto was “a liberal mole within Fox News,” working especially with Bill O’Reilly – who happens to be the one human being I respect at that circus. Bill is an extreme polemic, but of the older school, that relishes argument, not a festival of lies. This excerpt from Muto’s book – An Atheist in the FOXhole: A Liberal's Eight Year Odyssey inside the Heart of the Right-Wing Media – makes fascinating reading, offering insights into the most profitable enterprise on television and one of the most influential engines of propaganda since the secessionist southern press of 1861.

goldwaterEarlier, I referred to old-style Republican grownups like Buckley and Gates.  Now let me turn to the archetype of them all, calling up the ghost of Barry Goldwater --

Again, what we are currently experiencing is not normal U.S. politics. Rather – as I’ve said repeatedly -- it is phase three of the American Civil War.

== At the opposite extreme ==

 In an effort to curb Western influence, China's leaders have reportedly banned the discussion of seven subjects in university classrooms, including press freedom, universal values, and the historical mistakes of the Chinese Communist Party.  Chinese professors and political analysts said a recent directive from Beijing to universities indicated an awareness among the country's leaders that the government is losing its ideological grip over students and younger faculty members.

While many faculty members said they had not been briefed by university administrators about the taboos, and in some cases had never heard of them, several professors said university leaders had instructed them at the beginning of May to avoid the subjects in class. According to academics who have been told about the list, the other taboo topics are judicial independence, economic neoliberalism, the wealth accumulated by top government officials, and civil society.

Alas.

 CONCLUSION

Do we have any hope at all, with such sensible folks along every patch of the political spectrum?  And other fools seek to scream for attention to the stars above! Depressed, I keep going back to Poul Anderson’s great Novel BRAIN WAVE and dream that Earth will enter a zone of space where minds work a bit better.  

Or else, maybe someone will invent a pill. Please.

52 comments:

Tacitus2 said...

One of my sons, far more clever than I, works at a University Fab Lab. He describes himself as the least unqualified person working there. It is a rapidly evolving technology.

Anyway, he had one of our US Senators stop by for a visit. It is an individual with whom neither he nor I have a great deal in common politically. But heck, hands were shaken, questions asked.

Of course the 3D printer/gun question was asked.

His answer? Sure I could print a crude firearm on the 3D....but I could make a much better one in about the same time in my basement shop!

The fact that almost no firearms of this nature are ever made or used says a lot of things.

Looking forward to additional discussion of the IRS thing. If, and I repeat, IF it turns out to be flunkies, lets fire a few.

I hope you all will remain open minded while a bit more investigation goes on. If this sort of nonsense is, or ever becomes, systemic it would be a severe threat to the body politic.

Tacitus

Jonathan S. said...

The crude, barely-functional bombs used in the Boston Marathon bombings were constructed from pressure cookers and the gunpowder from fireworks.

Clearly, we must immediately regulate and license the sale and possession of pressure cookers! Terrorists could use them as weapons!

And shoes and underwear, as well - remember the famed Shoe and Underwear Bombers!

Alex Tolley said...

Depressed, I keep going back to Poul Anderson’s great Novel BRAIN WAVE and dream that Earth will enter a zone of space where minds work a bit better.
Or else, maybe someone will invent a pill.


It is a great story. But there is the assumption that increased intelligence will result in more rational thinking. What if it doesn't, but just exacerbates the modes of thinking we have now? Be careful what you wish for.

What I would like is a pill to reduce the self-righteous thinking (your terminology, DB), i.e. the reverse of what was perpetrated on that senator in Existence.

I used to think a good education was sufficient, now I tend to doubt it. It is a necessary, but insufficient condition for rational, enlightenment thinking.

Lorraine said...

If you were to go silent, I'd suspect blackmail long before I'd suspect bribery. Have I overestimated?

Lorraine said...

But this study by the University of Colorado is especially disturbing. It found that belief in the imminence of biblical end-times correlates very strongly with - and is a major motivating factor behind - resistance to curbing climate change.

I'm assuming you remember James Watt...

Paul451 said...

A couple of wannabe terrorists tried to sell a portable x-ray death ray to the KKK and Jewish groups to use against their enemies.

http://www.mercurynews.com/breaking-news/ci_23492963/feds-2-ny-men-tried-make-x-ray

Ian said...

Just going to park this here for now:

http://www.pbs.org/newshour/businessdesk/2013/06/comeback-why-the-us-sits-at-th-1.html

As I've been saying for some time, US manufacturing is not doomed and various proposals to "save" it while well-intentioned are unnecessary at best and actively harmful at worst.

locumranch said...

Not to be repetitive, but the same paranoid circular thinking evident in phrases like "Guns, 3D printers, pressure cookers & underwear must be banned because bad people can use them to do bad things" was also present in the recent METI argument about not sending messages to ET because bad aliens may then use that info to do bad things to us.

As Alex says, increased intelligence does not necessarily correlate with increased rationality, a preponderance of knowledge does not necessarily imply a preponderance of wisdom, and even the best political solution (which presupposes only conformity) does not necessarily presuppose either reason or sanity.

Additionally, those biblical end times that you mock (aka 'memento mori') are coming to each & every one of us sooner or later, on an individual, gerontological, cultural & anticlimactic basis, just not in the overly dramatic manner described by most biblical & climate change cultists.

Either that or (plot summary) we, the few remaining humans, get stuck on a farm making coats for invalid chimpanzees, hoping against hope that our brain-waved post-human brethren will loan us an idiot wife to perpetuate our species, while our uplifted pigs plot their own bacon-based Bolshevik revolution.


Best.

Anonymous said...

Tacitus wrote: "IF it turns out to be flunkies, lets fire a few."

To that I would reply, if it turns out to be flunkies let's given them some adult supervision. IF it turns out to go into high levels of government then let's fire a few. Better yet jail a few. I am so tired of the powerful getting away with things that would get the common folk jailed for life.
Atomic Bill

Tony Fisk said...

Intelligence vs rationality was covered in Niven's depiction of protectors: great intellect subservient to the need to protect *their* breeder offspring. Priorly rational/civilised human protectors go to some lengths to thwart this instinct.

Tim H. said...

Ian, the article you linked to would indicate that most of what passed for business wisdom the last forty years was circuitous groupthink. No surprise.

CS McClellan/Catana said...

Don't forget that one side effect of Poul's brain wave was that it drove a lot of people insane. They couldn't deal with the changes in thinking that their suddenly higher intelligence forced on them.

Great book that nobody seems to have heard of.

Alfred Differ said...

Heh. I better get my 3-D printer now and set up to participate in the pressure cooker black market. 8)

If the legislators want to take homemade weaponry seriously, they will have to go after the composites industrial tools too. Pressure vessels are a bit of a pain to print, but with winding machines with carbon fiber spools it would be a little easier. Look at what some of the hobby rocket people can do and you'll see a path to home-brewed missiles.

Paul451 said...

Locumranch,
"but the same paranoid circular thinking evident in phrases like "Guns, 3D printers, pressure cookers & underwear must be banned because bad people can use them to do bad things" was also present in the recent METI argument about not sending messages to ET because bad aliens may then use that info to do bad things to us."

The argument against METI is based on accepting most of METI's own assumptions and merely following them to their logical conclusion. ("If there are enough civilisations for METI to work, there are enough to already be talking to each other. If they aren't, either they aren't here or they are hiding from something. Maybe we should shut up until we know more.")

The argument for regulating 3d printing is the opposite. It's as if we could hear a network of a hundred million civilisations that already talk to each other, and then someone says "Maybe we should be afraid of... some other unknown." You can't see the difference in the logic?

Guns already exist, and we already know what a zip-gun is and how many (or few) crimes they are used in. And we know that 3d printed guns aren't any better, stronger, more accurate or more powerful than a plastic gun made out of bulk plastic in a machine shop. (The latter would actually be better, because you can use high-strength high-temperature reinforced plastics that can't be extruded in a 3d printer.)

The "fear of the unknown" in 3d printed guns is the 3d printing, not the guns. The arguments to ban or regulate 3d printers is based entirely on panic.

agimarc said...

The Alaska Republican Party is in the latter stages of shaking out the Paulian funded attempted takeover of the state party apparatus in April 2012 at the state convention.

A bunch of outside funded Ron Paul fans, Occupy people (democrats), Palinistas and Joe Miller fans showed up at the District Conventions, won control of several districts and elected a slate of their friendly people to run the state party in 2012.

Since then, the rest of us removed their Chair and Vice Chair from office, mostly due to them both refusing to do the sorts of things required by Chairman and Vice Chairman to do (supporting Party nominees, leading fundraising for the Party, etc). The Chairman allowed that he did not support or vote for Romney for President last year. He also fundraised for Ron Paul following the Republican National Convention.

Their floor manager at the convention was one of the founders of the Alaska Green party, hardly a conservative or Alaska-friendly organization.

Alaska is not the only place this is happening, as the Paulians were doing this sort of thing at the state level in many states during district and state conventions with the hope of bouncing the nominee and replacing him with Ron Paul on the floor of the convention last year.

Intra-party fights are nothing new. This one is relatively minor, though noisy. One of the things about a small state is that everyone knows everyone, and memories last a long time. These folks came in swinging elbows. They have taken a few in return, which is to be expected. One ought not to show up and start blasting away and not expect to take return fire. Personally, I'd rather be thumping leftists than anyone else. Perhaps this is training camp or preseason.

You want to know more about the current festivities here in AK, you know where to find me. Cheers-

Ian Gould said...

"Guns already exist, and we already know what a zip-gun is and how many (or few) crimes they are used in. And we know that 3d printed guns aren't any better, stronger, more accurate or more powerful than a plastic gun made out of bulk plastic in a machine shop. "

Yet.

Still waiting to hear why it won't be possible to print AK 47's, chain-fed heavy machine guns, RPGs mortars or simple rockets.

David Dorais said...

The continuing successful predictive power of Heinlein/Campbell's Future History vis0avis this topic really astounds me. For those unaware of this connection may I recommend the short stories-"Coventry' and "If This Goes On". Like the Poul/Kornbluth short story "The Marching Morons"; we have a real crisis of lack of science accepting smart technocrats who instead may just be content to watch the destruction they allow as a will of God scenario. Nixon's Southern Strategy combined with the Democrat's monopoly of power between 1930 and 1970 has born us this fruit. Had the Democrats compromised more often even when they didn't need to we might not be in this bind. But a former union president(Reagan)thru will to power and greed made a devil's bargain with the radicals in the Republican party. For the past 30 years they thru gerrmandering have created the same dysfunctional power grab the Democrats flubbed before them. This is no way to truly govern-a reason so many pyrrically chose Anderson and Perot but failed in a third way until Clinton- but Clinton was to beholden to the liberals. Both power grabs in last century were based on the Rich not playing by the rules and not having laws even they could respect. What now? Barry is rapidly spinning in his grave. My mom knew him personally as a precinct committeewoman next door to his, and based just on what I overheard at the kitchen table gossip as a kid, Barry would not like these times...

Paul451 said...

Ian, you may want to do some research into 3d printing. It isn't what you are obviously imagining.

matthew said...

Blog post where a NSA whistleblower is alleging widespread blackmail of Congress and high racking military based on unlawfully gathered data. David, you've been waiting for this particular allegation, albeit thinking that the Saudis were the blackmailers.

http://www.washingtonsblog.com/2013/06/nsa-whistleblower-nsa-spying-on-and-blackmailing-high-level-government-officials-and-military-officers.html

Ian Gould said...

Fuuny, Paul, I'd say the exact same thing to you.

matthew said...

Here is the same source, claiming that then Senator Obama was wiretapped by the NSA in 2004. http://www.huffingtonpost.com/2013/06/20/russ-tice-nsa-obama_n_3473538.html

Duncan Cairncross said...

"Still waiting to hear why it won't be possible to print AK 47's, chain-fed heavy machine guns, RPGs mortars or simple rockets."

Yes it is possible!

The point is that a 3D printer is not a good fit for any of the above,
The simple machine tools I have in my shed are a much better fit for making those items

I can disassemble an engine using only a hammer and chisel
But it is much easier using a socket set

There has NOT been a plague of homemade guns using tools currently widely available
Why should there be a problem with a different and much less suitable tool becoming available?

Alfred Differ said...

Guns are far easier to purchase in the US than is the education that goes with the equipment for making them. It's not hard to understand. 8)

Rockets would work the same way except they are difficult to purchase fully assembled. I used to fly the HPR variety, though. The stuff that can be purchased is cheaper to buy than make.

matthew said...

Hmm, one big difference is that it takes skill to use machine tools to build stuff. With a 3D printer, once the technology is more mature, it should just take raw materials and a source file.
Granted that weapons, even Gatling guns, are by far from the most scary thing that could be manufactured with a mature 3D printer technology, especially in the USA where we have 300M guns already. In countries like the UK where gun ownership is rare it is much more frightening.
But here in the US, it is the hypothetical home biological assembler that really scares me.

Paul451 said...

Duncan,
"There has NOT been a plague of homemade guns using tools currently widely available"

Actually, it is pretty common. It's a common enough hobby, purely because it's so damn easy to make a zip-gun.

(For example, there's a classic design for a zip-shotgun. It requires just two perfectly standard metal pipes and a screw. Absolutely no machining required. You fire it like a bike-pump, and it is reusable and fairly quick to reload.)

There's just not much crime committed with home-made guns. So no one cares much.

3d printed guns, otoh, feel... magical. People who don't realise how easy it is to make better guns in your own shed panic and start imagining bizarre scenarios. (Like Ian's printable rocket launchers.)

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Ian said...

Fro those who think 3D printing is just a replacement for machine tools:

http://www.nature.com/nchem/journal/v4/n5/full/nchem.1313.html

Anonymous said...

With regard to the recent domestic-surveillance programs operated by the NSA and comparisons to 1984.
http://www.thedailybeast.com/newsweek/2013/06/19/sorry-we-re-not-living-in-orwell-s-1984.html

Jumper said...

It's hard to make an object with sufficient strength using inkjet methods. Whatever fluid is used must contribute to strength, not inhibit it. Metal powders don't bond spontaneously; they are usually pressed under multiple tons, and often in vacuum to defeat porosity. Kevlar is not manufacturable in bulk in situ; it generates acetone if memory serves, and the result must be re-compacted again under massive presses to be as strong as it is (or made into fibers and subsequently woven). Same with ceramics, the carrier fluid always leaves porosity. Ceramic is likely the route to durable strength, though.

Tacitus2 said...

On to another aspect of David's post.

I think most of us are pleased to see projections that the Federal debt is going down. But unless you are of the "debts don't matter" mindset (and it is a siren song to both left and right at times), constant vigilance is called for.

A couple of things worth pondering.

Right now the "cost" of borrowing for Uncle Sam, for smaller units of government and for you and I, is very low. Interest rates are negligable. (I mean that literally, as in, the sort of detail that gets neglected). This will change.

Rerun the numbers with interest rates of 7% and have some strong drink at hand.

But lets give credit where it is due, as the NPR article did...a combination of modest tax hikes and modest limitation of rate of growth of federal expenditures will improve debt. Each side loves to forget that they yielded a little on things...

But for worse, far worse news, look further down the food chain.

Detroit is effectively bankrupt. The NY Times ran an interesting article on the conflict between pension benefits and municipal bond holders. No winners possible...

http://www.nytimes.com/2013/06/18/business/in-embattled-detroit-no-talk-of-sharing-pain.html?pagewanted=all&_r=0

But even if you think one, the other, or both sides deserve a haircut down to scalp level, buried deep in the article is something really chilling...

"Municipal market participants are also rattled by a big, sudden increase in Mr. Orr’s measurement of Detroit’s pension shortfall, which he is also classifying as unsecured, leaving workers and bondholders to compete for whatever pool of money is left over. As of June 30, 2011, the city’s most recent actuarial snapshot showed that its two big pension funds were in pretty good shape — short by just $644 million, because the city had issued securities called “certificates of participation” in 2005 and 2006, and put the proceeds into the pension funds.

But Mr. Orr’s report said that estimated shortfall had been “substantially understated” through aggressive assumptions and other distortions. After correcting those, the two funds’ shortfall was closer to $3.5 billion."

Even before you start to discuss entitlement reforms on a national level you have to ask....how many more Detroit pension understatements are lurking out there?

I think....lots. Lots and lots. Notice how Detroit kept things looking rosy until the very moment that an outside "Czar" was appointed to look into things?

Tacitus

Jumper said...

http://gizmodo.com/why-3d-printing-is-overhyped-i-should-know-i-do-it-fo-508176750

David Brin said...

Tacitus said: "
But lets give credit where it is due, as the NPR article did...a combination of modest tax hikes and modest limitation of rate of growth of federal expenditures will improve debt. Each side loves to forget that they yielded a little on things…"

Sorry, man. I respect no one here more than you. But you do cling to "they are equally crazy" and I won't let it fly. A balance of taxes and cuts was the FIRST thing Obama and the dems put on the table. They were always in negotiation mode. The other side let it happen while screeching and kicking and wetting their pants like babies…

…and they are still at it. ONE more round of grownup negotiations would have re-assigned the sequester cuts more reasonably, while doing what ROMNEY proposed and limiting itemized deductions by the rich and removing insane subsidies of the fossil fuel industry and absentee mega-corp farming. That compromise is on the table and would not just reduce the deficit to bearable levels.

If it were accompanied by moderate spending on infrastructure and desperately needed bridge repairs, the high-velocity money flow would send us back into Bill Clinton mode and debt would be paid DOWN. There is only on reason this has not happened… while TEN repeals of Obamacare have passed the insane and gerrymander-empowered Republican House. Becvause they are stark… jibb-b-b-b-b-bering… insane./

Cite Detroit if you like… Things would have been vastly worse if the Goppers had succeeded in assassinating GM and blocking the new CAFE standards. Heck I'll throw in the entire Illinois Democratic machine. Want to add Boston? Fine! All of which is mild-to-normal American politics.

Sorry there is no equivalence. It is so not even close that one weeps.

Tacitus2 said...

David

Stop.

Re-read my post and then your reply.

Reflect.

Your respect for me appears to be no more genuine than your status (in Registration Only) as a Republican. You do not deign to consider the content of my posting, preferring simply to use it as a rhetorical foil.

Let us start over.

I make two points directly and one indirectly. You vaguely address one of them.

1. Current improved fiscal projections would look a great deal worse if the cost of borrowing were closer to historic norms. The Fed has, to date, kept interest rates low. I proposed you consider a fiscal world with 7% interest rates.
Discuss.

2. I indirectly mentioned entitlement reform. I fully credit you with the insight to realize that we have a horrendous demographic issue coming at us, made worse by the outrageous projected costs of healthcare. Discuss.

3. In no part of my post do I claim any sort of equivalence. Indeed, none can be claimed for my third point, that being that there are individual cities (probably states too) with festering financial sores. I suspected that many were being covered by bandaids. But on the matter of equivalency consider this list:

-- City of San Bernardino, Calif.
-- Town of Mammoth Lakes, Calf. (Dismissed)
-- City of Stockton, Calif.
-- Jefferson County, Ala.
-- City of Harrisburg, Pa. (Dismissed)
-- City of Central Falls, R.I.
-- Boise County, Idaho (Dismissed)

These are the to date municipal/county bankruptcies since 2010. One is in a red state, Idaho. If you look closely at it you will find pure, non partisan boneheaded activity. Mammoth Lakes is also a special case, they lost a lawsuit.

The other five are Deeply Democrat places. And shall we add Bell California? Detroit? Probably the State of Illinois?

You have put forward recently a theory that something in the makeup of the modern GOP, religious fervor I guess, renders them blind to climate change as a pressing issue.

I would counter with the theory, and I welcome discussion, that the Ward Politics machines of the Democratic party lend themselves to fiscal ruin...with the expectation that I, Tacitus, will be bailing them out.

I put this forward as an interesting topic for discussion.

No all caps needed. No shrieking, jibbering or bodily incontinence is called for.

And to address one of your points - yes, I can get sidetracked as well - some Republicans have indicated that the Administration does not negotiate in good faith.

Oh, and another thing...those bridges were supposed to be fixed by the Stimulus. Was it perhaps misspent? Lets have an accounting.

But thanks for not mentioning tainted meat. That would have jumped the shark!

Pugnaciously yours

Tacitus

marvelous! the captcha is "your demnote"! A reference to Detroit bonds I suppose.

Tacitus2 said...

A brief semi correction. Jefferson County AL is clearly in a red state. It (Birmingham) is in fact a drop of blue in a swath of red.

Tacitus

Duncan Cairncross said...

I really really hate the way pensions are funded in the USA

When I go to work at a job with a pension from my first day at work there is a pension liability
I have done my day at work I am entitled to my contracted pension (eventually)

The correct thing to do is for my employer to deposit the correct amount of money with a separate pension fund at the same time as it pays my wages
The amount can be calculated - when the pension funds are doing well the employer can take a "pension holiday" - when they are doing badly the employer may need to add an additional top up

In most of the world it MUST be done that way.

This means that there is NO ongoing drain on the company (or council)funds

Running this way would fix most of the city and state problems

Additionally - most local government owns a lot of infrastructure - none of it lasts forever - This infrastructure MUST have its repair and replacement costs on the books.

Here in NZ the central government requires local government to report this.
A council may choose not to fund repairs and replacement BUT this decision is out in the open and will effect the next elections

Robert said...

Once upon a time, I belonged to an e-mail group called "PaganHome" - it was akin to a ListServ in which a virtual community would discuss topics pagan-related. I joined it primarily for research into pagan-related topics as a character I'd created was pagan... and over time grew interested in paganism and the concepts of magic.

Over time, I came to realize something as I'd have to defense Christians from the more vehement of the virtual community: the more religious the pagan came from, the more anti-Christian they became when they broke free.

Dr. Brin is showing this same level of vehemence. I recognize it because I notice the same tendencies in myself concerning the Republican Party.

Part of this may come from a sense of "betrayal" - Republicans have betrayed what we considered to be core foundation elements of what it is to be Republican. And we cannot comprehend why everyone else doesn't just open their eyes and "see the truth."

I do try to keep this tendency of mine under control. It helps that I'm still anti-Democratic Party, and run into several Leftist nuts over in Facebook (along with a conservative who might make Tacitus seem moderate in comparison).

(The one thing I do find amusing is the Republican never did answer my question: do they feel hospitals should deny service to poor people who cannot pay for medical care? The Republican instead went on about how he was living in poverty and all of that. Stuff I already knew, as he's a webcartoonist and I've followed him for years.)

Rob H.

Alex Tolley said...

@Tacitus
Right now the "cost" of borrowing for Uncle Sam, for smaller units of government and for you and I, is very low. Interest rates are negligable. (I mean that literally, as in, the sort of detail that gets neglected). This will change.

Rerun the numbers with interest rates of 7% and have some strong drink at hand.


A 30 yr TIPS with ~ 1% interest is a long time horizon. You only need to care about rates at 7% if you need to rollover the debt in 30 years. In the meantime, you have cheap funds to stimulate the economy and grow the pie. How is your forecasting tool for the US economy in 30 years? Growing the economy with cheap funding is almost a no-brainer.

David Brin said...

Tacitus you are arguing by cherrypicked anecdotes. A majority of bankrupt cites are dem led bcause by far a majority of CITIES are dem led. Including the most vibrant and thriving and well-led, like LA. And California which is the nation's best-led state.

The stimulus was only 2/3 funded... the part that went to bailing out banks and Wall Street. The part that would have sent unemployed people doing infrastructure repair and spending high velocity funds was torpedoed by you know very well whom.

Pleeez do not talk about "bailing out." Every year, red states such in 3 dollars from Uncle Sam for every two dollars they send in. This goes on and on and one - good times and bad. Meanwhile the GM, Chrysler and even Fannie and Freddie and AIG bailouts are paying back at-minimum 2/3 of the money spent so it is exactly the same only it kep the economy from tanking.

Some folks SAY the dems can't be negotiated with? Some SAY that... and that's evidence of what?

Dig it, when Obama entered office, did he try to resurrect Hillary's Health care proposal? Or any past Dem proposals? Or Richard Nixon's "socialist" one? No. He plopped onto the table the exact proposal taken from the 1996 Republican Party Platform. The only mods were taken from Mitt Romney's slightly altered version in Mass.

Um... that is called negotiation. To take the other party's own plan and say "let's start from there. Any suggestions?" The reply was ZERO discussion of fixes or amendments, only screeches of communism.

Dig it: any current flaws in Obamacare are the fault of the opposition party for not even trying to find errors and tweak it to make it better.

Paul451 said...

The first message to be transmitted by Loan Signal has been chosen.

http://kimasendorf.com/first-gif-sent-into-deep-space/

Yeah.

Alfred Differ said...

Sorry. I live in California too and I'm not inclined to think of this place as well run in the financial sense. We've got a lot of underfunded pension promises to public safety officers I don't think our cities and counties can meet without taxpayer help. They bet too much on the kind of growth we get during bubbles and that's not wise governance.

We've also got a situation where the cost of higher education is suffering hyperinflation. Ugh. I actually had to explain to my boss today that I'm probably part of the last generation to get out of school without crushing loans because he was surprised I didn't have any. Heads should roll.

Ian said...

In all honesty, the US should be issuing perpetual notes currently.

http://en.wikipedia.org/wiki/Perpetual_bond

http://en.wikipedia.org/wiki/Consols

Ian said...

"The Fed has, to date, kept interest rates low. I proposed you consider a fiscal world with 7% interest rates."

Real or nominal?

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=reallongtermrateAll

Ian said...

You might also want to ask yourself what impact rising stock and real estate prices have on the net position of pension funds.

Which might also make you want to question the appropriateness of mark-to-market accounting fro long-term assets being held to maturity.

Tacitus2 said...

Taking things in order:

Robert. I can't say if David's vehemence is that of the Faithful Fallen Away. Maybe. I would also not discount the notion that an Obama Second Term just has to be hard on progressive folks...there was always a disconnect between the giddy idealism of campaign '08 and reality. And second terms are so often harsh...

Ian and Alex T. Good points, and areas where I cannot claim expertise. I hope to encourage discussion. Regards the impact on municipalities of a rising stock market I suspect a mixed picture. If your underfunded pension obligations benefit from a good year on the market, great! But to some extent the market increase has been the mirror image of the bond market's low interest rates. Risky as it is, the stock market has been the only game in town. If interest rates rise you could in theory have the double whammy of a falling equities market and higher costs of borrowing. Yikes.

Note please that I am still a hard working member of the 99%, were I a Master of the Universe it would not be thus.

David. You are doing better. You still seem to feel this primal need to make those with whom you disagree into "screechers". Baby steps.

Cherry picking...hmmm.

Most recent info I can find this fine morning is that the current underfunding of the 100 largest public pensions was 1.2 trillion dollars in October

http://articles.chicagotribune.com/2012-10-15/business/chi-underfunding-estimates-in-line-with-previous-studies-20121015_1_public-pensions-pension-funds-pension-systems

This number is roughly the size of the largest recent US deficit, 1.4 trill in 2009. This estimate of course excludes a lot of smaller entities. And it assumes a rate of investment return of 7.65%. Over the last five years, including some darn good market years, the actual return has been 3.2%. But looking ahead, who knows?

The Big Dog, CalPers is currently using 7.5% as a projection. To their credit there is discussion of dropping in a few basis points.

I don't want to wade into the mess that is our current Affordable Care Act, other than to say that it is unlikely to be Affordable.

And as to whether a botched end result is due to negotiating in bad faith, or to negotiating ineptly, or to nefarious opposition....you can argue each position. And they are not mutually exclusive.

I hope this overview featuring, you know, actual numbers, is of some interest to folks.

Tacitus

Trying to find what % projections Detroit was using I failed...but found this. Ouch.

http://www.freep.com/article/20130620/NEWS01/306200120/Detroit-pension-fund-corruption

ok, that is cherry picking. but a cautionary tale to be sure...

locumranch said...

Missing the elephant in the room, you fine fellows are. You're assuming that most economic indicators are valid.

Interest rates are arbitrary rather than rational, as indicated by LIBOR the credit industry & the Fed. Financial rating institutions like S&P 500 & Moody award their bounties according to graft & payola rather than any rational formula. And, most statistical economic indicators like GDP represent non-comparable nonsense as their definitions, formulas & components change on a minute by minute basis to support the policies & desires of the ruling hegemony, making the very concept of 'valuation' intellectually suspect.

Furthermore, most of our most time-honoured financial institutions, including the Stock Market, Social Security, the entire insurance industry & most pension plans are merely Ponzi schemes whose health & well-being depends on an ever-increasing flow of monies from new investors, either paying off its investors from their own money or the money paid by subsequent investors.

The financial community likes to refer to this Ponzi component as 'economic growth', which is why our global economic house of cards tends to collapse when 'percentage growth' (aka 'an increasingly flow of monies from investors') drops below certain arbitrary level. This is also why we tend to refer to periods of financial stability (Zero Growth) as an economic 'depression'.

Instead of discussing this very real & imminent Ponzi-related demographic apocalypse, you choose to argue across partisan lines, either favoring the Reps (who pay of their 'investors' with 'Cash Now') or the Dems (who pay off their investors with social programs in lieu of cash).

I tend to favour the Dems in this regard because the term 'society' is defined in terms of (social) programs of 'mutual interest', but I'm a pedantic cuss.



Best.

Alex Tolley said...

@locumranch
most of our most time-honoured financial institutions, including the Stock Market, Social Security, the entire insurance industry & most pension plans are merely Ponzi schemes whose health & well-being depends on an ever-increasing flow of monies from new investors

You really have no idea what you are talking about. Whenever I read Ponzi scheme in the same sentence as stock market I know the writer has been watching those wingnut advertisement videos to sell a book or investment advice.

Tacitus2 said...

Ponzi scheme is of course, too strong. But in my initial post on the matter you will notice the "revised" estimate of Detroit's pension shortfall from 644 mill to 3.5 billion dollars. There are other kinds of fraud than Ponzi schemes.

My question was, how many more Detroits are out there.

Tacitus

J. Daniel Sawyer said...

David --

Some fodder for your leaks article. Obama has instituted an "Insider Threat" snitch program in all Federal departments, and the details are not conducive to transparency, democracy, or accountability:

http://digbysblog.blogspot.com/2013/06/this-really-is-big-brother-leak-nobodys.html

-Dan

Ian said...

"Most recent info I can find this fine morning is that the current underfunding of the 100 largest public pensions was 1.2 trillion dollars in October

http://articles.chicagotribune.com/2012-10-15/business/chi-underfunding-estimates-in-line-with-previous-studies-20121015_1_public-pensions-pension-funds-pension-systems

This number is roughly the size of the largest recent US deficit, 1.4 trill in 2009. This estimate of course excludes a lot of smaller entities. And it assumes a rate of investment return of 7.65%. Over the last five years, including some darn good market years, the actual return has been 3.2%. But looking ahead, who knows?"

Tacitus, you realize that those liabilities come due at varying points up to 50 years in the future?

If Americans are really concerned about the state of public pension funds, I'd suggest allowing those funds to insure with the Pension Benefit Guarantee Corporation.

Ian said...

It looks like Moore's Law may have gotten a new lease on life:

http://phys.org/news/2013-06-harnessing-potential-quantum-tunneling-transistors.html

Paul451 said...

And then there's Modern Monetary Theory or Chartalism, which dismisses the idea of public debt as a political fiction left over from the era of fixed currencies. Governments create money, they don't (indeed can't) have debt. "Treasuries" are just a way to gift funds to private savers. Likewise there's no such thing as an "unfunded" public pension liability. The only policy worry is how quickly you print new money, based on its effects on the economy; too slow and you get deflation or stagnation and unemployment, too fast and you get unhealthy inflation, but you need a minimum amount of inflation for the economy to function. Hence their are no true government "deficits", and a government "surplus" is actually a drawing on private net savings and is only necessary when combating excessive inflation. (Likewise, taxes are not a means to raise funds for government spending, but are purely a regulatory mechanism.)

I'm not advocating MMT, I just like that someone occasionally pokes at our core assumptions just to see what happens. (This being Contrary, and all that.)

Duncan Cairncross said...

Likewise there's no such thing as an "unfunded" public pension liability.

This is true for sovereign governments - not for local government which does not have control of its money supply

Sounds like the economics in Heinlein's Beyond This Horizon