Wednesday, September 15, 2010

What the end of record debt levels means

"Record High Debt Levels". "Too much credit card debt". "Crushing Student Loan Debt". Rinse and repeat, ad nauseum.

Every "debt" is someone else's "asset". Your liability is their wealth. Period. There is ALWAYS someone on the other side of the trade! If you buy a can of soda, you have, in fact, gone long soda and short the cash you paid for the soda (although not a perfect analogy... after all, you can't get much for used soda...).

All the screaming by certain groups that "the rich have only gotten richer while the poor have only increased their debt" is a f***ing mathematical necessity! Our banking and financial system operates on a fractional-reserve system! On the other hand, as the debts are either a: paid off, or b: defaulted on, this phenomenon will reverse (again, by mathematical necessity).

Since the process of wealth concentration will absolutely, positively reverse itself in the natural order of things, and since you can be certain that TPTB on the Left know this too... why do they moan so lugubriously about wealth distribution? And why is a Liberal Administration so concerned with the redistribution of wealth attempting to support the housing market (supplier of the greatest amount of credit that becomes the wealth of others)?

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Libertarians can only be embarrassed at the primary victory of Delaware's Christine O'Donnell. The last thing the country needs is a Senator concerned with the level of masturbation in our society. This kind of candidate is exactly what the 2h1p needs to torpedo what was a Libertarian insurgency in the Republican party. Delaware, what have you done?

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Here is fairly perfect example by Michael Yates of an excellent observation and description of a problematic issue, followed by a silly, politically motivated explanation. Yates accurately recounts the sad fact that Americans in fly-over-land WERE a proud people that have morphed over the past 30 years into blubberously over-medicated zombies.

Let me end this essay with a provocation. There is a dirty little secret of life in the United States. We hear from politicians and pundits in the media that there is a “real America” out there, of small towns in the “heartland” of the country full of hardworking and God-fearing men and women with the same heroic qualities as the founding fathers. But when you go to these places, you find something different: dead and ugly downtowns, empty streets, shabby houses, limited job opportunities, poor services and social amenities, pathetic newspapers, and second-rate schools. Such towns stifle creativity and broadmindedness. For many people, life in the heartland is harsh and boring. They compensate with alcohol, drugs, and food. The food available to them, in both grocery stores and restaurants, is of generally poor quality. Alice Waters, the famous Berkeley chef and fresh-food guru, claims that anyone can eat good food, anywhere in the country. I’d like to see her do this while living in Ely, Nevada, with a crappy job and not enough money. There is one grocery store, and what is available in it won’t tickle Alice’s palate. We did see organic red peppers in the produce section; they were $6.99 apiece. What would you do if you were a mother with three kids and a husband—feed the family red peppers or the forty-four servings of Kraft macaroni and cheese she could buy for the price of a single pepper? There is a good chance that, given the poor education she likely endured, she might not know how to shop efficiently by comparing unit prices. She might not know which ingredients in what she buys are good for her and which are not. She and her family have been subjected to such massive amounts of advertising for fast food (and this is what is probably served in the school cafeterias) that it is not surprising that they eat many meals at McDonalds and Taco Bell. When she is at home or at her low-wage, stressful job while the children area in school, would it be surprising if she eats too much? That she and her husband drink too much? Or take prescription painkillers or antidepressants, both of which will slow their metabolisms and make them more likely to gain weight? Will stress, strain, and boredom make them rush to the gym to exercise, or take a long hike?

Got that? Politically incorrect but not inaccurate.

The problem with people like Yates is that they somehow believe that life can somehow be made entirely fair - and that the effort to do so must come from The State.

U.S. capitalism is vicious and inhumane. It is the model of a dog-eat-dog world, nasty and brutish. It produces physically and mentally unhealthy human beings. No wonder we are fat. As the country enters a prolonged period of economic and political stagnation, look for matters to get worse.
See? All we gotta do is get rid of smart people, lucky people, good looking people, talented people, motivated people, frugal and thrifty people.... and all of our problems will be solved. Life will be fair, people won't be fat, stressed, depressed... if we would just fund a program for the "Fairness Police". Oddly enough, I found this article on ENergybulletin.net, the Peak Oil's communist wing and blog.

I have a question of the nice folks at and contributing to that August body: Why is it you folks publish article after article favorably reviewing the lifestyles of the Old Order Amish and Mennonites? These groups reject government intervention and DO NOT pay into the U.S. Social Security and Medicare systems, they are Pro-Life in the extreme, they take Libertarianism to the out- limits, breed like rabbits, are Patriarchal (their women wear the equivalent of head scarves for pete's sake), believe the earth is 4,000 years old and creationism to the letter...

I must say, I admire them to. All except for their idea of hygiene, heavy clothing during heat waves, and very dirty bare feet (when its hot, they go barefoot...).

So how is it that that the Amish gain the approval of the "Yates Political Spectrum" and any and all of their compatriots on the Left, but the elephantine dolts do not earn their disapproval? Did we go from "The Devil made me do it" to "the Corporation made me do it"? Is ANYBODY responsible for ANYTHING? (Well, other than corporate men and their "unending sexual harassment" of those poor women at the Anti-Christ, er, Goldman Sachs?)






48 comments:

Dextred1 said...

I don't know about O’Donnell, I guess the news has blown that race up now. I like not having a TV. In the adolescence psychology class I took everyone masturbates, well at least 90% of everyone :).

I did not comment on the inflation/deflation/peak articles because I have been reading gibbons view on the fall of Rome.

Historian Edward Gibbons’ five reasons for the decline and fall of Rome

1) The undermining of the dignity and sanctity of the home, which is the basis of human society.
2) Higher and higher taxes; the spending of public money for free bread and circuses for the populace.
3) The mad craze for pleasure; sports becoming every year more exciting, more brutal, more immoral.
4) The building of great armaments when the great enemy was within; the decay of individual responsibility.
5) The decay of religion, fading into a mere form, losing touch with life, losing power to guide the people.

All of these debates boil down to these 5 points today. Peak oil is not that big of a deal if the culture is already failing. Who cares if it is inflation or deflation? Only investors, Greg you have told us to enjoy ourselves now. Point being that these other ancillary issues are nothing but a result of the ones mentioned above. Our culture is failing, our schools are failing, our borders have failed, the family unit has collapsed (soon the whole nation will resemble the black community with few fathers, government handouts and loss of morals) our pension system is failing, our corporations are moving out, public sector unions are collapsing states, the military spends way to much when the enemy is spending, religion has become mega churches, food is Mickey d Wendy’s and taco bell, our colleges are failing, both parties are pathetic, the constitution is toilet paper and perversion has replaced individual responsibility.

bureaucrat said...

I'm afraid the baby boomers have crafted the world as it is today .. full of disappointment. Some would say we need to rise up like the French, and march and protest and scream for our rights, and our diminishing part of the pie. We need to electrify those little towns full of pathology and nothingness. We need to become human again. We need to cause trouble.

But sadly, the generation running America right now, who came of age in the 1960s, who protested everything that moved, and caused more trouble than anyone ever had, with their drugs and free love and sitting around talking about "Naked Lunch," is running the show now and taking no prisoners.

Those hippies became neo-Republicans, and invented the system we now live in. They went from pantywaist liberals to hardcore, we-deserve-everything-we-get, the-hard-line-is-the-best-line, 2.1 kid parents. They are now the country's bosses.

And what have the bosses invented? Computer applications that monitor us and squeeze every penny of profit out, inhuman call centers, 60 character passwords, the security guard state, ID cards hanging on us like cattle, the "lawyering" of everything, zero-tolerance policies, children that are just as anal-retentive and school-grade-obsessed as possible, and on and on ..

So please don't cry for me, Argentina, for the lack of "energy" these days, and the unfortunate stomping on the necks of the common folk.

You all got what you wanted, you people born between 1946 and 1964. It is now Baby Boomer Nation.

But youll get older .. soon ... I pray for you.

Greg T. Jeffers said...

Dex:

I can just see the late night comedians now...

Clearly, she has not met my urologist...

Greg T. Jeffers said...

Bur:

WHat have you been smokin'?! WHatever it is, I LIKE it.

THough I cannot say that all of that was a plan... more likely an unfortunate evolution... yet, the fact that somebody is NOTICING that evolution gives us an opportunity to undo it, or at least undo the bad parts for our own lives.

Greg T. Jeffers said...

Dex:

I NEVER watch TV any more. EVER. It has been 2 years since I watched CNBC... what a waste of the minutes of your life watching that POS.

Nah... I am a web guy. Reading O'Donnell's background one can only hope she gets demolished and the reformist Repubs get a message.

Anonymous said...

Doesn't anybody get tired of lazy folks always using broad brush strokes to characterize the ENTIRE 80 millions people who were born between 46 and 64?

Boomers comprise a widely diverse section of the nation. Don't you think that someone born in Alabama in 1946 would be totally different from somebody born in Berkeley CA in 1964? Don't you think that the son of laid-off auto worker in Detroit would be really different from the daughter of a Boston old money banker?

Boomers comprise quite a wide spectrum- from Vietnam Vets to hippies, religious fundamentalists to athiests, blue collar workers to rocket scientists, Reagan warriors to PETA. Some have long been proponents of the "simple life" while others are devoted techno-optimists.

And actually, this idea of rigid generational identifies defies common sense. Aren't babies born continuously every single day? They don't all get born just on the 30year mark.

Three million boomers fought and in the Vietnam War and 55,000 died. Boomers fought Gulf War I. Boomers designed and developed the Internet. Boomers provided the funds for the present huge numbers of Gen X or Y? to go to college. Boomers have paid huge amounts of taxes to provide for the luxurious retirements of the "greatest generation"- many of who were triple dippers- re collecting SS, military pension, and private pensions.

And just for a reality check- the Interstate Highway System, automotive commuting, shopping centers, and extreme consumerism were all trends that were well in place when Boomers were kids.

Just a few things to keep in mind when trashing the whole group of 80 million people.

Cheers, Marshall

Anonymous said...

Thanks, Marshall.

Note also that the Boomers all became Republicans for the sole purpose of oppressing Bur.

The world as we know it is coming undone in more ways than just financially. But, life in flyover country is not that much more or less gratifying or fulfilling than it was 50 or 100 years ago. All be it that many areas are poorer than they were 50 years ago and possibly richer than 100. What have changed are expectations.

There are two sources for this, although the medium of delivery is shared. First is marketing. We are pumped full of images every day of houses, cars, vacations and men and women, all prettier, faster, more extravagant than will ever exist in real life. We can't live up to it, nor can those we come in contact with ever live up to our expectations, as set by the media solely for the purpose of selling us stuff.

Second, is the Left, that has been chipping away at the concepts of responsibility and self reliance for the last hundred years. Everyone is a victim. Therefor everyone is a loser. But, the government can punish those bad folks. The government can be responsible for the mess people make when they're irresponsible. It can happen to anyone....

Combine the two forces and you produce a lot of people that believe:

1. I'm a loser.
2. I can't succeed.
3. Everyone that I associate with is also a loser. (spouse, kids)
4. There is nothing anyone can do about it. Life is hopeless.
5. It is someone else's fault.
6. Have another beer.


Regards,

Coal Guy

Anonymous said...

There is general dissatisfaction in a land of plenty. How will people react as thing get worse?

Regards,

Coal Guy

bureaucrat said...

I'm talking to the decision-making baby boomers .. the bosses who see a terrorist behind every tree, who see not one good reason not to borrow yet another $million, and who are slowly strangling us.

Hell, it's not just me. The Baby Boomers themselves are writing online apology letters to their children for mucking things up, and making the next generations unable to have a better living standard.

That's why you have so many people mad and doing nothing about it -- stagnating and fuming and voting for "big nothings" like Tea Party candidates. We've been sold down the river by "thems in charge."

Dextred1 said...

Jeffers,

Have you read anything about that hot reporter that was pissed that the jets players were giving her cat calls when she went in the locker room after the game, did I mention they are football players and not priests. She then goes and cries on TV that she was a sex object. Watched some of her faux outrage on YouTube, then the feminist faux outrage in letters to the jets and NFL. Duh, your hot and dress like a Sl*t, what did you think was going to happen. I always tell my wife’s friends to act like they want to be treated; act like a sl*t and you will get treated like one, act like a prize and men will fight for you.

Anonymous said...

If you look back at this, it started in the mid 70's. It took 35 years of de-industrialization and asset inflation to make this mess. Federal policy has been all about kicking the can down the road. Perhaps there was no other politically acceptable course available. We are each responsible for our own debt in the end.

Regards,

Coal Guy

Anonymous said...

Bur,

I'll agree with one thing, the Hippie Generation have been raising hell for the last 40 years. Those born after 1953 or so, were too young for most of that.

Regards,

Coal Guy

Phil23 said...

I wouldn't glamourize the life of the Amish, particularly their children, an increasing number of whom suffer from incurable genetic deformities from generations of inbreeding. And organic farming is great if you can afford it, but unfortunately it is far too risky for someone without any other source of income. The Amish are exceedingly poor, and many of them fail to receive proper medical care.
Poverty rates are higher in the United states than they ever have been as the quality of life continues to deteriorate for most citizens of the US. We are developing a permanently poor and angry underclass, many of whom will develop schizophrenic voting patterns of chosing which ever candidate offers fast easy sounding solutions to their problems. Thus the birth of the tea party.
Consider who has been running the country since 1980. 2/3 of that time we have had a Republican president. What direction has the country been going in since 1980? Do you really think the GOP is going to lead the US back to prosperity? What suggestions do they have beside cutting taxes? You need far more than that - we need trillions of dollars of investment in infrastructure, education, and technology - and we are left carrying the debt and the dead bodies of GWB's war in Iraq. yeah, good going Republicans. Thanks alot.

PioneerPreppy said...

You can't really blame the boomers for this mess.

They were sold a bill of goods same as those of us born after 1964. Sure they ate it up and they were the ones who voted for it but they were simply the testing ground for massive population manipulation.

It was the greatest generation that sold us out and they were just building off the massive exploitations of the generation(s) before them.

Currency manipulation and social engineering came of it's own after the civil war and culminated in the Greatest Generation who are really just now giving up power. There are even a few still around as judges and such.

The poor boomers were really let loose with no social skills, no limits set, no ethics and lies some of them still believe.

Hell a number of them still think we are on the gold standard and that any man has a right to a free attorney.

Most but not all of them lived their lives in blind bliss and let the greatest generation have it's way with things.

Let's not forget the boomers are only just now retiring. They are gonna be screwed same as Gen X before it is done. The only generation to really benefit from all this social engineering is the Greatest Generation.

Anonymous said...

Greg:

"Every "debt" is someone else's "asset". Your liability is their wealth. Period. "

Your words, not mine. Now apply that to the gubbermint deficit...all the T-Bills and consider it the savings of all the people that own them. As to the foreigners, since they are denominated in dollars, guess where they have to spend those dollars? That is unless they want to flood the FX markets and take that hit.
That government debt represents the wealth of America or the wealth that will be returned to America by foreigners.
Think about it. That's one of the first facts of MMT.
Read Warren Mosler, a money guy, and his "7 Deadly Innocent Frauds of Economic Policy".
MMT guy

Dan said...

So, the reform candidate has done nothing but political advocacy her entire life! WTF! The whole masturbation thing reminds me of Joycelyn Elders.

Maybe I should go long Kellogg. They make Graham crackers ya know.

Donal Lang said...

Greg; re the debt is an asset/fractional reserve situation; you gloss over the fact that if about 10% of the debt goes bad the system collapses.

I wonder what percentage has already gone bad?

Re; O'Donnell, the people get the politicians they deserve! You'll recall my previous comment that the Tea Party will drive the Republicans even further into the political wilderness, where only crazies will vote for them. The proof came quicker than I expected and the Democrats must be over the moon!

And look, here comes Sarah! :-)

And re; the American heartland; you expect people to get off their fat arses and take control of their lives, education, diet and medication. I which particular Golden Age did that actually happen?

We all know that the reason we have had such technological breakthroughs in the babyboomer years is because a small percentage of the population have benefitted hugely from the opportunities presented by the wealth of fossil fuels, primarily education and investment money. Most of the rest, the sheeple, have just been the beneficiaries of raised expecations of middle-classdom, handouts and free lunches (which we're now paying for).

But those people that genuinely 'made good' HAVEN'T been some elite; they have come from all segments of society, all backgrounds, all ethnicities, all countries.

The one obvious conclusion is that if you give ANY society the opportunities for good diet, healthcare and education, you will end up with a few ambitious, capable, brilliant people who'll excell (and the remainder will be sheeple).

This leads me to two further conclusions:
America would be better spending its education budget on those who are ambitious; immigrants for example, or even operate developing-world technology schools and fast-track immigration applications from their best pupils (like the French colonial schools did in the 1800's).

The second is that inherited wealth just steals assets from the rest of society. I've met many sons and daughters of successful businessmen and I'd guess barely 5% actually do anything useful or creative with their lives; most just spend their inherited money in variously useless or destructive ways. Better to give the money to those better able to do something creative with it. (No, NOT Goldman Sachs!)

And stop blaming the sheeple, any more than you blame sheep for quietly trotting into the slaughterhouse. They genuinely know not what they do.

"We, the Sheeple...."?

Anonymous said...

Donal,

You give the sheeple much less credit than they are due. People will rise to the occasion, or sink to the lowest common denominator depending on how they are treated. You are and elitist, and believe that your ideas should be imposed on the rest of us. No thank you, I'll think for myself.

As for Christine O'Donnell, I happen not to agree with most of the views that have been published. She has promised to keep her religious and personal views personal, and support the Constitution. That is all one can ask. It is called tolerance. There are, absolutely, personal views of every candidate running for office the every one of us may take exception to. She has made the mistake of expressing them in public. There are many things about many people that I do not like. Some I consider disgusting. But, what they do is none of my business, and certainly not the Government's business either. It is called tolerance. Tolerance is necessary of we are to maintain freedom. This is where both the Left and the Right leave me cold. Both are interested in regulating my private life. Especially the left, with its huge social experimentation.

If she actually keeps to her promise, then I can set her wacky views aside. Considering her activist past, this is somewhat doubtful. She is certainly a fiscal conservative, and may do some good on that front. It is odd that so many support the status quo, when the path we are on now leads to certain collapse. The 2H1P boys ought to be scared $#!Tless. The jig is up. The sheeple have figured it out.

Let's go back to Dex's post a the top, and the five reasons for the fall of Rome.

1. She believes in the sanctity of the home.

2. She believes in lower taxes and smaller government.

3. She believes in self control and personal responsibility.

4. Don't know her views here.

5. She has a true faith, even if I disagree with many of her views.

Perhaps the negative reaction is prompted by the constant conditioning we receive from the media to distrust any of this.

Regards,

Coal Guy

Donal Lang said...

CoalMan-
What you seem to be saying is that any crazy will get your vote provided; the medication works ok most of the time when they're in public, and, they trained up to spout REPUBLICAN propaganda!

I hope you're joking!!! (but I suspect not).

Meanwhile, all those 'whacky views' as you so delicately put it, are the reason why even most sheeple will recognise she's sufficiently nuts to go vote for a Democrat.

So tell me CoalMan; what about all those views YOU hold in private??? Want to tell us all about it?

Dextred1 said...

Donal,

You do realize that there are literally 435 races in the house and 33 in the senate right. You do realize that republicans have the highest voter affiliation ever. Pulling the party to the right would not hurt them. Whenever they have been too moderate the democrats win. Poll after poll shows that Americans identify overwhelming with the conservative message, not so much with the republican message. On the same hand, this is constitutional federal republic. Republicans in certain areas are going to be very liberal (California, New York and the east coast in general) others from the center of the country will be more conservative. You are an asshat if you think that dems are any better. If the choice is between abortion and masturbation, I vote against abortion. If the election is about big government or small government, I vote small government. No candidate’s viability should be based on one issue. In the totality of views I am a conservative. Does that mean I want to regulate masturbation, of course not? In this world there is the idea of perfection and the constraints of reality.

What exactly do the democrats represent to you? Abortion rights, destruction of gun rights, big governments, bloated beauracry, high taxes, destruction of property rights, policies that destroy families, Christian bigotry. So you say republicans have bad views, no shit. You are the master of the obvious. The party is made up of 40 plus regular voters and millions of swing voters. Parties move flip flop like people do.

talnik said...

You're right about O'Donnell. She's a threat to the power elite that are sucking the Treasury dry. Find something odd she said and DESTROY HER, SHEEPLE!!!!!!!!!! OBEY!!!

PioneerPreppy said...

LOL how can anyone support the current tax evading, pork giving, scholarship hording, green job worshiping, social engineering democrats and then condemn O'Donnell with a straight face?

Dextred1 said...

Phil 23,

You do realize that using the presidents is a terrible statistical analysis. First we have a government of separated powers (just in case you did not know :). We have this nifty little panel called congress which has been controlled by the democrats most of the time, others times by republicans and sometimes split like Reagan’s first term and bushes first term. You did know that the republicans controlled congress when Clinton was in office. That they were the ones that shut down the federal government over spending, initiated welfare reform, etc... You did know that the senate was controlled by the dems the first two yrs of the bush era. You did know the house and senate were democratic in bush’s last 2 yrs. The funny thing is I did not like bush all that much, but I am forced to defend him because people are just f*****G clueless. Did Obama pull us out of Iraq? What about Afghanistan? What about about him saving his union bro’s. What about the two biggest budgets in US history under democrats. As much as everyone says the wars cost, it is around 800 billion dollars over 8 yrs, we have run up 1.5 trillion est. this fiscal yr. You can not count general military budget as part of war expenses(these expenses are annual and supported by both parties) I think you have totally missed the point of this whole yr. If these are the same republicans then they will fail, but maybe just maybe the hard edged fiscal side of the party along with new strength from the libertarian minded folks can lead them in a new direction. When you are always looking to the past, you will never see the future.
Your quote
“We need trillions of dollars of investment in infrastructure, education, and technology”
IF you missed it, Japan tried this and now has a government debt equal to 300% plus of Gdp. Are you insinuating that we just need to redirect all this spending from war and other things to your desired pet projects? How do you not see that your plan will bankrupt us to? Education is not profitable in a vacuum. What kind of education? That term has no meaning unless utilized in the specific. There have been many studies that have shown on the job training is more than comparable to university education. I assume you mean we need to waste money on more green jobs that steal money from taxpayers to fund their businesses that fail in five yr. Let me make this point clear, when they produce things at a price that competes with traditional power sources they will gain customers, if they produce overly expensive, unreliable and raw material heavy energy it will fail every time. What kind of infrastructure? More roads? Maybe government building to house more government employees?

Anonymous said...

Christine O'Donnell's view of masturbation is right in line with that of the Roman Catholic Church. If she is a wacko, so are hundreds of millions of Roman Catholics. I don't subscribe myself, but the policy probably helps to keep the confessionals busy.

Regards,

Coal Guy

Anonymous said...

Donal,

That is none of your business, just as your personal life is none of mine.

Regards,

Coal Guy

Anonymous said...

There is a difference between Japan and the US as far as Japan's ability to monetize goes. That difference is external debt. The international financial community is not so interested in Japan's internal monetary policy because it is a net creditor. They will be extremely interested in the US's policy because they own so much USD debt. It is a whole different game. We are much more at their mercy.

Regards,

Coal Guy

Dextred1 said...

Coal guy,

I agree, she stands with a traditional catholic position. This is what politics of personal destruction are all about. I looked into her views on some of the issues. Seems pretty solid on most conservative issues. I did not know castle was a cap-and-trade guy, so go riddance.

I was assuming the msm found something they could jump on. Republicans have to be much slyer to make it through the circus now because of the increasing presence of lefties in the media looking for a gotcha moment. Got to keep stuff like that on the Down low because of the easy target for Stewart, Snl, etc. But the thing she gets out of this is a lot of people that are sick of the msm attacking every republicans on every issue. She is pulling in a lot of money now because of the exposure.

Dextred1 said...

Meant bigotry against Christians by the left. Thought it was not clear in post.

Dan said...

O'Donnell Will probably win for the simple reason she doesn’t have “incumbent” beside her name on the ballot. I suspect that will be the deciding factor in many races.

PioneerPreppy,
“How can anyone...then condemn O'Donnell with a straight face?” I loathe most candidates equally, then hold my nose and pull the leaver for the one who will violate me and mine the least.

Anonymous said...

I think its hysterical to watch the Republicans self destruct by nominating ultra conservative wackos who want to make masturbation illegal. All the GOP needs is a good third party to split up the vote and hand easy re-elections to the Dems and Obama.

Dan said...

Dex,
The current budget deficit is essentially an exponential function. If we select a president term as the period and hold all else constant then by definition the deficit in the current term must exceed not only the prior terms deficit, but the sum of all deficits from prior terms combined. In other words it’s not that Obama and the 111th Congress are proliferant spenders so much as they re maintaining a steady course to disaster; e.g. a failure to lead and make those changes we can believe in. However, I don’t think there is any way out at this point, so it is not as bad as if they could make changes to avoid it.

Applying that to Donals point; it makes sense to invest heavily in alternative energy, electrified rail, etc., because while money will be destroyed capitol will not. For example a wind farm only needs maintenance and will continue to have utility long after we can no longer purchase petroleum and thus will continue to be valuable to society post collapse, even though it’s construction costs hastened the inevitable collapse. A coal plant, absent electrified rail, may well be worthless when we can’t import the diesel to transport the coal and do not have the resources to build steam locomotives; even though stringing it along and making do, may extend to point of financial collapse. Because, while we are scrambling to build steam locomotives to transport the coal it will not be used or maintained.
Same logic goes for Japan. While Japan has squandered money on constructing roads and bridges that will fall into ruin, the truly useful infrastructure will not even though it is uneconomic presently.

Moreover, as a creditor would rather lend someone money to produce money generating assets or to fund operating expenses? A green build-out may not hasten collapse as much as it first appears.

Dextred1 said...

Dan,
I know the debt problem. He was the one that brought up the republican party. The way I see it is that the social contract as currently constructed is the result of the left. You cannot blame the republicans for social security, medicare of medicaid, federal unions and pensions. They are responsible for the war spending, the prescription drug benefit and other wasteful spending, but it is absurd to blame them for all the problems like every lefty does. lets be serious here, the problem are the social programs. Until they are reigned in this whole experiment will fail.


Infastructure falls apart to. All alternative sources have high consumption of specialty raw metals (gold, silver, platinum, copper, etc). Plus transportation cost, Iron costs, high installation costs, long transmission distance which leads to energy loss. Not to mention studies from Europe indicate that spain has lost 2 or more private sector jobs for every green job.

My cousin is a the main field tech for a wind turbine company. His words to me "renewable energy sources cannot be more than 20% of the energy production because of the changing rate of production from varied sources(wind stops blowing, sun does not shine, etc)" Think about it like this, they have to have to backup power ready at all times, so they still have gas and coal plants running at all times. I will take his word for it. He used to work for nasa and is now the big wig at his company and he was how I was turned on to peak oil.

But that was not my point. My point was that exchanging wasteful spending in one form to another will do nothing to advance the nation.

Dan said...

I think you are talking about spinning reserve. Basically it’s a requirement for load matching because as new power demands arise from us at any given time, more power must be instantly brought on line to balance the grid or you get brownouts and the power co. would need to do load shedding while additional plants are warmed up and that can take hours; think rolling blackouts. But the thing is spinning reserve is required regardless of the source of base load power.

If a wind plant is supplying base load, a coal plant is required to be warmed up and reedy to go. However, if the base load is supplied by say natural gas, we still need the coal plant providing spinning reserve. So your spinning reserve is basically a sunk cost and does not detract from anything, because it is required no matter what. Also, geothermal, tidal systems and nuclear are stable; they can produce at predictable rates.

Dan said...

A thought just occurred to me, instead of using hydro for base load as is currently the case because it’s the cheapest; why not use it for reserve. Since it doesn’t need to heat a boiler it can be brought on line simply by opening a sluice gate. We can either have efficiency, defined a lowest possible cost, or stability, but we are kidding ourselves when we pretend there isn’t a tradeoff. Our system only operates as well as it does because it is already highly redundant with the possible exception of Southern California.

Dextred1 said...
This comment has been removed by the author.
Dextred1 said...

Dan,

"We can either have efficiency, defined a lowest possible cost, or stability, but we are kidding ourselves when we pretend there isn’t a tradeoff. Our system only operates as well as it does because it is already highly redundant with the possible exception of Southern California."

Great phrasing and the reason that doubling alternative power from 2% to 4% is really just a joke considering the size of problem. All this will be used with your term "spinning reserve" providing the back up power still burning all of the same carbon based power sources. Hydro would be good for regions like Southwest and Tenn, but would not help here in Michigan. Thank God we have Fermi 2(Nuke) which they just upgraded.

Donal Lang said...

If Obama had expressed the kind of wacky views O'Donnell or Palin have come up with, the media (and some of you guys)would have crucified him! Imagine what is still to be discovered about O'Donnell!!

Dan; you're right that investment in the future infrastructure is sound. Borrowing for that is investment, but borrowing to keep trying to maintain the status quo (especially when the status quo is a bubble!) is financial suicide.

That's the big difference with China and India - their borrowing to invest in infrastructure which has a financial return for the country.

PioneerPreppy said...

As opposed to Obama pretending to be a Centrist and then allowing his whacky pro-union and racist views to come out after he was elected.

O'Donnell's views seem mild compared to Obama's misguided perceptions.

talnik said...

I'm somewhat amazed by how many people are spooked by her views on masturbation; apparently she hasn't needed to resort to it as much as others. She's not only a threat to the elite but the ugly as well!

Stephen B. said...

When the cheap coal and nat. gas are gone, while new nukes continue to be impossible to build, we'll use more and more renewables. Yes, the 24/7 reliability will not be what we have grown accustomed to over the past few decades, but we'll just have to deal with it.

On the other hand, increasing poverty, along with the continued instability of our financial system, suggests that utilities will have increasing difficulty keeping the power on the way they do presently, but for a different reason. When the electric utility has a fifth, a fourth, or even more of its customers arrears in payments, it could well be that cash flow more than fuel flow is what will endanger our constantly at-ready, power grid.

A year and a half ago, I read that 1 in 9 Massachusetts NStar utility customers was over 30 days arrears in their payments, and that was back when the economy was better than now. As well, MA has fared better so far, in this depression/recession, than the rest of the country has. My guess is that electric utilities nationwide aren't all that far from having a quarter or more of their customers failing to pay their bills for their share of the grid expense. At what point does that impact power reliability?

Anonymous said...

Steven,

When the electricity gets turned off, people will pay their bills. The system becomes unreliable when the utilities have to give power away, and become too underfunded to maintain their plant. Everything is driven into bankruptcy by socialism. This is an example of one way to do it. It will eventually happen unless government changes.

Dan,

The power companies keep the nukes running at full power 24/7 because they are the highest in capital investment, but use cheap fuel, so that is most cost efficient way to use them. The fuel cost for Hydro is nil, but there is maintenance to pay for whether it is used or not. So, hydro is used 24/7 also. Large coal and nuclear plants take a long time to bring up and down. Peaking is done with smaller gas and oil plants. Larger plants are brought up and down according to the known demand schedule through the day and week and season.

Solar power is good for load balancing in the South West, because the sun shines most of the time, and solar power peaks along with the demand for electricity due to air conditioning. It is not so good elsewhere, where its reliability is more like wind power.

Wind is capricious. It is here today and gone tomorrow. It requires 100% back up. For every kW of wind added to the system a kW of fossil fuel driven reserve must be added. And, that is in addition to the normal peaking reserve to service demand changes. It just sucks. There is some interesting work going on in battery technology the might help. Google flow batteries. This technology is pretty far off at the needed scale, however.

Stephen,

Many industries cannot function well on intermittent power. It is a huge problem. Many chemical processes simply can't stand it. Some plants take days to recover. Same with computer systems. Same with telecom. It will be a mess. Have you ever sat on the T for hours, stopped in the middle of nowhere? Reliable electric power is a must, unless we want an economy like Pakistan's.

I like the idea of investing in alternative energy, too. But, that investment should only take place if it can be done a profit. Without market discipline, it will just become a series of wasteful boondoggles.

Regards,

Coal Guy

Dan said...

Not sure what the engineers called it; but it’s not being currently used, that is to say it’s in reserve; and the motor is warmed up and spinning. Yes I know it is a steam turbine, save hydro, but motor is a good analogy and so is spinning reserve. At least it doesn’t give the impression that it is sitting there in reserve consuming nothing like the diesel and natural gas generators I bought.

Regardless of the terminology, you missed the point. The point is we need to maintain spinning reserve regardless of how the base load is being supplied. If we have a mile long coal train making daily runs to the coal fired power plant; we still need spinning reserve. So, the fact that alternative energy sources also need spinning reserve does not detract from them in the least. Spinning reserve is a sunk cost it must be spent no matter what.

Note, pinning reserves as currently employed uses a good deal of fuel, but that doesn’t have to be the case. If we choose resiliency over efficiency, hydro can be the reserve, geothermal can supply the reserve... Incidentally, most of the country is a good candidate for geothermal power, just drill deep enough and you can find hot rocks.

Dan said...

Coal guy,

I agree with everything but hydro. It does have ongoing maintenance cost, and it is one of the cheapest to operate because it has no fuel costs. However, it also has no fuel cost to stand in reserve. It can impound water until it’s full and wait until needed to balance the load t no cost, save ongoing maintenance. It seems to me that since it doesn’t need to burn fuel to provide n instant reserve capability, then that is its best use. Otherwise on the whole we are paying more for reserve capability due to fuel cost than we save by generating hydro.

Jut because it’s the way it’s always been done doesn’t mean it is the way it should be done. I suspect the accountants are looking t the cost of each plant in isolation instead of the costs of the system as a whole.

Anonymous said...

Dan,

You missed my point, which is for every kW of wind you add to the system, you have to add an additional kW of spinning reserve to back it up. Wind power makes load balancing much much harder and more expensive. If it is not cost effective, it should not be done. It is just throwing good money after bad.

Regards,

Coal Guy

Dan said...

Coal Guy,

You’re right I completely glossed over the 100% backup requirement. So without storage in most applications wind is looser, and most storage options are lousy. Yet wind is plowing ahead inspire of the problems, just like ethanol- another looser in my opinion. Wow.

Dan said...

Just listened to an interview with Joseph Tainter, that speaks directly to the topic we were discussing. It’s about 40minutes but defiantly worth it.

One thing that he hit on that I have been saying is wasting some money is not as important as doing what we can while we can; not that I actually expect it to happen. Regardless, it Is still worth pushing for.

Donal Lang said...

Hey CG, it didn't take long for another slimy thing to creep out of O'Donnells past did it! More to come soon apparently.

I don't think your 'its ok because the Catholic church agrees' argument takes you very far, like stopping people masturbating (which I hadn't heard O'Donnells views about until you mentioned it) witchcraft also has a long Catholic history too. Along with banning condoms in 3rd world countries and Catholic priests f*cking little boys.

A little discernment in politics goes a long way.

Anonymous said...

Until she's as creepy a Barney Frank, I'll give her a pass. What's good for the gander...

I'm no friend of the Catholic Church either. If I were to start in on them it would not be about masturbation. That isn't even a starting point. But, if she is in agreement with the Catholic Church on an issue, she has enough company to consider her view somewhere in the proximity of the mainstream.

Did she really say she would outlaw masturbation? Someone said that here. I'm doubtful.

Regards,

Coal Guy