tag:blogger.com,1999:blog-99704500378481622.post2377147397234281712..comments2023-10-14T08:23:14.641-07:00Comments on The American Energy Crisis: OPEC, State Bankruptcies, and MathA Quaker in a Strange Landhttp://www.blogger.com/profile/15425198389944137571noreply@blogger.comBlogger54125tag:blogger.com,1999:blog-99704500378481622.post-80364477127165020022011-01-25T09:21:11.978-08:002011-01-25T09:21:11.978-08:00Funny you mentioned textiles. I was talking with a...Funny you mentioned textiles. I was talking with a friend about the opportunities in textiles a couple of years ago. The basic idea was to get someone really good to mind the store, take orders, measurements and do any final alterations. Then farm the bulk of the work out at piece rate to laid off seamstresses throughout the south who would make the clothes at home and mail them to the store. Never got into the nuts and bolts of it. What is the materials cost, shipping costs, how long does it take a seamstress to make a shirt etc. However when off the rack shirts made in third world sweatshops are going for $40 there is a lot of room to work with. If we weren’t in the middle of a depression, with the customers getting beat down and repeatedly bent over the table, it would probably work.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-50316052972249390572011-01-25T09:13:11.707-08:002011-01-25T09:13:11.707-08:00You both do realize no one is reading these long, ...You both do realize no one is reading these long, blathering screeds, right? Less is more, gentlemen.bureaucrathttps://www.blogger.com/profile/03869739125758038029noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-37082181689021713962011-01-25T05:33:00.538-08:002011-01-25T05:33:00.538-08:00The trade deficit dropped from 695.9 billion (2008...The trade deficit dropped from 695.9 billion (2008) to 380.7(2009) billion. It is our dependence on foreign oil that drives this whole mess. We import about 249 billion a yr in oil related products. The oil deficit is over half the total deficit. We are 100 billion + positve in services and have a hell of a high end production advantage, but these will bo away to it seems as other nations ramp these up also. <br /><br />Don’t think I totally disagree with because I don't. I am not dogmatic on this point. We are supporting this deficit with more debt and eventually this house of cards cannot stand. I would like targeted tariffs on things like clothing. The textile industry in the southeast has been destroyed over the last 20 yrs. I agree that this has burdened the state with the cost of paying benefits instead of people taking care of their own. You make some great points, I just don't know if it could happen. One problem I see is like smoot-Hawley we could lose 60% of exports and a lot of people would be hurting before it turned around and we started building the things we use instead of building things for export. This unrest could cause the system to just go ku-put and with the fickle nature of politicians they would ditch it before we got back to building things we need. We could let it be known that we are searching for trade parity by slowing raising tariffs maybe 1% a month. I am not so sure though that the fed is not doing this trough the increase of base money. In the last six yrs the dollar has lost 40% of its value to euro which makes our goods cheaper. One interesting thing about this recession is that imports fell from 2.3 trillion in 2007 to 1.9 trillion in 2009, while are exports only fell from 1.6-1.5 trillion dollars. Is this the result of the fed printing policy, I would think yes.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-73730193060230255682011-01-25T00:09:43.714-08:002011-01-25T00:09:43.714-08:00By not protecting the rust belt we are not just lo...By not protecting the rust belt we are not just <a href="http://www.financialpost.com/Liquidated+North+American+industrial+assets+find+home+China/4134895/story.html" rel="nofollow">losing the factories</a>, we are losing the skill sets. In particular we are losing the ability to retool; because, the toolmakers are not training their replacements for lack of demand. This was driven home to me when I launched my now failed manufacturing enterprise in the spring of 2008 and was looking for tooling. Once the dollar gives up the ghost, not only will we not be able to import the things we need, we won’t be able to make them either. Worse yet it takes longer to train a toolmaker than to train a surgeon because of all the math and precision required; when a 500 ton punch press slams shut there is zero room for error. We are not just going to go down; we are going to stay down for a long, long time.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-49577812639267439142011-01-24T23:02:03.493-08:002011-01-24T23:02:03.493-08:00Dex,
At least one politician supports tariffs, an...Dex,<br /><br />At least one politician <a href="http://www.ronpaul.com/2009-04-15/end-the-income-tax-abolish-the-irs/" rel="nofollow">supports tariffs, and excise taxes to support the government</a>. My guess is Jr. supports it to. While the surpluses he talks about are gone, so are the taxpaying citizens so basically it’s a wash. Two is a start, we can build from there.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-21389714384586905512011-01-24T22:47:30.670-08:002011-01-24T22:47:30.670-08:00Dex,
Tariffs are indeed a tax however we pay them...Dex,<br /><br />Tariffs are indeed a tax however we pay them through an increase in price of imported goods, not all goods. However there is a good argument to be made that the cost of all goods will rise due to a decrease in global wage arbitrage. So be it, exchanging our better paying manufacturing jobs for minimum wage service jobs and cheap junk from china was a Faustian bargain anyway. What is wrong with protecting rust belt factories? What we just saw was the blue collar workers move into construction, because it can’t be offshored as easily, then overbuild and help push for laws that extended the malinvestment.<br /><br />The world has changed; our agricultural exports will not be impacted the ROW desperately needs the grain. Presently there are food riots across the Middle East, the government of Tunisia just fell and Asia may be joining the party soon. This is not likely to change substantially until after a major famine, war, or plague. Hell, last year we had a bumper corn crop, the third largest on record if I recall, and it still wasn’t enough. On top of that scary situation congress wants to substantially up our ethanol production.<br /><br />In regards to smoot-Haley; again the world has changed. In 1929 we were the worlds exporter of manufactured goods occupying roughly the same position china has now. Europe was the debt financed importer. Starting a tariff war under those conditions was insane. Today we need to reduce our imports and practically our only export is grain. Thus, we can raise a tariff with impunity. Our trading partners will howl but do nothing, see the second paragraph, and the S&P 500 will have a hissy but so what. GM is no longer an American company and what’s good for GM is no longer good for the USA. Same goes for GE, IBM, and the rest of the multinational corporations from Abbot to Xerox. They will be howling because their global reach no longer gives them a strategic advantage via the Double Irish and the Dutch Sandwich.<br /><br />You certainly have a point with southern farmers being forced to buy more expensive goods made in New England. However so did farmers in Illinois, another state with an agricultural economy, and Indiana, and Iowa and… the economy of the entire country was largely agricultural; obviously that wasn’t the biggest issue.<br /><br />The reason I favor tariffs is it would encourage onshore production, something we desperately need. When <a href="http://www.businessinsider.com/real-employment-rate-47-percent-2011-1" rel="nofollow">Only 47% Of Working Age Americans Have Full Time Jobs</a>, the options are; higher prices due to tariffs, higher taxes or inflation to support benefits, or a full on war against the starving masses we no longer need for production. The beauty of a tariff is that taxes will go down as production and jobs are onshored reducing the need for welfare.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-72914286754622084772011-01-24T18:19:51.462-08:002011-01-24T18:19:51.462-08:00Dan,
I should mention that if we replaced current...Dan,<br /><br />I should mention that if we replaced current tax code with just tariffs I would be fine with that because it would curtail the size of government to 5 or 10%, there is no way to get more out of that type of system. I just don't think we actually get that passed. It would just be added along with the income, corporate, state, local, purposed vat, etc. I can just see a lot more of a base for a national sales tax. Still would collect enough to take care of worst off etc. Though government is the definition of fraud.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-58514560933589046412011-01-24T17:57:16.336-08:002011-01-24T17:57:16.336-08:00Dan,
Tariffs are just another name for taxes and...Dan,<br /><br /> Tariffs are just another name for taxes and we still pay them through increased price of goods!! Could you imagine the price of oil if put a tariff it. There were plenty of problems with those also. They hurt agricultural exports while protecting rust belt area factories. Go back and read about the earliest battles over tariffs. Go to 1930 and look at the mess smoot-Haley tariff act created. Before they we even implemented tariff wars started against us preemptively. Most economist blame the selloff in 29 on the tariff. Not to mention that big exporters and importers fight for their specific tariff which is the same manipulation they use now with tax code. Take a look at the Embargo Act of 1807, it was passed to restrict trade to Europe and almost lead to the Secession of the Northeast states (Hartford Convention). It stopped foreign shipping trade from U.S. ships. The civil war was hardly a humanitarian effort as much as a rejection of mercantilist policies that hurt the south. This time instead of the northeast shipping ports being hurt the southern Ag was hurt and was forced to buy more expensive goods from the northern industrial states taking hard earned money from the hands of mostly small farmers, not big factory farms (plantation) as most think of it. It is never as easy as it seems. Though I do think it would be fair to enforce currency manipulation laws, but we should never throw stones when we live in a house of printed fiat money.<br /> <br />We now are just mostly exporting inflation through printing money. The truth is we are buying oil, cars and tons of plastic junk with nothing but a big damn credit card which will never be paid back. We have the upper hand until of course we don’t (when the dollar crisis happens) I often think that we will still be in driver’s seat because we will be able to print a Gold backed currency if the Dollar ever fails. We could also go with a bimetallic currency standard and use silver to pay the small transaction with gold holding the larger value. We are the largest holders of Gold on earth. I miss read your comment thinking you were pointing out fault in sales tax. It is also easier to enforce sales tax than tariffs. Tariffs create a reason and a fairly simple way to avoid where sales taxes takes in taxes from all sources. The tariff system worked when the government hardly collected 5% of GDP and most of the time less.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-57490494672924689372011-01-24T17:01:06.267-08:002011-01-24T17:01:06.267-08:00Doh that should be:
Tariffs without complicated ...Doh that should be:<br /><br /> Tariffs without complicated paperwork requirements favor small businesses and local producers with only importers dealing with bureaucratic hassle. On the other hand sales taxes without deductions favor multinational corporations offshoring production, to avoid the sales taxes on inputs.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-71456983071119148162011-01-24T16:56:49.334-08:002011-01-24T16:56:49.334-08:00Dex,
We do not end in the same place because with...Dex,<br /><br />We do not end in the same place because with a tariff anyone can move production to the US to avoid taxes, thus activities that reduce dependence on transfer payments also reduce ones tax burden. Moreover since the only revenue agents are customs agents anyone not involved in importing goods can ignore the tax collection apparatus entirely. There would still be state and local sales taxes of course but anyone could control them by voting with their feet without expatriating. <br /><br />Tariffs without complicates paperwork requirements favor small businesses and local producers with only importers dealing with bureaucratic hassle. On the other hand sales taxes without deductions favor multinational corporations off production, to avoid the sales taxes on inputs. There is a reason the rentier elements of our society occasionally push for a sales tax and only Ron Paul pushes for funding the federal government by tariffs.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-13385767939363059212011-01-24T14:42:10.347-08:002011-01-24T14:42:10.347-08:00Progressive only in the Pre-bate amount also. You...Progressive only in the Pre-bate amount also. You could start with a larger lets say 50007000$ pre-bate on anything less than 13,000 (I think that is around poverty level) and phase it out at around 40,000 dollars for a family and still save a lot of money over current system. This could be phased out or left in place. That is why I put the 18-19% spending cap in amendment form.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-74661289426177640062011-01-24T14:32:14.480-08:002011-01-24T14:32:14.480-08:00Dan,
Progressive to start because of the pragmati...Dan,<br /><br />Progressive to start because of the pragmatic side of actually getting it passed.<br />This is from first post:<br />"Personally I would just like to see a graduated sales tax at first, with the rates brought down over time until they are flat and stable"<br />We end in the same place, I jsut don't see that happening right away.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-88715811684285178412011-01-24T13:35:13.301-08:002011-01-24T13:35:13.301-08:00Dex,
If you want to lift the masses out of povert...Dex,<br /><br />If you want to lift the masses out of poverty and return productive capital to our shores a regressive sales tax will not do it. The solution is to support the federal government with tariffs, just like before the 16th amendment. There is a Turkish proverb “Zararın neresinden dönülse kardır.” Meaning: No matter how far down the wrong road you have gone, turn back. It applies here in spades and would accomplish all the right things for all the right reasons.Danhttps://www.blogger.com/profile/04354887108778074009noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-49529499731694099702011-01-24T12:43:17.813-08:002011-01-24T12:43:17.813-08:00Nancy,
What do opinion polls have to do with f...Nancy,<br /><br /> What do opinion polls have to do with facts? If 40,000,000 people share a bad idea, that does not make it a good idea. If the majority of Americans believe that the Sun won't come up tomorrow, it will still come up. When faced with the facts, you just change the subject. No one can argue with a genius or an idiot. I'm done with you.<br /><br />Regards,<br /><br />Coal GuyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-46312007208662624822011-01-24T12:40:17.999-08:002011-01-24T12:40:17.999-08:00Bur,
You are right that there are a lot of old p...Bur, <br /><br />You are right that there are a lot of old people to take care of. You give a false choice of course. You make a straw man of our arguments. IT is not a choice between keeping all current programs and cutting all current programs, but one of finding a balance. The balance will be found by the free choice of voters or the Iron hands of the bond market. Anyways it really does not matter which way it is brought about, it will come and we will either print the money leading to massive inflation or cut the spending and thus save the current arrangement. As you point out bur I fear there is no political will to take on these issues now or for that fact ever. People like free crap and when the evil rich carry the cross it makes many downright giddy. This does not matter though in reality because as we play violins and argue ideologies the ship is sinking.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-54109482083485243562011-01-24T12:10:04.499-08:002011-01-24T12:10:04.499-08:00The opinion polls are in my favor, gentlemen. Not...The opinion polls are in my favor, gentlemen. Not to mention the rest of the world that matters has already gone socialist. High taxes are now inevitable, as we undertaxed for the last 30 years. We have a lot of old people to support. We'll see. :)bureaucrathttps://www.blogger.com/profile/03869739125758038029noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-85073116837581115492011-01-24T10:53:43.661-08:002011-01-24T10:53:43.661-08:00Did you read what I wrote? I am no yes man, but I...Did you read what I wrote? I am no yes man, but I am no dreamer like you. I am not rich by any means, but I believe you are entitled to what you have earned. I don't like the uber rich either because they use the behemoth federal bureaucracy to swindle the taxpayers because of their inordinate wealth and influence, though this is a facet of fascism and not of a republic. Get with it bro, I know you have to be smarter than this. You say tax the rich like it is ever going to happen. You might tax the upper middle class like yourself, but the billionaires you know will never be taxed. So marginal tax rates go up, who cares. The deductions and other shelters increase to. I am being pragmatic about this. We actually get more taxes from the rich as % if we lower tax rates and reduce deductions.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-28898071223605234922011-01-24T10:42:10.714-08:002011-01-24T10:42:10.714-08:00Bur,
Understand the MATH. Dex is right. Tax...Bur,<br /><br /> Understand the MATH. Dex is right. Taxing the rich does NOT reduce their percentage ownership of wealth. They are wealthy because the own the notes. The only way to reduce the skew in wealth is for the rest of us to SAVE. That is to own stocks, bonds, farms, businesses, etc. And, also, we must pay off our debts. Same effect. <br /><br />The UK with all its wonderful taxes has much more concentrated wealth than the US. Redistributing income does not help the distribution of wealth one damn bit. The people on the receiving end do not save. The rich just get richer because the high taxes make it that much harder for the lower income people to sock some away. Understand the MATH!!<br /><br />Are you sure you aren't Nancy Pelosi?<br /><br />Regards,<br /><br />Coal GuyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-75604002085250219392011-01-24T10:27:37.141-08:002011-01-24T10:27:37.141-08:00Dex, I know everyone thinks they can become a mill...Dex, I know everyone thinks they can become a millionaire, but almost no one ever becomes one. Stop being a yes-man for the wealthy. :) Join us in average-ville! Hahaha!bureaucrathttps://www.blogger.com/profile/03869739125758038029noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-45173711623363306452011-01-24T09:15:48.729-08:002011-01-24T09:15:48.729-08:00I don't see your point about taxes. If we tax...I don't see your point about taxes. If we tax the rich, you are really only taxing the money that they made in the present not taking the capital they have already accumulated. Increasing taxes has been shown to lower the total % the rich pay. Lower tax rates actually shift the burden to the rich as shown by the Kennedy, Reagan and bush cuts. All lead to an increase in % of total taxes paid. Personally I would just like to see a graduated sales tax at first, with the rates brought down over time until they are flat and stable. Doing away with all deductions on everything. This is the hard part because the lobbyist have worked hard and paid a lot for these industry specific deductions. The one that would be hard to change would be the mortgage deduction; you would just have to grandfather the deduction in for current owners because most bought with that incentive in play. Industry deductions are not necessary in a sales tax regime thus the need to protect them goes down, though don’t expect the lobbyist the quit asking and paying. This would leave a much smaller IRS because of no need to file individual returns. Inheritance taxes don’t really take that much from the top 10-20% because they find creative loopholes to avoid them anyways. I think the national sales taxes really give us some advantages. I have heard some talk of giving a pre-bate to everyone. Let’s say it was 5,000, this could add on to the income of the poor to make up for the new sales tax, because they have never paid federal income tax and the burden would be destructive on the low end at first. The rich spend much more money and thus would pay much more taxes. This would also help develop a real capital base instead of the apparent fraud created by increasing base money. This needs to be done in a stable money environment so a return to gold linked money would fix this part (there has been no shown evidence that a advanced economy grows with a falling monetary unit, in fact just the opposite from everything I have read), just make the money only redeemable in the U.S. and not to foreign holders so we don’t have a 1930’s demand for gold for greenbacks situation. The last part would be a constitutional amendment to limit federal spending to historic intake of revenue (about 18-19%) and thus do away with the ability to incur debt. This is not that hard and would force Washington to balance the budget and be pragmatic on which programs to keep and which to cut or shrink to meet the reality of the situation. Not that hard to fix this mess really. We just are never going to be what we were in the 50-60’s so no use wishing for them days anyway. The world of cheap oil is over!!!Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-16293157263644924812011-01-24T09:12:56.608-08:002011-01-24T09:12:56.608-08:00This comment has been removed by the author.Dextred1https://www.blogger.com/profile/10295971877800381681noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-47779228024215188062011-01-24T09:06:46.710-08:002011-01-24T09:06:46.710-08:00I'm not of the mind that this is a case of us ...I'm not of the mind that this is a case of us all being equal 50 years ago and the U.S. fell behind. I think the U.S. had a HUGE advantage over the rest of the world in the 1940s & 50s as we rebuilt Europe, oil was plentiful and the credit thing hadn't really started. I think we are now falling to "average." We just don't know it yet, and we'll have to get used to being "just another country." <br /><br />Like the Chicagoans yesterday who were so sure of the Bears to win, reality got in the way. :) We're just used to winning all the time -- having all the cards and chips. Being average ain't so bad.bureaucrathttps://www.blogger.com/profile/03869739125758038029noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-29869753581475956822011-01-24T07:36:59.825-08:002011-01-24T07:36:59.825-08:00How well is that service economy working for us? ...How well is that service economy working for us? Can't run an economy on nail salons and bypass surgery. Remember the BS about the "information economy" a couple of decades ago? Can't eat them databits or run your car on them either. It isn't so much the number of people employed in manufacturing, it is whether we own it or not. The eggheads can say what they want, but we have borrowed an built beyond our capacity to repay. That bubble masked the ruin of our productive base. Had it not been for credit expanding faster than the GDP, providing baseless money, the damage would have been clear decades ago. Our wealth is in our productive capacity. That extends to food, energy, transportation and all the segments of the economy that help get the things that people need to them. Government jobs don't count. Government produces nothing.<br /><br />A large portion of our productive capacity has moved offshore. Worse, there is worldwide overcapacity and wage arbitrage, so it isn't coming back any time soon. We are a poorer country than we were. We will have to adapt. Government will have to shrink, no matter the tax rate. It isn't a choice.<br /><br />Regards,<br /><br />Coal GuyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-38015160864412120912011-01-24T06:56:56.888-08:002011-01-24T06:56:56.888-08:00Carbon,
We'll, don't take this stuff pers...Carbon,<br /><br />We'll, don't take this stuff personally. Or even realistically. :) We have no idea how the next 30 years are going to turn out. All we have is educated guesses.<br /><br />And while I do believe in the "every empire dies" historical reading, I also know as barely an engineer that progressions in machines to make things has gone parabolic since the industrial revolution. As time goes by, you need fewer people to do the same amount of (manufacturing) work. That means less "classical" manufacturing. So the dopes who said America would survive more as a "service" economy were mostly right. The U.S. will have to survive with fewer manufacturing jobs, and more jobs in services, elder care and government. It's a forgone conclusion. What we DONT need is all the wealth congregating in the hands of a few billionaires. We need socialist-country taxes. Even the guys at the car wash should get a living wage.bureaucrathttps://www.blogger.com/profile/03869739125758038029noreply@blogger.comtag:blogger.com,1999:blog-99704500378481622.post-64293669746058847152011-01-24T05:46:31.672-08:002011-01-24T05:46:31.672-08:00Bur,
Treasury notes are not capital. Factori...Bur,<br /><br /> Treasury notes are not capital. Factories are capital. You participate in capital markets when you invest in stocks and bonds of companies that produce things that people are willing to buy. As manufacturing has left, so has capital, because it IS capital. Government bonds have value only to the extent that government can tax the productive. Treasuries are NOT capital, though they look like it.<br /><br />That is why government has to shrink. The capital base that supports it has shrunk to the point that government can no longer be supported at its present size. The Fed is now printing money to support federal borrowing, and the states and cities are going bankrupt. <br /><br /> Your total confusion does drive me nuts. You are a degreed engineer, yet cannot apply mathematics, nor have you any concept of cause and effect. Amazing.<br /><br />Regards,<br /><br />Coal GuyAnonymousnoreply@blogger.com