Why State-sponsored gambling should be rejected

I found a Minnesota Conservative organization "The American Experiment" with a paper against gambling expansion Minnesota:
http://www.amexp.org/Special%20Reports/GamblingInMinnesota.pdf

I only read through quickly so far, but overall I have no argument.

I see my "top talking point" against state sponsored gambling (of any form) is that income from gambling has a corrupting influence on government. It pretends it is free income. It pretends people would gamble anyway to the same degree without the new investment. It pretends companies that specialize in building casinos will not gain further influence for future expansion. It pretends there are no significant social costs to gambling.

I don't think I've ever purchased a lottery ticket. I have purchased one pull-tab from a friend working at a bar selling them - didn't win. I also went to a casino downtown Duluth, and cycled $5-$10 of coins through them (initial coins in, winnings out) - don't remember how much I lost, probably about half. It didn't seem very exciting to me, except as a test if I could predict my losses - are "averages" real?

I can't see the attraction to casinos, but I can see my own addictive bahavior when I'm unhappy or stressed and I wouldn't particularly trust myself in a casino if I had such an addiction.

I think I'm just a financial conservative - I like "sure bets" over gambling for profit, even if I think the odds are in my favor. I appreciate the saying "Never pick a fair fight", and I can imagine anyone who truly thinks casinos offer them any sort of "balanced odds" for winning.

So anyway, I can't well judge WHY people would gamble. I accept it is in human nature to "play" and there is a thrill and tension in the uncertainty - like a baseball game results. I accept people WILL ALWAYS gamble on sports, on card games with cards, and that money losses will come about. I just think some sort of gambling is easier than others - small scale gambling is easier - and organized gambling is something very different.

It is just hard for me to imagine earning my living by gambling. I mean "being the house" - a job at a casino, or investing in one. Certainly Indian casinos sprung up so fast because others were willing to invest money in debt for them. I don't know any details, but if I were part of a casino my first priority would be to pay off debt. My second priority would be to invest in long-term resources that can meet the needs of the tribe. My third priority would be to invest profits in PRODUCTIVE employment. At every step I'd EXPECT next year all income could be lost - for any sort of reason. I'd live in a state of CONTINUAL FEAR of this dependence.

The first step is a NO BRAINER. The second step is less clear. Ideally long term investments SAVE money in the long term - however WRONG investments might INCREASE long term costs.

I can think similarly about any "windfall", like discovering oil. New income encourages "development" and well-being encourages expanding population, consumption and infrastucture which might not be sustainable later when the income is gone.

One thing I missed in my 3 steps is "sharing the wealth". A "windfall" looks big for a small group, but if divided among the wider population becomes something less significant. Indian tribes would surely "LIKE" to share their wealth with wider tribes, but with great internal needs (and debt) its easy to want to delay sharing until "we've taken care of our own first". Then slowly expectations and ambitions rise with new wealth so there's never "spare wealth" to share. The only principled response to windfalls to share right away.

If the Minnesota State Government found itself sharing a casino with some northern tribes, what SHOULD we DO with this "unearned income"?

Maybe gambling income is "sustainable", maybe not, but in the short term it encourages EXPANDING government spending, expanding expectations.

SURE, if Minnesota is POOR, perhaps you can justify short term investments in gambling, but where does it end? When do we have ENOUGH that we don't need it? I can't imagine that point ever being met - if not already!

I wonder if there's some sort of parallel in nature? The closest I can come would be parasites - organisms that feed off others. Well all of life ultimately does this. Humanity as much as any animal.

I just can't have an "open minded" debate on gambling. I 100% support state control over "organized gambling". I 100% reject running government on gambling profits. The only exceptions are short term desparation, and under that exception, I'm 100% sure there are better options.

Ugh!

Fees and Taxes

The republicans in Minnesota, and Governor Pawlenty specifically, have been playing around with definitions to keep a "No tax increase" pledge to the taxpayers league.
http://www.taxpayersleague.org/main/index.php

The Governor sees fit to call an increased cigarette sales tax as a "fee" so he can increase it - on the grounds that health care costs are related to smoking I guess.
http://www.startribune.com/stories/587/5415208.html Pawlenty proposes 75-cent cigarette 'fee'
*********
Insisting it was a fee — not a tax — Gov. Tim Pawlenty proposed a 75-cent charge on every pack of cigarettes sold in Minnesota as part of a deal he hopes will balance the budget.

The so-called Health Impact Fee would raise about $380 million over the next two years. Pawlenty said it would help cover the state's costs for smoking-related illnesses — which top $800 million — and free up other state money for education. Democrats were lukewarm to the proposal.

"I believe this is a user fee. Some people are going to say it's a tax,'' Pawlenty said. "I'm going to say it's a compromise and a solution.''
********

Meanwhile he vetos a $0.10/gallon increase in the state excise tax on gasoline.

The taxpayers league agrees with this veto:
http://www.taxpayersleague.org/issues/pr_display.php?rid=264

SURE most Minnesotans don't want to pay more taxes, but it's all a matter of perspective - DO want want to start PAYING for our roads now OR throw the costs into a long term debt for the state?

FUNNY also how the governor SUPPORTS a 0.15% sales tax for Hennepin county for a new Twins stadium because it doesn't require any state-level funding. He OUGHT to be out there with the "User Fees" (ticket sales) for recooping the stadium costs.

WHY is gasoline revenue a "tax" and cigarette revenue a "fee"?

Because a minority smoke and a majority need gasoline. Maybe we say "Taxes apply to a majority, and fees apply to minorities."

I think I heard House Speaker Sviggum say something like "Tax is a charge applied to everyone, and a fee is a charge applied to users."

We might say "Income fee" because it only applies to people who earn money.
We might say "Sales fee" because it only applies to people who spend money.
We might say "Property fee" because it only applies to home owners.

I'm being less that thoughtful, but I see no clear distinction.

MAYBE, I'd accept a "tax" goes into the general budget, while a "fee" income can go into a specialized account. I might buy that, which would put "gas tax" as a clear "user's fee".

Back to cigarette taxes, whatever you'd like to call it. I have definitely heard from smokers who say high prices do reduce their smoking. Same is true for alcohol/liquor taxes. "Sin Taxes" is a fun and accurate description.

By the same logic, I accept higher gasoline taxes as ESSENTIAL for curbing consumption and making alternatives competitive. I see gasoline tax ultimate also as a "sin tax" - and a matter of national security for that matter.

Of course, we're still collectively in denial about our addiction to oil, so the "truth" can't be told yet. You can only "scapegoat" the majority's vices if you're a dictator or have no power over others.

I've never been asked in one of those mysterious surveys on "approval ratings". If I were asked, I'd rank Pawlenty and his stubborn gamble against taxes as a 2 on a 10 point scale of approval.

I hold a 20% support for holding the line, keeping our state competitive economically. I accept the basic idea that government will tend to grow without limit unless firm limits are applied. I accept that it is likely government will shrink in the future whether we like it or not, and it is better to hold the line now and minimize dependency upon the government.

However I also think the problem will take care of itself in the long term, and I'd rather be charged my taxes now for services now. I'd rather government be funded by taxes NOT gambling income.

The hardest issue for me is the "regressivity" of "user fees". I accept high energy costs hurt the working poor more than anyone else. I see taxes as the answer because we're in control - rather than OPEC. If higher costs MUST come, let them come now, and let US LEAD our own weaning.

Old King Coal

What is the future of electricity production in Minnesota?

Currently, according to XCEL, 8237MW (51%) of our electricity is produced by burning coal, at least Xcel, which includes my home's source of electricity.
http://www.xcelenergy.com/XLWEB/CDA/0,3080,1-1-1_1875_4797-3472-0_0_0-0,00.html

Wind power is 25MW, or 0.16% 1/600th of our electricity.

Coal burning is the dirtiest source of energy. It can be improved in terms of ending the 30 year-old grandfathering agreements on the worst polluters against required upgrades. There's claimed newer technology that can further reduce emissions than current standards. However none of that offsets the fact that burning coal has the highest release of CO2 of the fossel fuels.

So a good environmentalist is justified in denouncing coal burning. Yet, what are the alternatives? Not fuel oil from petroleum with our import requirements already with oil. Not easily Natural Gas which is in overall decline in North America, and is better used for heating homes.

Nuclear fission - using radioactive decay of Uranium 235 - may or may not be any more sustainable, although at least at power plants themselves don't crease atmospheric pollution - only heated water.

The 4% electricity from Manitoba hydrodam generation is the best we can do - going across the border north into Canada.

Can't Minnesota do any better? The hardest problem I see is even when it LOOKS like things MAY be getting better - air quality in some measures, like from burning low sulfur coal is that these little steps encourage complacency for unsustainable energy. When our (Montana's) low sulfur coal is gone, will we give up coal burning? I can't imagine it - we'll compromise back down to "best we can get" and the path never changes as long as there's "an easy" step that is not so much worse than the last one.

Minnesota has no native natural gas, petroleum or coal. We have no uranium mines. We must import all these energy sources. What we DO have is agricultural land, forests, sunlight, some hydropower and some wind power.

Why can't we do better than we do now?

I'd imagine we must approach this problem from two directions:

1) Electricity must be more costly to allow renewable/local production to compete with nonrenewable imported energy.

That opens market forces to help people make decisions based on "truer costs" rather than just immediate economic costs.

2) We would subsidize research and development of our local energy resoures.

Subsidies are needed on new industries to jump start them to develop a market.

I don't know if these are enough, but they are the direction to go. Of course mercury in our lakes are not going to disappear while other states and regions continue with coal, but when we develop these new technologies, we can tell them to others to help them as well.

I don't know what effect higher electricity rates would have on households and businesses. Myself I participate in the XCEL "WindSource" program - so I pay an extra $0.02/kwh. In theory this is supposed to encourage further development.

AND what of the spoiled children who don't care about the environment, don't care about anything that costs them more money? That is, can this be democratic (voting by dollars), or must it be dictatorially applied by enlightened representatives?

There is a not fully organized but self-righteous movement of people who see the government AS-THE-PROBLEM and don't want a dime more heading to the government then that can avoid short of revolution.

If you neglect diffuse "environmental harm", fish you can't eat, a few dead trees from acid rain, an inperceptively slow rising global average temperature from CO2, there's not much more to argue with you.

Arguing on limited supply of fossil fuels can be helpful in the long term, but it's too long in my mind for coal because of the environmental consequences.

How can I even be sitting at this nice computer typing away by 50% coal plants? It seems difficult for individuals to really make a difference at all. At home I have windsource power, and I'm supposed to feel smug and superior for my "green energy", but I've not convinced a single other person to throw more money at the power company. Not one! Maybe not tried hard enough...

Overall it seems tiring just to imagine starting the evangelical movement for clean energy, unless I want to offer to pay everyone's higher electricity bill myself.

My CEO at work suggested the company make a donation to an environmental group over throwing money at the power company. It's probably true in some sense - at one level higher prices encourage conservation, but slowly rising prices along with 101 other more immediate concerns suggests higher prices won't affect the electricity consumption at my work.

SURE we might mandate employees will turn of computers at night - at least monitors. We already have fluorescent lights. We might get some more LCD monitors over time. But overall electricity costs is a small fraction of our direct expenses.

SO it seems the only way to make a difference is to make prices high enough that we'd get a revolution. Of course there's slow and gradual increases, but people will catch on.

I think it's necessary, but yet invisible, until we hit some sort of black out condition.

AND yet conservation iself is never enough. It just means we have less space to step back when the next crisis hits.

Coal and Nuclear power will surely increase in the future. We will participate because it is the only way we don't need to re-evaluate our needs.

Federal Reserve, money supply, and debt

Okay, let me get this straight, maybe...

The Federal Reserve controls the money supply by lending money to banks. If it wants to expand the money supply, it lowers the interest rate changed, and if it wants to shrink the money supply, it raises the interest rate.

Inflation can be controlled by shrinking the money available for loans. By converse, deflation is controlled by increasing the available money?

I imagine the Federal Reserve has no actual "reserve" - no actual resources like gold to back up its lent money.

I suppose the federal reserve only loans moneys to big banks and that they are always "good" for repaying the money. Big banks take in savings from clients AND borrow from the federal reserve to have money available to loan. THUS client savings can be much less than client borrowings.

If the economy keeps expanding, like flying a kite, the federal reserve can keep unrolling more string (loans) to keep the economy in balance.

When they recently lowered the interest rate as low as 0.5%, while 2003 CPI increased 1.9% and 2004 CPI increased 3.0%, effectively the Federal reserve was charging a negative net interest. That is if they loaned out $1000 for 1 year, they'd only get back say $1005, while inflation would make the effective value down by 3% - say to ~$972. Of course they don't need to make money I guess.

The same logic might apply with deflation. That is, if deflation rate was 3%, the federal reserve might loan money as -5.5% interest. There's no mathematical difference. In both cases, the fed rate was 2.5% below CPI rate.

It is a funny idea. I loan you $1000, and for the privlege of being able to loan you money, I offer $55/year to YOU to encourage you to keep my money longer. Something is terribly crazy here.

Maybe not. If there's real DEFLATION, that means WEALTH is decreasing in value. Holding a deflating asset is unattractive, so I guess I do have to keep giving you payments to encourage you to keep the deflating asset.

I wish I was a little smarter - or that someone could explain all this simply. It seems simple on the surface, but the dynamics of feedback effects seem to be harder to see and what's really important.

Anyway, the federal reserve is now carefully increasing its loaning rate. That means banks have an incentive to repay money they've borrowed, and that means they have less money to loan out. Because there's less money to loan out, and the money that is available has a higher interest rate, less people borrow money, and those with debt (and variable interest rates) have an incentive to repay it. Something like that - ignoring inflation at least.

Some people have been saying there is a housing value bubble. When interest rates were low, people could afford to buy more expensive homes. However when interest rates go up less people will be able afford new mortgages, and those selling will have less buyers, and they'll have to reduce prices to sell, and that could cause deflating prices. Similarly economic downturn where more people need to sell because of unaffordable homes, again, there'll be too few buyers for good prices. Such people might need to sell at a loss - even below their mortgage balance to get a sale. Obviously mortgage lenders want 20% down to get avoid this danger - and charge mortgage insurance otherwise.

Overall it would seem to me to be more "risky" for mortgage lenders. 30 year fixed rate mortgages seems insanely optimistic. If you set a rate that is too high people won't take your offer. If you set too low, inflation can eat all your profits.

As much as having a 5-year ARM Mortgage (4.75% for 60 months, 2.25% above U.S. security rate after that) seems scary, it offers the right incentives to me - to make extra payments early and often. I suppose many people get them because they figure they'll move in 5 years anyway, and its true - such people are better off with a lower rate now than a rate set on a 30 year gamble that won't happen.

Having the ARM saves me about $2000/year on interest for 5 years, or $10,000 "ahead" I'll be after 5 years. With luck I'll have 60% equity by then, and even at 10.5% maximum rate, I'm ahead for 2 years. So it's a gamble - fair enough. If I was loaning money long term, even with no desire for profit, I'd say "inflation+1%" and feel justified for that.

Later!

Selfish quest

One of the greatest values in advanced cultures is that it allows some people to take time on things beyond mere survival that increase our knowledge and understanding of the nature of our world and universe: scientists and naturalists can tell us stories that we'd never see otherwise.

The hardest thing for me to abandon in a fallen culture is the support of such explorations. Sure, some of them have economic benefits, but many are just a chance to stand back and wonder at the vastness of time and space and our place.

Such thoughts came to me seeing the APOD today, a high resolution HST image of a galaxy. You can see not only individual stars in this distant galaxy, but if you look at the blackness around it, you'll see many many smaller galaxies, much farther way, many visibly red shifted by the doppler effect of their high velocities away from us. Just a tiny area of the sky shows so much.
http://antwrp.gsfc.nasa.gov/apod/image/0505/ngc3370_hst_full.jpg

What are we to do? I hope they keep the Hubble Telescope going. And this is just one little thing.

And perhaps for all this wonder of the "dead" universe of physics, there's much greater wonder in life itself and the cycles of interdependency on earth.

Places like the dead worlds of the moon, Mars and Venus are perhaps most valuable to humanity in teaching us of the rarity of life in the universe. We may not be able to destroy the web of life completely, but we can reduce it immeasurable and our effect are perhaps ultimately no worse than nature has to put up with over a billion years of stresses. Still, our consciousness is something and we "know better".

It is hard to let go of ambition and power. We are a fortunate generation to see so far in so many directions. It's sad it must end.

In the future science (and art) may be more luxury than we can spare. People now make few sacrifices for science. I wonder how we can keep such roles elevated in times of hardship? I wonder how people can take such privleged roles without guilt, knowing they stand on the work of others.

It's all hard to take - our vast wastefulness - our unsustainable success - our collective dreams of godhood. So sad to let go of the dreams.

Star Trek will have to wait for now. We've a long way to travel yet - in inner directions.

Short memory

Time goes so slow sometimes (like waiting for the next Star Wars movie - oooo), and yet it moves along faster than any of us would like. (Was that really 10 years ago when we....)

I'm just old enough perhaps to realize entitlement and expectation build up over time and we forget our roots. Like was there really a time when we didn't have the internet and email? Wasn't that in a different lifetime?

If I take time to step back from my life, my short local little circle that my mind travels in each day, I realize that the future isn't what it used to be.

On the surface of consciousness we're all travelling in a dream world - we wake up each day, eat breakfast, go to work, come home, have a few hobbies and maybe a family in between, and that's life.

Then I realize those stories told - like of the 60th anniversary of the surrender of the Germans in World War II. Sure, we've got wars now - our war on terrorism, but it's "over there" in the middle east, not here. The consciousness of WW2 was surely very different - we had an open draft - not just selective service. And what about the depression of the 1930's - the dust bowl farming - high unemployment - all that. Well, who can say how they felt about their time in history - perhaps many were quite comfortable but I don't expect very many. And now we're fighting a war against an idea "That the little guy can win if he can bankrupt his larger enemy." Well we used to be on the underdog side, but now we want money to rule the world - that is our money, so we can't afford to let the underdogs know they really do have power.

Anyway, I play with the idea that perhaps my life is an illusion, or it'll seem that way in a decade when circumstances have changed completely.

Perhaps on May 11, 2015, I'll be sitting in a refuge camp outside of Madison Wisconsin because a dirty bomb exploded in the Twin Cities and contaminated the entire region. Who knows? Perhaps I'll be in a small unheated barn a few hundred miles away on a farm, trying to get some sleep (along with a few dozen others) so I can wake up at 5am to help plow and seed a 180 acre farm - all because the oil economy has collapsed and unemployment caused a mass migration from the cities where jobs were needed on the farms. Perhaps a flu epidemic will be the cause of the mass migration as 25% of the population is killed.

The United States has overall never know really disruptive failure - excluding a civil war (which was never fought in my state), and the depression. Overall we've had a run of pure growth and expanding horizons.

It is all so unbelievable to admit that sooner or later, we'll hit problems that we can't solve by our vast resources alone. Hard to believe any of it. It is a dream just like this life is a dream, just a different one. Will it happen? When? Is there any point in "preparing"?

Space tourism by 2007?!

Apparently there is both the Means and the Customers to support suborbital space tourism (SpaceshipOne)

Article online at:
http://news.bbc.co.uk/2/hi/technology/4506133.stm

***
Mr Whitehorn said about 100 people had signed contracts to pay $200,000 in advance for a spaceflight, while another 29,000 had agreed to make deposits of $20,000 for rides.
The spaceships are expected to be able to carry between five and nine passengers per flight. Each flier will have his or her own window to enjoy the view and can unstrap to float freely during the four to five minutes of weightlessness planned for each excursion.
Mr Rutan said that if the private spaceships could be made as safe as commercial aircraft were during their early days, up to 500 passengers would fly the first year the service was available and 3,000 people by the fifth year.
"By the 12th year, 50,000 to 100,000 astronauts will have enjoyed that black-sky view," Rutan said.
***

29,000 people apparently have the means to pay $200,000 for a 4 minute ride above the atmosphere!

It beats my estimates by a long shot. Let's see: 500 people times $200,000. That's a gross $100 million dollar industry for the first year! And up to $20 billion over 12 years!

Perhaps I was wrong in my assessment of an "unviable" industry. However once the initial novelty runs off (first 100 in space), perhaps people will reassess the value of spending $200,000 for a 4 minute amusement ride. Who knows? Maybe people are sillier than I thought?

Personally I think it is extravagant and selfish use of money, but it's what we have right now. Some people can throw away $200,000 on amusement, while others won't make that much in a lifetime.

Some might say it is "harmless" - better than $80 billion in miltary spending in Iraq perhaps.

I suppose it does create some envy - from those who can never afford it (or don't choose to afford it).

Sure, under the right conditions I might take a ride into space. I think it would require the invention of a nonpollution unlimited free-energy source, which I don't expect will ever come to us.

Overall I'm just too greedy with my hard-earned money. Perhaps if I was a stock millionaire with Microsoft I'd think about it, but 4 minutes? I think I'd still need a little more time. I'd not go to space until at least I could hitch up with an orbiting space station and hang out a bit. You know, enjoy the view for a week or so. That's be worth it.

Ah, still, I admit, I'd probably not do it. I mean we can get some good cameras in space to photograph the beauty of the earth. Why not just make a good OMNI theater experience - real time views from space and all that. That's more my style, and I don't have to risk getting killed either.

Yup, call me a chicken, go ahead, but it won't change my mind.

Minnesota Gambling Expansion and Income Tax

I was wondering why the Minnesota Governor and republicans have been supporting an expansion of gambling. I guess the answer lies in a recent Minnesota Poll that says 42% "strongly support", 15% support, 8% oppose, and 29% strongly oppose a "Racino" at Caterbury Park.

I guess the lure of "free money" is too hard for a majority to resist.

Screw any relationship with the northern indian tribes of Minnesota (as originally suggested by Pawlenty). We just want the money.

Perhaps it is unfair to me to judge - since I think casinos are rather bizarre recreational pursuits. "Hey Joe! It's Friday night and I just got my paycheck! How about you? How 'bout we head over to the casino and see how fast we can lose our checks in the nickel slots, huh? heheheh"

Do we really need the government to protect citizen's from their choices in entertainment? Aren't "sin taxes" the way to go?

Heck - I'm an environmentalist. Just think of all the fuel wasted on people driving way out to Mystic Lake, Hinkley Grand, and Turtle Lake.

It is nice to know that the "Minnesota Taxpayer's league" is against expanding gambling: Gambling: A Losing Bet for Minnesota
http://www.taxpayersleague.org/issues/pr_display.php?rid=249

It's nice I can agree with the TPL on one issue.

I've long voiced a position against the Lottery, and against state sponsored gambling, and that voice has been largely running against the current. People nod and accept the moral idealism, but keep that separate from the bottom line of keeping their taxes low.

The tax issue is an interesting one. On one hand the "low tax" crowd have it easy - self interest plus an ideal of keeping government spending growth under control. I'm impressived by the DFL willingnes put forth a tax increase, even if it is only adding a 4th tax bracket for the super incomes.

Will higher taxes on super-wealthly REALLY drive those people to other states? I suppose there will be positions where they'll be between two job offers - one in Minnesota, and one in say Illinois, similar job, similar benefits, similar cost of living, except for higher income taxes here.

Still STATE income taxes better than Federal taxes pay because the benefits stay closer to home. I'd UNCONDITIONALLY support across the board tax increases OVER any gambling tax income for the state.

Easy to say. Perhaps my "share" of this increase might be as high as $1000/year. Well, even so, I'd pay it happily. ESPECIALLY if it helps make the difference between a government that BORROWS+SPENTS and PAY-AS-YOU-GO.

Of course we might imagine "tax-grumblers" will say - "Go ahead, write out a check to the state government. Put your money where your month is."

I can afford it certainly, at least by income and minimum bills, but I do have quite a bit of mortgage payments ahead myself, and not unlimited certainty my job (or future employment) will provide for this debt. I'd rather put my $1000 as an extra mortgage payment now and get out of debt faster.

So what I'm saying is "I'm well off, but not secure I'll always be well off. Therefore I can't afford to be generous with 'extra' tax payments now. Maybe someday." And I'm generally projecting that someday will never come because economic downturns from the end of cheap oil will knock our economy into "The Long Emergency" where the only certainty is that the past was easier than the future.

Partly, in this sense, I am also concerned about "government growth" and increased dependence of people on government services. These are all great, but if the economy turns down, the government may no longer be able to do what it does now. Therefore it is better for some services to have more independence from government funding.

I suppose this isn't news to ANYONE dependent upon state government 'subsidies'. Schools, Colleges, Social Services, Hosiptals, Nursing homes, Post Office, Prisons, City and County governments, road/bridge infrastructure, Parks and wilderness etc.

It's perhaps unfair to call these 'subsidized'. We might as well call most of them as "ownership" or stewardship. You don't say a parent 'subsidizes' his children, at least not while they are underage. I still accept it in the sense of dependency.

There's levels of responsibility in all dependency. There's responsibility in the present in providing for immediate needs. There's also responsibility in promises for near-future needs. Lastly there's responsibility in assumptions/expections of continued long term needs.

Government is about planning, and so ideally immediate needs are already within the framework of past decisions. Budgeting future contributions to projected future needs is vitally important to both government and the service providers.

An example failure is when the State Government fails to provide clear promises to schools for their next year's budget. Schools, unable to guarantee funding, are forced to lay off new teachers in the spring, and rehire them in the fall if sufficient funding does come. Apparently there was also an issue of government delaying payments from previous years, causing schools to need to borrow money they have to spend early and HOPE state funding will repay it.

Long term projections of needs and funding is of course problematic, however good we are with projecting. The future economy can turn up or down, and there needs to be sufficient "savings" within the government to cover promised payments in the short term at least.

In my own budgeting I project a continued income into the indefinite future - considering I'll keep my current job, with perhaps a 3-4% pay raise each year, even if that barely covers the 3% inflation from 2004. I have some flexibility, so I can safely "overbudget" projections of growth in predictable utility costs like electricity, heating, water, trash, etc. I can then figure out how much I'll have left over to put towards my debt - which reduces my long term costs.

I imagine a government can also do a similar sort of budgeting even if 1000 times more complex. Still I realize that all my projections are budgeted on a SINGLE income source, at least single primary source - my salary. My entire budget is hinged on continuation of a salary. If I am laid off, probably it'll be because of an economic downturn where it'll be hard for me to find a job of similar salary. So a TRUE budget would have to imagine "Emergency conditions" where my income was suddenly cut in half, or even to 1/3 as a worst case perhaps.

Perhaps it is foolish to put much time into such worries, but some seems valuable. When I got my mortgage, I did consider the stability of my employment income as a large factor in taking on this new MASSIVE debt.

Similar for the government, it really should, if responsible, consider a PLAN B, where a perfect storm of economic hardships come that reduce projected income OR increase projected needs. ALSO, given such a projection, it ought to share the results with those organizations dependent upon their funding.

I don't know what "worst case" might look like for a state government, but it would be harsh I'm sure. Much worse than even recent downturns.

Generally the defense against downturn is Diversification, as they say in investing. That is true for individuals and for government. As an individual I'm overly dependent upon a primary source of income.

Governments (all levels) split their revenue sources from: Income Tax, Sales Tax, Property Tax, and User Fees. That's a good split I think. I'd imagine "income tax" as most unstable source, although sales tax also might be given "staples" (food and clothes) are exempted.

Well, I know I'm babbling, working out things without really knowing much at all in specifics. I just can see that it is reasonable for the government to budget on plans A, B, and C, at least looking out past the immediate next period. Plan A means more revenue than expected, and Plan C is less revenue.

We imagine that Plan B was the level that we "promise" funding. So if Plan A comes out, we'll have extra money to pay off debt, pay back to taxpapers, or give to one-time projects. If Plan C comes out, we've still got promises from "Plan B. Some of those promises ought to be kept, and some might be marked as lower priority and reduced as conditions demand.

Well, the advantage of spelling this out gives organizations a "heads up" on their future, and if they are on the "lower priority" list, they ought to be prepared for soliciting wider funding OR setting their own priorities for cutbacks if necessary.

Overall it seems horrible. I feel relatively secure in my employment. I'm not in danger of a layoff. Being in a small employee-owned company, I think we'd serious consider across-the-table salary cuts first, along with reduced hours perhaps, at least as first choices. Equally we're lucky for having minimal debt, so we are in direct control of our expenses. We could "downgrade" our rented office space as a last resort to cut expenses. We also seem to have a relatively niche market perhaps where we have been able to raise our product/hour rates based on increased costs. Still we do have contracts with government groups, and apparently funding there has not been cut enough to hurt us.

It's not fair that Teachers, Social Workers, etc, people helping the young and the dependent among us are most in danger of losing their jobs based on economic conditions. I don't have a solution. I accept there may be some wastefulness in government spending, but overall I trust most of the government activity is important and necessary.

I'll rejoice when the day comes that a majority support an across the board income tax increase in Minnesota. Then I'll know something important has changed.

Until then, individualism and self-interest seem to be the law of the land.

The Long Emergency

I bought a copy of Jim Kunsler's new book "The Long Emergency: Surviving the Converging Catastrophes of the Twenty-first Century"
http://www.kunstler.com/

He paints things pretty gloomy compared to the rosy future most people see. I've only read the first couple chapter. I think he could use more qualifications on his "facts" overall, although I think if I tried writing a book I'd overqualify until it was unreadable.

Well, take his "facts" on page 66:
* Total conventional oil (before we started using it): 2 trillion barrels
* The world has consumed roughly 1 trillion barrels.
* A substational portion of the remaining "half" will never be recovered.
* After [world] peak, depletion will proceed at 2 to 6%/year.

The USGS would argue with the first one above. They have different numbers:
http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2000/long_term_supply/sld010.htm
They say there's a total of 6 trillion ultimate reserves, with 3 trillion unrecoverable. They expect a total of 3 trillion to be producible, with 0.8 trillion already consumed (in 2000 apparently), 0.9 trillion in proved reserves, 0.7 trillion in undiscovered, and 0.6 trillion in added reserves with new technology.

So they claim a 95% confidence for 2.2 trillion ultimate reserves, and 50% confidence for a 3.0 trillion ultimate reserves, and 5% chance for 3.9 trillion ultimate reserves.

So subtracting past production (rounding up a bit to 1 trillion for 2005), gives ultimate reserves from 1.2 to 2.0 to 2.9 trillion barrels left.

Sure, they're perhaps being overly optimisic, and I'd rather take lowball numbers for planning my future, but it does make a big difference which number is correct. Kunsler's words ought to give some statement of a range at least.

In comparison, ASPO, low-ball estimate:
http://www.asponews.org/docs/newsletter52.pdf

Says ultimate recoverable reserves 1.85T to 2.4T (depending on definition of oil sources), with 0.945 to 1.04T barrels consumed past, again depending on categories.

Maybe I'm wrong. Maybe "simplification" is best stated as "1 trillion consumed, easy part in friendly lands, and 1 trillion left, mostly in unfriendly lands.) Time to chart a new course!

SECONDLY, Kunsler's statement that "substational portion of the remaining half will never be recovered" may or may not be true, but it's not consistent with general statements of reserves as "proved recoverable". Even Campbell and ASPO call their 2 trillion ultimate RECOVERABLE reserves. That means to me "positive energy balance".

Admittingly it is worth considering energy costs. Even if there's a net positive energy balance, the ratio is important. If there's 1 trillion barrels left, and it will take 500 trillion barrels of energy to extract all of it, then (on average) you can't really say you have more than 500 trillion barrels NET available energy.

LASTLY the 2-6% depletion curves are important to note for projections, but of course not "facts" but opinion. Since we've never had a "world peak", we can't say, but I accept 2-6 is a wide range.

Well more later!

Nature's Revolution

The ruling class of any biosphere is the group most able to exploit the "lower" forms for increasing and maintaining their power.

Beasts of Burden have been enslaved by humans since prehistory, and although we currently don't much need their brawn at the moment for labor, we at least need animals for our food.

Human slavery is perhaps equally a prehistoric origin, even if forms vary and heights didn't occur until large city-state empires like the Egyptians.

Human slavery helped build early America, and may or may not have changed greatly after the Civil war. Human labor becomes valuable more for complexity of behavior more than muscle power.

The Industrial Revolution invented a new slave - automated labor by machines, powered by water, by steam, and eventually by hydrocarbons - coal, oil, and natural gas.

E.F. Schumacher, author of "Small is Beautiful", wrote about his beliefs that modern methods of production have not been mastered as long as we've not mastered the source of energy that powers the production.

I sort of feel like modern life as a master/slave relationship, where we're riding a wave of cheap slaves as long as oil is available to power us. Each of us OWNS or aspires to own an automobile, most weighing over 2000 lb, and capable of traveling 80 mph on good roads.

Thus comes the old saying about "Power corrupts", and we all build our lives as if the power available will always increase. Meanwhile as a country (and even as a continent) we've peaked in our oil production, and just hoping other lands will continue providing us with our energy, ignoring the possibility that others will also aspire to "catch up" to our consumption.

The U.S. has about 5% of the world's population and consumes about 25% of the world's oil each year. The world used about 84Mbbl/day currently and even the most optimistic projections say the world will never be capable of producing more than 100-120 mb/day, and those hopeful limits will (by definition) come at the end of production increases when rates will decrease and the world will have to make due with less oil each year than the last.

Estimates of remaining recoverable convention oil vary from 900 billion barrels to as high as 4000 billion if you're a super-optimist and expand the definitions of oil sources.

Taking current world production, these reserves divide out to be 30 to 130 years of reserves. (at 84mb/year)

If the world used oil at the same rate as the U.S, the oil would run 5 times quicker or 6 to 26 years. (Not that the infrastructure or geological limits could support such rates)

What gives the right for the U.S. to consume oil at such a rate? I imagine the same question could be asked about human slavery. What gave early Americans the right to enslave kidnapped Africans for slave labor?

You may not consider these questions comparable, and I'm not going to argue on moral grounds. My point is actually simple - We took the right because opportunity knocked and we answered the door first.

I don't know about the sustainability of human slavery. I've heard that some populations had slaves outnumbering nonslaves, which makes control a hard issue.

Our current slaves are not the sort that rebel directly. We "kidnap" our oil slaves from the ground, process them into plastics and fuels, powering our processing and transporting with the slaves themselves. We're in a "positive loop" as long as we keep increasing our ability to extract more slaves.

If there's going to be a rebellion from our current slave trade, it'll have to be from Mother Nature herself.

Global Warming is one way Nature's responding to our CO2 productions. Atmospheric CO2 has gone up by 50% since the beginning of the industrial revolution, and higher than any estimated levels over the last 20 million years. The effects of CO2 increases are complex since there's many feedback loops. The balance of nature is being upset by more than just burning hydrocarbons, but by changing landscapes as well - clearing forests, causing desertification in many areas. The global warming appears to have the largest effect in the higher latitudes, and this new warmth appears to be having the affect of melting glaciers, melting permafrost landscapes. The permafrost may be an even more dangerous climate change than any other since it contains large amounts of methane gas frozen in the ice, which if released can increase global warming even faster.

The success of humanity may have already passed a point of no return - of using more resources than can be sustainably developed from the environment. So we're left with two directions for collapse - we may keep growing until natural catastrophe knocks us down, with the source being our stressing natural systems, or energy or material resources will dry up and we'll find ourselves unable to continue our growth.

Perhaps they are two sides of the same direction - left or right - system failure on the left or source failure on the right.

Some say this expansive "growth" as a cancer. Some may say humanity is just "growing up", coming into our own.

We've tricked ourselves into a lifestyle of wealth and promise, and yet we can't promise our children the same benefits.

President Bush says he wants to protect the solvency of Social Security in the year 2040, while holding 600 trillion dollar budget deficits that will tank the economy within a decade.
http://www.concordcoalition.org/facing_facts/alert_v10_n1.html
http://www.realclearpolitics.com/Commentary/com-1_27_05_MK.html

President Bush wants to send Humans to Mars after 2030, while we can't even guarantee we'll have fuel for our economy by then.
http://www.cbsnews.com/stories/2004/01/14/tech/main593184.shtml

Heck apparently we can't even afford to save the Hubble Space Telescope, but we're going to get a flag and footprint in the Sands of Mars. What a sense of priorities!
http://www.savethehubble.com
http://en.wikipedia.org/wiki/The_Sands_of_Mars

Anyway, I don't want to blame Bush. He's just a reflection of American expectations. We're all to blame for his election whether we voted for him or not. How much can a president really do?

Would a Democrat President be much better? He or she'd be just as beholden to economic interests that is sending us into unending debt and ever increasing risks of a crash.

No, politics is all well and good. But it will take grass root to change our direction.

SURE, you can believe that "cold fusion" or "free energy from the vacuum of space" will soon propel humanity into the next great adventure and conquering of space and other worlds. It's not a bad vision on the surface, and as much as I fear "free energy" might destroy us as well as anything else, I'll keep open a door that something new might be discovered in the next 1000 years that changes everything.

On the other hand, I expect in the short term, savior-in-the-sky or not, we're riding a small boat on a large wave that will soon be crashing onto a rocky shore. Human ingenuity be praised, and we'll need every bit.

It is interesting that idealism and morality point towards a perfection that can never be achieved in reality. Jesus apparently talked about the Lion laying down with the Lamb, a dream that natural needs for hunger and competition will end in heaven.

The late Pope John Paul was a strong defender of Life, human life at least, and the whole "prolife" movement itself is noble ideal to follow in a pure form.

I must wonder how morality and desire for perfection will ride out in times of hardship. I suppose modern Africa might be a good place to look, where AIDS had cut deep into communities and populations.

I guess I expect under times of great death, resources won't be available to meet the wider needs, and in the place of knowledge and science will come superstition and mythical explanations of why things happen.

I have my own myths - of Mother Nature (MN) as a dual goddess - life-giving AND like-taking. I think she's a better myth than GodMan-In-The-Sky (GMITS). GMITS purports to be all powerful and is above the laws of nature. MN in contrast is a dependent sort of Goddess. She'll make do - make stone soup when that's all there is, and hope the natives are kind enough to add their share. She NEEDS us for Her survival as much as we need Her. She doesn't need our "worship". She needs our patience and wisdom to see her needs and cooperate - to become a part of a larger system rather than above it.

Ah, nice words, but I know I'm of the GMITS culture, and she's just a slave girl, available to meet our needs.

So The Revolution may be close at hand, or yet decades away. Whichever, I'm convinced she'll come back and assert herself, and the revolution, whatever form it takes, won't be pretty like our Lions and Lambs sleeping together.

It seems all we can do at present is surrender our hope for security and for mercy.