Honest Abe Analysis

I much appreciate when ANYONE in the media points out the insane federal deficits and debt, most dishonest, borrowing "under the table" from SS without counting it as part of the deficit.

All the BS about "reforming SS" is complete nonsense compared to the theft of this "trust fund". Of course SS is NOT a trust fund, but the money collected for it WILL be repaid with interest someday and the FUTURE taxes needed to repay this will be MUCH LARGER than the projected shortfalls in actual payments of SS benefits due to insufficient collection.

Anyone expecting SS payments in 20 year or longer away can have their delusions properly grounded now - there's NO MONEY to pay it, and whatever sort of budget that exists then, you can be SURE that it will NOT be raised sufficiently to repay SS borrowing from the present. Heck, who even knows if we'll be paying back EXTERNAL debt, like that China is lending us now to prop up our sorry debt economy.

Anyway, I can be calm now since I know the truth. Elected reprepresentatives DON'T CARE about anything more than 4-8 years ahead, so it's not their problem. And those that DO CARE are doing the BEST they can to STEAL as much for their interests NOW while the GETTING IS GOOD.

Any elected official whom calls for fiscal constraint is talking from the side of his mouth - talking about OTHERS spending, not the spending that benefits his interests. Only a sucker turns down free money, and the pork is THICK and JUICEY as long as we keep our eyes blissfully closed to the future.

---

http://www.startribune.com/484/story/709187.html
U.S. deficit's funny math
Kevin G. Hall, McClatchy News Service

WASHINGTON
The U.S. government will close the books on fiscal 2006 Saturday, and politicians are likely to trumpet that the federal deficit came in almost $60 billion below projections. Problem is, they won't be using the same math that you use.

The nonpartisan Congressional Budget Office has projected that the federal deficit for the fiscal year ending Sept. 30 will total around $260 billion, aided by a surge in revenues. That's $58 billion lower than last year's deficit and about $77 billion lower than projections at the beginning of the fiscal year.

Great news? Budget experts in Washington and on Wall Street say it's a welcome development, but misleading. Washington's funny math excludes the Social Security trust fund, which is running a $177 billion surplus this year. Washington spends it, but doesn't count it as spending. It's officially listed as "off-budget" borrowing.

"In practice, all the money Washington collects goes into the same pot and gets spent the same. On paper, we say we'll pay Social Security back later," said Brian Riedl, chief budget analyst for the Heritage Foundation, a conservative research center.

So the deficit is actually about $437 billion, the CBO calculates -- the $260 billion official deficit plus the $177 billion borrowed from the trust fund. Since the money is "borrowed," it adds to the gross federal debt, which is expected to reach about $8.5 trillion by Jan. 1.

This is why New York investment bank Goldman Sachs & Co. issued a dour report Sept. 22 titled, "The U.S. Budget Outlook: No Lasting Improvement."

A longtime gimmick

Spending trust-fund money to mask the true size of the federal deficit is a longtime Washington gimmick, but even so, Heritage calculates that the Bush administration and the Republican-led Congress have increased government spending by 45 percent since 2001. Heritage uses spending numbers from the White House Office of Management and Budget.

Federal spending increased 9 percent in fiscal 2006, the biggest jump since 1990. It's risen sharply for education, agriculture and several nondefense programs as well as for the war on terrorism and homeland security.

"It's really been a guns-and-butter spending spree," Riedl said. "Of all the federal spending increases since 2001, defense and homeland security combined are responsible for less than a third."

Heritage calculates that discretionary spending, excluding defense and homeland security, has increased by 7 percent annually during the Bush presidency. That nearly doubles the 4.2 percent annual growth under former President Bill Clinton.

The current spending increases appear less dramatic, however, when they're viewed as a percentage of gross domestic product (GDP), the total value of U.S. goods and services produced in a year. In its midyear review, the White House projected fiscal 2006 spending in the ballpark of 20 percent of the GDP. That's about the same as it was for most of the 1990s, although up sharply from 18.4 percent in 2000.

"We're in a situation where the immediate cash budget isn't the issue. People shouldn't focus too much on that," said Robert Bixby, executive director of the Concord Coalition, a bipartisan grass-roots organization that advocates balanced federal budgets. "The real issue we need to start paying more attention to is what sort of enormous balloon payment are we setting ourselves up for in the future."

Looming just over the horizon is a huge demographic shift that will strain the federal budget enormously. On Jan. 1, 2008, the first baby boomers -- 76 million Americans born from 1946 to 1964 -- become eligible for Social Security benefits. From that point on, a two-decade assault on federal finances begins. The federal government will turn to an ever-declining number of active workers to pay for the health and retirement benefits it has promised to baby boomers.

"For people who think that's a long ways off, the first baby boomer collects their first Social Security check in 14 months," Riedl said. "No economic boom can make up for Medicare rising 9 percent, Medicaid rising 8 percent and Social Security rising 6 percent."

From the Wilderness

A fun website, I peek at occasionally:
http://www.fromthewilderness.com/

I just read the founder, Mike Ruppert, left the country a month ago after a break-in at his office:
http://copvcia.com/free/ww3/081606_burning_bridge.shtml

I listened to a 1997 speech he offered tracing the CIA involvement in drug running, apparently to fund their under-the-table activities.
http://video.google.com/videoplay?docid=-7009998324250484369&q=Mike+Ruppert&hl=en

A strong mind certainly, and I listened to him not necessarily to accept his truths, but more to evaluate his mental state. Impossible to tell anything, but I heard a mind determined to connect the dots, and my skeptic, not wanting to contradict him, but just thinking perhaps he's batting 90% truth, perhaps 10%, but whatever the incorrect hypothesis fraction, myself that's where I WORRY, and I would be more likely to PROTECT my mental sanity and say, maybe, I don't know, rather than accept.

I must imagine it takes a lot of mental and emotional energy to hold the bigger picture in view, always holding up provisional truth, building a house of cards always one piece away from taking him in the completely wrong direction.

I wonder how many SMARTER people could take his intellect and passion and misdirect it for their own aims, and how much he could become an unintended tool. That conspiracy world is too much for me, and I'll admit that. I'm a skeptic as a self defense, not because I'm not gullible. I take people at their word, and I have a hard time believing people openly lie. Sure I see the old "shame" thing - people lie when their egos are in danger of bruising, but for greater power? Yes, I believe it, but only abstractly, not in the case of any individual person apparently speaking their truth.

Well, I also know there's mental illness as well, and smart people, good at connecting the dots, they use their talents too well, and can't turn it off when it is hurting their mental balance. Heck, I can qualify there, except for a little sleep and conforting forgetfulness to life's little existential crises.

I connected to Mike most through the "peak oil" movement, although he "joined" that one somewhat late in his game. He became a spokesman for them merely for the forcefulness of his mind and passion that something is afoot, and he was a believer.

Now with oil prices comfortably in the low $60's, the short term fears are reduced, and reasonable doubt can return to the reasonable - that probably "peak oil" isn't quite here yet. WHILE we know it's still coming, WE, those believers that the free lunch must end. Just because the sun rose yesterday, doesn't mean it'll always rise like we expect. We who wait, and while we wait we read the signs, we listen to the forecasts and wonder when.

My "grounding" if I have ANY, is mostly on good fortune so far in life, so I'll let it carry me along - sorry Mike - and try to live reasonably responsibly with my good fortune now. I accept it could be taken away, and I accept MY OWN mental stability is at stake, so I'm glad for a little corner of the world to care for.

Certainly Mike's world view is disturbing to me. I can consider power corrupts and all that. At least my money isn't too much supporting the crazy debt economy. Could drug profits really be supporting unground "shadow government" organizations? Well, I suppose no worse than underground "mob" doing the same. Both focus wealth in ways that can corrupt.

Poor Mike sees the "honest American" as complicit in the crimes of his government, for not standing up for truth, for not risking his own comfort and security to help expose the corruptions around us. Certainly his moral arguments are true to all, in cases like Nazi Germany and the concentration camps, and may come to that in American herself, sooner than we could imagine.

Heck if I know what I'd do if a hidden police state slowly took over, and people disappeared, with just enough grease to keep us from speaking up to our little truths.

Certainly I accept a government that can declare human beings as "unlawful combatants" and lock them up for years without a trial or access to communicating with their friends and family. That's not a good sign that we're heading down a good road.

One thought about Mike, heading off to Venezuela, I wonder if he is perhaps an idealist, to imagine that there's less corruption or injustice there. It is easier to find "new friends" than to trust them, or be any safer to know more of their ways of expressing power.

I think Mike would have been better off to abandon the conspiracy world, and work with the "realocalization" movement to build a smaller world of dependency where trust could be earned through time rather than through merely common enemies. Perhaps he even wanted to step down into that simpler world, but his powerful mind couldn't let go of the bigger picture he's spent a lifetime trying to sort out.

I don't know what's true, and I don't know how much corruption can be brought to light fast enough that justice can be served. I'm glad there's people who will fight the good fight. I am yet perhaps like Mike, seeing the system as the problem, but fearing the "solution" may seem too small for our imagination - subsistence farming, some children to remember us, and a moment in the sunlight. It seems a small destiny when we can imagine bigger things.

So we're all corrupted by our ambition perhaps, those of us who want to see the invisible world around us and know the future, and know what costs it will bear for our excesses.

The protected investor

Perhaps those investing in oil hedge funds lost a lot of money this fall, with oil prices (temporarily) fell by 20%. There is RISK investing.

However in general I accept that the nature of capitalism is that smart investors will get ahead parly through their own good sense, and partly because the system REWARDS the investors with protection from some of their own excesses.

This is done in the world economy largely by the U.S. Federal reserve, and its control over the supply of money. It's not perhaps a lot of control, and I'm not suggesting it is corrupted, but it IS SOMEWHAT "maternalistic".

It is not in the interest of the government to allow the system to collapse, so it'll do whatever is necessary to avoid this. Therefore investors, if their failure harms the system can take more risks AND the goverment will do whatever is necessary to help you succeed.

One example of this is in inflation. Inflation is BAD for investors because they have to wait for their profits and inflation means they'll be paid back less than otherwise. For example, SOMEONE is invested in home mortgages, rates as low as 4.5%, but inflation CAN exceed this. Well, I'm not sure how this works, why people would invest in such RISK except trust that inflation will stay lower.

The level of debt in our society is astounding to me - between government and individuals - and most of all the outflow of wealth. Ultimately I believe this TRUST in the system allows people to take risks otherwise impossible. When things are good, we can accomplish a lot more, a lot quicker, but when things turn down, the house of cards will fall down.

The great depression was a failure because of excessive risk, and leveraged debt that could not be repaid. I must believe however much smarter we are now with keeping the system afloat, we're just a taller house of cards, which may take longer to fall, but fall it must.

But until that fateful day, investors are protected to take their risks. If I thought risks were taken towards a safer future, a more sustainable way of living, maybe it would be acceptable. But no, our success is redirected into "economic growth" which promotes more growth, and raises the height we can fall when the safety net finally breaks.

It is easy to talk nonsense, but we're all talking nonsense, when we think we can continue on the path we're going.

What can we do about it? Our best SHORT term interest is to PLAY-THE-GAME, and our best LONG term interest is to change course.

The bigger picture

Being just a programmer, just a hack with a math/science background, I work for an engineering company, full of more engineers with real knowledge of what can be done with sticks and stones, and how to reasonably model them with computers.

The real world is a messy place, and it is amazing what we have done with science and technology to make the matter of the world into something completely new.

Still, I have to wonder if engineers, sitting close to their toys, have any chance of judging the big picture?

I accept E.F. Schumacher's position, that we may have solved many technical problems, how to manipulate matter, but the game isn't "solved" until we master energy sources that don't get used up much faster than they're created.

We're living in a in piggy bank of hydrocarbons and whether they get depleted or their pollution changes our climate first I can't tell, but both are worthy to worry about.

In terms of sources at least most engineers are optimists. They see a world weighing 5.9742x10^24 kgs and figure there's enough bread and cake in their for all.

They are excited by the discovery of up to 15Bbbl of oil or natural gas in the deep water, far under the sea floor of the gulf. Surely if we can find ONE big new find there, so deep, we can hope for hundreds more around the world, all just waiting for billion dollar oil rigs to drill them.

Clearly there is an issue of diminishing returns of oil. Oil started at energy out:in ratios of 100:1 or more, and perhaps are still so high in some middle eastern wells, but this ratio does go down year by year, as the easy stuff gets extracted first. Energy ratios are dependent upon technology, and necessity will push us a long way.

And the engineers are excited because they'll have profitable jobs for a long time, at least if the economy can keep humming, and they're helping to POWER that hummmm....

But when do you change course? When does oil get to be too expensive? The economists say when oil gets too expensive, alternatives will take over, and I believe it, in the necessity sense, but what about the conversion costs? If we KNOW oil must be drained (and we know burning it is changing our climate in an uncontrolled experiment), why not start early?

When oil reaches $200/bbl, I'm sure we'll be lookin harder for alternatives. When will alternatives be competitive? It can be a moving target - like producing ethanol from fossil fuel for fertilizers, tractors, irrigation, distilling, etc.

It is curious to see gasoline prices drop from a high $3.19 a few months ago to $2.17 low this week. I can "blame" this on the "fear premium" drying up with the boring hurricane season, and the changing season away from transportation fuels. $63/bbl oil is still high, and I accept it could yet go lower for a time, but I hope not. Not because I work for a company that can earn money from oil, but because higher prices are the only signal that we need to change direction.

I'm glad I'm not an engineer or petroleum geologist, giggling away at the next big deep water find.

OIL may not be the end of us, but we'll be something very different when we can no longer find enough of it to keep growing our economy.

Spam me 40 times and I'll come back for more

For the last nearly year I've received about 40 spams per day at work. My employer had some antispam software but gave up on it when legitimate email was getting blocked. I was lucky before this I guess, but now I'm just doomed.

For example, I got this content just now, along with a link I shall not reprint here.
********
Hi
CIAxxLIS
VIAxxGRA
AMBxxIEN
VALxxIUM
********

I suppose the xx are meant to confuse simple software looking for exact matches on blockable content.

When I got back from a week vacation, I cleaned out 240 spam messages in about 12 minutes, or about 3 seconds per email. Obviously it is only an average and it got progressively slower as the fraction remaining became less and less spam.

Let's say an average spammer sends out ONLY 100,000 email addresses per effort, and sends 10 per days. HIS (and I'm SURE it is a HE) productivity is 1 million emails per day, which (if everyone is as unlucky as me not to have automation) eats up 3 million seconds of other people's time to delete them, or 34 days. If I'm paid $30/hour, including deleting emails, I can delete 1200 emails/hour, or about $0.025/email. So 1 million emails COSTS $25,000. So one person can cost the world $25,000/day in productivity wasted.

You gotta wonder about this "occupation". We don't know how much he actually gets for his labors. I imagine very little. In fact it seems like a rather hellfull job, even if there are moments of creative inspiration perhaps.

Well, I suppose were I a terrorist, trying to take down capitalism, I might START with taking out email. If four buttheads can cost $100,000/day, maybe an army of 100,000 could cost $10 billion per day!

Well, of course there's diminishing returns when the flow exceeds human capacity to respond t0. If I get 40, I can deal with it, but 400? Once a year after vacation maybe. And 4000?

It is curious why my email address hasn't been "sold" to even more spammers, but perhaps they all guard their little lists, knowing, we'll change email addresses if we get too much, so they have to stay managably annoying.

Maybe the "lists" get sold when people "move up", so each buyer just takes over the previous work load? Maybe "lists" are "certified" as active, and that work is what makes lists valuable. Who knows their business. I'm sure they're righting their books now, maybe make a movie version!

Jevon's Paradox and the Oil Depletion Protocol

http://en.wikipedia.org/wiki/Jevon%27s_paradox
Thoughts on this cruel hoax - that conservation is worth nothing. The more you "earn", the more you "save", the more you spend.

The "collective" value of conservation is limited when consuming nonrenewable resources. Short term shortages give value to conservation, but in times of abundance, it's wasted effort.

On the other side, we have idealists like Richard Heinberg, and his new book "The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse ", trying to conserve our way to transition before we have to by a voluntary reduction in consumpion.
http://www.newsociety.com/bookid/3931

If "peak oil" is just around the bend, the value is near, but if we can delay it for another 10 years, who wants to stop the party early? Maybe we'll have cold fussion worked out by then!

Well, I'll have to read his book, but for he moment, it seems hopeless. Self-interest demands diversity of energy that supports us, but as long as we can get the cheap stuff, conservation is for chumps. Seriously I have no reply to that, in a depressed anger sense.

The addict's choice

http://www.globalpublicmedia.com/articles/388
Congressman Bartlett said, "America has only 2 percent of the world's known oil reserves," noted Congressman Bartlett. "We produce 8 percent and consume 25 percent of the oil produced worldwide and import 2/3 of the oil we use. We imported 1/3 at the time of the Arab Oil embargo. Oil production in the U.S. peaked in 1970 and has declined every year since then. Alaska and Gulf of Mexico oil slowed, but haven't and can't changed that trend. Energy experts agree that America can never produce enough oil domestically to meet our current or future demand."

Overall astounding numbers by my reckoning. One fact he misses is how much oil we've already produced. Well, once source shows the U.S. (48) has produced (extracted) something over 170 Bbbl of oil since discovery, with something like 20BBbl left.



So apparently besides some deepwater oil and Alaska we've cleaned out 90% of the oil we're ever going to extract.

Back to Bartlett's numbers we're producing oil 4 times faster than the world's average, which means our last drops will be consumed four times sooner than average.




Meanwhile we have to import 2/3 of our consumption, and this number must grow year after year since domestic production must decrease, and no one predicts domestic oil consumption will decrease.

I'm on the side of OPEC in the sense that production ought to be controlled to create the highest possible long term profits. Afterall once its gone, it's gone and no more economy for many producers unless they invest their profits well.

So our best long term interest is to SLOW our production and import MORE, but this puts us at risk if imports dry up, so the safer choice is to produce locally full-out, and hope something better comes along when we can't do this any more.

The choices are not good, and we ought to be worried. In our more sober moments we ought to conserve. We ought to tax consumption and make alternatives more competitive. But when we have the keys to the liquor cabinette, we can't trust ourselves to say no when we ought.

At least individually we might see our problem and change our decisions in small ways, but we're still stuck waiting, hoping for something better to come along.