Tuesday, July 6, 2010

Private sector US employers lost $3.0 trillion Net Worth during Dec 2007 to Dec 2009, due to the banks

Employers in productive US industries lost $3.0 trillion of Net Worth during 24 months of economic meltdown (Dec 2007 to Dec 2009). The loss represented 19% of the capital which is used to create domestic products in the US.

Government FRB data keeps track of the total Net Worth of all businesses in the US. The (nonfarm, nonfinancial) business Net Worth peaked at the end of 2007, when US businesses had a combined Net Worth of $15.8 Trillion. In the Dec 2009 quarter, this (nonfarm, nonfinancial) business Net Worth bottomed out at $12.8 trillion. This was a loss of $3.0 trillion for corporate business employers in productive industries, during 24 months. (reference: table B.102, line 32, in

This loss of vigor by Productive employers demonstrates why "private sector" un-employment has increased in the US.

The productive sector of US Corporations experienced an upswing during 2010 and 2011. The combined Net Worth of the productive sector for US corporations advanced to $15.0 trillion at the end of Q2 2011.

The first eighteen months of economic recovery period for corporate employers (Jan 2010 through Jun 2011) have regained less than three-fourths of the Net Worth losses which Productive sector US corporations had endured, due to mismanagement of the US banking industry.

But US corporations were $0.7 trillion farther in debt for overall liabilities in Jun 2011 than they had been when the economic downturn started, in Dec 2007.

Sunday, July 20, 2008

A simple 10-year program can build-out 10% to 15% of US electricity from windpower: renew the PTC

During the next 10 years, the US should construct enough windfarms to allow more than 10% of all US electric power to come from windpower.

During 2007, the windfarms which were constructed in the US in that one year are expected to generate 0.4% of total US electricity in the future. And past experience with cancelling the Production Tax Credit (PTC) shows that the quantity of windfarm construction typically drops in half when the PTC has been cancelled. Obviously, it will take a very long time for windpower to supply 10% of US electricity if windfarm construction is only replacing 0.2% of total US electricity per year.

For 2008, the US is generating a cumulative total of 1% of its electricity from windpower. And 76,000 full time jobs currently exist in the US windpower industry. But the US would need about 150,000 full-time jobs, specifically for windfarm construction and manufacture, to allow windpower to expand to 10% to 15% of US electricity during a 10 year period.

GE's website proposes that its largest windpower turbines, if placed in the most optimal locations, might be able to generate electricity at wholesale costs of 3.5 to 4.0 cents per kilowatt-hour. (However nearly all actual locations for windpower turbines are less than ideal, so perhaps 8 to 10 cents per kilowatt-hour can be achieved based on current technology.)

Additional jobs for manufacturing windpower could be in the US, if windfarm projects buy wind turbines from US manufacturers, such as GE or others.

During 2008 there are 76,000 jobs in the windpower industry. This means only one worker per 2000 jobs in the US is currently working at building renewable windfarm energy. Supporting and increasing the number of these windpower jobs is dependent on extending the Production Tax Credit for renewable (windpower) energy, which was set to expire Dec 31, 2008. TARP legislation in 2008 has extended the windpower PTC for only one year.

The overall windpower which was installed in the US during 2007 is expected to generate 16 millon megawatt-hours of electricity per year
(reference: http://www.awea.org/pubs/documents/Outlook_2008.pdf ). The new windpower installations during this one year period will be supplying about 0.4% of the total electricity (4000 million megawatt-hours annually) which is being used in the US today.

Windpower-electricity is a proven technology. And the best time to begin the major build-out is right now. Let's renew the Production Tax Credit for windfarms. An extension of the PTC is the best way to double or triple the current manpower in the US windpower industry, thus allowing a 10-year build-out to attain 10% to 15% of US electricty from windpower.

Perhaps the right time to end the windpower PTC would be when 3%, or 5%, or 10% of US electricity comes from windpower. But it is too early to stop stimulating windfarm construction today, when only 1% of US electricity comes from windfarms.

Thursday, July 3, 2008

Successful Oil campaign

A "4th of July 2008" campaign of the Presidents Club has led to 200,000 barrels per day increased oil production by the Saudi's, plus an investigation of potential price fixing conducted by the CFTC. The slogan for this campaign was "Enough is Enough". The Saudi's increased oil production by 300,000 barrels per day in June, plus an additional 200,000 barrels per day in July 2008. http://www.cbsnews.com/stories/2008/06/14/world/main4181473.shtml

At the close of the Presidents Club campaign, a celebration party was held at the Executive Inn and Suites hotel in Tucson Arizona, on the 4th of July, 2008.

After our oil campaign succeeded, the commodity market price for crude oil has dropped by more than $60 per barrel, at least temporarily (or perhaps permanently). The commodity market price of oil on July 4, 2008 was $145/barrel; and on July 31 it was $124/barrel. Early in September 2008, the price of oil dropped to $105 per barrel. Early in October 2008, the price of oil dropped below $85 per barrel and continued declining.

Since the US currently imports 13 million barrels of crude oil per day, a price reduction of $60 per barrel of crude oil saves the US $780 million per day (through reduced import costs).

In November 2008, after the price of oil had dropped to $50/barrel, OPEC announced that it desired to stabilize the price of oil in the range of $70 to $90 per barrel. ( http://en.rian.ru/world/20081114/118313140.html )

Saturday, May 24, 2008

The New Square Deal - by Charles Skelley

Candidate nickname: geo-Chuck
Program slogan: Fix it now.


1. National economics should be based on the principles of Adam Smith: Wealth of Nations, Book 2, Chapter 3 (plus some advances of the New Classical Macroeconomics, which have been developed since 1986).

a. According to Smithian economics, a benevolent government should stimulate "Productive" Jobs, and should remain perpetually cautious about having excessive "Unproductive" jobs or "Unproductive activities" in its society.

b. The products which are made in any society by the Productive workers (such as food, clothing, and shelter, etc.) are distributed among both the Unproductive and Productive people of that society. Therefore in a properly functioning society, the Unproductive workers and Unproductive people typically visualize their role as being "helpers" to the Productive workers in their own society.

c. Smithian economics (WoN, Book 2, Chapter 3) says that when a society experiences a substantial decline in its lifestyle, the problem almost always results from having Unproductive people consume too much of their society's goods and services. The Smithian category of "Unproductive" work includes, but is not limited to: Government, Military Defense, Doctors, and Lawyers.

2. A society should put excellent tools (= Working Capital) in the hands of its Productive Workers, and try to minimize the things which hold back production. Laws should be as simple as possible. This was the original design for the US Federal Government. That principle still works today in most countries of the world. It will work again in the US if we give it a chance. It can allow us to govern the US like presidents Thomas Jefferson, Abraham Lincoln, Theodore Roosevelt, Franklin D Roosevelt, John Kennedy, and Ronald Reagan, all rolled into one.

3. US manufacturing has been suffering from a shortage of "physical working Capital". About 30% of US jobs were in manufacturing during the 1940's and 1950's. But only 10% of US jobs were in manufacturing in 2007. It was unwise to allow US manufacturing to collapse so rapidly. The fact that the US continually ran a large Trade Deficit during 1971-2007 (and/or a large Current Accounts Deficit) confirms that, both today and during every year since 1971, the US needs a higher percentage of its jobs to be in manufacturing. But the collapse of US manufacturing has been due to an persistly increasing shortage of Working Capital in the USA. Unproductive jobs can be backed by less physical working capital than an equivalent number of Productive jobs. Consequently an abundance of Unproductive jobs can be created when there is a shortage of "physical working Capital". That has been happening in the US since 1971. And it explains why US citizens have not been able to sustain our previous lifestyle.

a. The United States in 2003 had the worst ratio of exports to imports, among the 35 largest national GNPs in the world. This is demonstrated by graphs at:
In the link above, larger "percentage" shortfalls in exports indicate that a nation is less competent in creating products than a "normal" country. Therefore nearly every other developed country of the world is better equipped to compete in today's global markets than the US.

b. During 1971 - 1986, the US should have created physical working capital about 1.5 times as fast.

c. During 1986 - 2008, the US should have created physical working capital about 2 times as fast.

d. If the 1971-2008 shortfall in creating US physical working capital had not occurred (totaling approximately $8 Trillion of lost working capital during 1971-2008), then today's GNP output of "US products" would be approximately 25% to 33% above today's actual output by US workers, while simultaneously reducing debt, balancing the Trade Deficit, and restoring a normal amount of Personal Savings for the US society as a whole.

4. Economics research, using large data sets, has shown that the amount of physical capital in a nation's economy is, by far, the largest single contributor to the differences for GNP output per capita. Approximately 64% of the differences among 98 national economies (during a 40 year period) can be explained by physical capital alone. Multi-variate economics models become somewhat more accurate, and can explain approximately 78% of the differences between various national economies, when two additional factors of production are analyzed alongside physical capital: R&D expenses plus the amount of college education.

a. Clearly the data, and multi-variate analysis economics models, are showing that modern world is best described as a "physical capitalistic" world.

a.1. Mankiw's paper titled Growth of Nations (1995) postulated that physical capital might be about half of the effective capital which is available to modern nations. See frames 16-18 in the following link for Mankiw's explanation: http://www.economics.harvard.edu/faculty/mankiw/files/Growth_of_Nations.pdf
And subsequent research by other authors seems to bear this out, in part. For example, subsequent economics research has demonstrated that that the percentage of a nation's residents who have college education is only about 1/10 as important to a nation's income and growth as the amount of that nation's physical capital; and R&D spending is also about 1/10 as important. Consequently nothing else even comes close to the potency of "physical working Capital", which has been confirmed to represent about 64% of the overall effective capital which is being used in modern nations.

a.2. There are still some gray-areas, not fully understood, which contribute to the income and growth of national economics. For example, it seems rational that possessing valuable raw materials is a benefit to many nations (but this has not yet been quantified by research economists). Perhaps future economics research will eventually be able to explain more than the currently-demonstrated 78% portion of economic activity. (i.e. Physical Capital explains 64%, product R&D spending explains 7%, and the percentage of college graduates in a society explains 7%). But most likely, when future categories are identified by economics research, any one additional category will explain only small a additional percentage of GNP. Therefore the amount of "physical capital" should still be understood as the primary element in the well-being of modern nations.

b. Keller and Poutvaara (in 2003) concluded:
"for the wider country groups of non-oil-producing and intermediate countries..... investment in physical capital has a higher coefficient when investment in R&D is included.

In all country groups analyzed by Mankiw et al. (1992) and Nonnemann and Vanhoudt (1996), the omission of R&D considerably increases the [naively calculated] coefficient on investment in human capital, which is evidently capturing also part of the explanatory power of the omitted variable of R&D investment."

the above comment is quoted from paragraph 4.3 (page 19) in http://www.cebr.dk/upload/cebr_dp_2003_13_final.pdf

b.1. This 2003 refinement to economics knowledge (i.e. the Keller and Poutvaara report) supersedes what was understood in 1992, when then-President Bill Clinton erroneously made spending on "generic human capital" the centerpiece of his 8-year presidential administration.

b.2 The modern economics analysis has demonstrated that "Engineering R&D" is the main form of "human capital" which benefits a society.

b.3 Consequently the current state of the art for Economics suggests that a society is misguided if a large fraction of its population graduates from "non-Engineering" colleges.

5. US society, in recent years, apparently earns a combined total between 43% and 53% annual return on the overall amount of "physical Capital" which is utilized by employees of the non-financial US corporations. Most of this income goes to US employees. About one-tenth of that income-from-capital goes to people who create raw materials; one-fifth goes to employees of the corportations that make finished products; and 2/5 of the income from capital goes to the people who have "unproductive" jobs in the US, such as the military, the legal system, and government taxes. Another one-fifth of income from physical capital is consumed in business expenses such as: depreciation of corporate assets, and paying interest on corporate debt. The remaining one-tenth of income from physical capital is used as retained corporate earnings to finance future growth. (Only about 2% or 3% of US corporate income is currently paid out in dividends to the comon-stock investors. reference: http://www.barra.com/Research/Fundamentals.aspx , although some additional part of corporate revenues is paid to the owners of corporate debt.)

The "Personal-Incomes/Physical-Capital" ratio is not cast in concrete; but it is what it is.

a. Macroeconomics proposes a greatly-simplified formula to explain the output of goods in a society: Y = A * K. For the US economy in recent years, the lumped-parameter A has a value close to 50%. (K is the amount of physical working capital in the US, and Y is the overall output of goods and services in the US during a one-year period.)

The following table summarizes how Capitalism is working in the US.


Nonfarm, nonfinancial, Corporate Assets
($ billion of debt plus net worth)
high estimate........................................19473...20064...21662...23731...25418...26866
low estimate.........................................16952...17293...18404...19785...20687...21490

Personal Income ($ billion)....................8882....9164....9731....10239....10883.......?

A (=Annual Personal....low estimate......46%.....46%......45%.......43%........43%
Income for US as %......high estimate.....52%.....53%......53%.......52%........53%
of corporate capital)

(tabulated from offical government and Federal Reserve Bank data at http://www.census.gov/compendia/statab/tables/08s0651.xls
and also
http://federalreserve.gov/Releases/z1/CURRENT/z1r-5.pdf )

b. A 43% annual return to society (from physical working Capital) is so high that no other option makes sense from an economic standpoint. Each dollar of physical working capital added to the treasuries of "Productive" US domestic corporations (i.e. only those corporations which are in Adam Smith's "Productive" category of society) is expected to increase US Personal Income by approximately $0.43 annually, as far into the future as it is possible to predict.

c. And converse is also valid --- each dollar of physical working capital removed from those US corporations which are in Adam Smith's "Productive" category is expected to LOWER US Personal Income by approximately $0.43 annually, as far into the future as it is possible to predict.

6. Steps which can revive "Productive" jobs in the US, both today and in the future.

a. For people living in cities, Manufacturing is the purest example of Productive jobs. Therefore a benevolent Federal government should give its highest priority to an immediate expansion of "manufacturing jobs" in the US, until the US Trade Deficit (or Current Accounts Deficit) is reduced to zero.

b. A free Healthcare program should be started for 10% to 15% of US workers (but only, and this needs to be emphasized -- ONLY, for US citizens who are working in manufacturing jobs. Free healthcare should not be extended to 100% of all US citizens at any time when the US has a Trade Deficit. Nearly all of the nations which can afford to provide free healthcare for their citizens are runing TRADE SURPLUSSES, and they finance their government programs through a Value Added Tax (instead of an Income Tax). We need to stimulate the formation of only "Productive" jobs in the US, until the US balance of trade gets back into equilibrium with the other prosperous nations of the world.

c. US export industries should be jump-started. Grant $300 billion of debt forgiveness (and/or subsidized interest rates on existing debt) to US exporting businesses. Based on the macroeconomics formula Y = A*K, this $300 billion of extra physical capital could translate into approximately $120 Billion per year of additional GNP for the US, mostly in exports which would reduce the US Trade Deficit (and strenghten the US dollar).

d. Impose a flexible US import tax on all products manufactured in China. The US imported $321 billion of manufactured products from China during 2007.
If a temporary 30% import tax is applied to imports from China, the import tax might generate approximately $80 billion per year of new revenue for the US federal government. Revenue from such a tax could help to pay for some of the increased physical working capital which the US needs. A 15% decline in imports from China might be anticipated if a 30% import tax is applied. (i.e. $321 Billion/year * 0.85 * 30% tax rate = $82 Billion/year for new tax revenues)

e. Revive the Capital Investment Tax Credit (ITC). Democrat president Kennedy initiated it at 7% rate in 1963. And Republican president Ford increased it to 10% rate in 1975. But the Capital ITC was eliminated in 1986, and the US Savings and Investing rates started collapsing immediately after 1986. Today the US needs a Capital Investment Tax Credit at a rate MORE THAN 10% because international trade competition is much more advanced today than it was in 1975.

f. Since 1986, an estimated $1 Trillion of physical working capital has been drained out of the US economy due to eliminating the previous 10% Capital ITC. Moreover, if the Capital ITC had been set at 20% since 1986 (to offset intensified international competition in recent decades) then physical working capital in the US today could have been boosted by approximately $2 trillion above today's actual amount of physical working capital.

g. Intentionally increase US physical working capital by an amount equal to (or greater than) the $2 Trillion Social Security trust fund. Currently the SS trust fund is backed by empty IOUs. Based on the (oversimplified) macroeconomics formula Y = A * K, adding $2 trillion of additional corporate working capital to the present $26 trillion of US physical corporate working capital could permanently increase US GNP by approximately 7%. This boost to GNP would help support the Social Security program.

h. Intentionally increase US physical working capital by an additional $2 trillion to offset the so-called "trustfunds" which currently back our government employees retirement pensions. Currently those trustfunds are merely backed by empty IOUs. Increasing the GNP by an additional 7% in this way would help to support those government pension programs.

i. It is worth noting that the sum of the "lost" capital for merely the three items f, g, and h (immediately above) totals $6 trillion of physical working capital, which has been crowded out of the US economy by short-sighted macro-economic policies.

7. Overall US Healthcare costs should be reduced to 11% of GNP (from the current 16% of GNP).

a. Other nations spend 8% to 11% of their own GNP on Healthcare.

b. Adam Smith's economics rates Healthcare as "Unproductive Labor". Therefore lifestyles of most US citizens can improve if Healthcare costs are reduced.

c. Medicare currently spends 3% of GNP to supplement retirees healthcare (as demonstrated in the following chart from the 2008 Medicare Trustees report:
http://www.ssa.gov/OACT/TRSUM/images/ChartB.jpg ). As explained below, perhaps Medicare costs can be cut by 1.5% of GNP, by reducing the over-medication of retired people who are being treated for multiple chronic diseases. But after that change to Medicare, the remaining target for cost adjustment within US healthcare would be to reduce non-Medicare costs by 3.5% of GNP (i.e. 27% reduction of all current US healthcare costs which are not funded by Medicare). By combining these two cost savings, the US would bring its overall healthcare costs into harmony with the other developed nations. Healthcare would then cost 11% of GNP in the US).

d. Healthcare in Denmark and Finland is rated as the most cost-effective healthcare in Europe. (For a graph of cost-effectiveness, see frame 16 in this link: http://www.socialstyrelsen.se/NR/rdonlyres/4EBF49E8-7DE7-4448-A82A-7208F486F355/0/NordicCasemixconferencestockholmMay2008.pdf . ) And those two countries credit this to making each local-government unit administer its own healthcare program (instead of having a monolithic nationwide program). Cities and counties tax themselves to pay for their own healthcare programs in Denmark and Finland. Healthcare in Denmark and Finland is explained at http://www.civitas.org.uk/pdf/Denmark.pdf
The US could adopt this "local-healthcare financing" concept easily. "States rights" has been important in US history, so the concept can be broadened to "Cities Rights". Initially, the 5 largest cities in the US should be granted "Cities Rights" to tax themselves and design their own healthcare programs. After independent pilot healthcare programs are functioning in those 5 largest US cities, the next 10 largest cities should be allowed to tax themselves and design their own healthcare.

e. France's healthcare system should be held up as a model for fixing our US healthcare system. France's healthcare system has been rated as one of the best in the world. In France, the Medical schools are financed 100% from public funds. Therefore medical schooling is free for French doctors. And then French doctors are paid only 2 times the median income for their society. (By contrast US doctors expect to be paid 5 to 15 times as much money as the median US income.) Unlike Canada and Britain, France has no waiting lists for patients to receive elective procedures. Unlike the US situation, French doctors do not face complex billing problems with the insurance companies. And malpractice lawsuits are rare in France, which saves a lot of money for society as a whole. French private health insurance is available, above and beyond the public healthcare coverage, in a wide variety of programs. And 90% of French citizens purchase at least some supplemental private insurance, based on their personal preferences. French healthcare is explained in the following two links: http://www.americanhealthcarereform.org/france_s_model_healthcare.html
and also

8. The US needs to scale down its expensive Medicare-Medicaid and Social Security programs, which aim to benefit only retired people (i.e. retirees are in Adam Smith's Unproductive Sector of society) who will never be Productive in the remainder of their lives. Retirees are being substantially over-medicated, as demonstrated by both costs and results.

quote from: http://www.ssa.gov/OACT/TRSUM/index.html
of Social Security and Medicare Boards of Trustees

...The Medicare Report shows that the program could be brought into actuarial balance over the next 75 years by ...an immediate 51 percent reduction in program outlays.....As with Social Security, adjustments of greater magnitude would be necessary if changes are delayed or phased in gradually. Larger changes would also be required to make the program solvent on a sustainable basis beyond the 75-year horizon.

...The projected actuarial deficit in the [Social Security] OASDI Trust Fund over the infinite future is 3.2 percent of taxable payroll (1.1 percent of GDP), or $13.6 trillion in present value terms. The system could be brought into actuarial balance over this time horizon with ....an immediate reduction in benefits of 20 percent.

8.a. SOCIAL SECURITY revisions
1. Social Security could be completely fixed by eliminating its Cost Of Living Adjustments (COLA) until a cumulative 20% reduction has been shaved off all US Social Security payouts.

2. Two other alternatives are available for reducing the cashflow problem for Social Security.

2.a. The Obama/Liebman plan for "fixing" part of Social Security involves increasing the taxes paid by high-income earners to 12.3% of income, and simultaneously eliminating the ceiling on income which is subject to the SS tax. This would fix one-fifth of the shortfall at the end of the planning period (i.e. for 2080). http://www.aei.org/docLib/20080326_0922902OTIBiggs_g.pdf
and http://www.aei.org/publications/pubID.27704/pub_detail.asp

2.b. "Growth economics" can offer a viable solution, with a goal of increasing the productivity output of US workers by 20% (instead of cutting SS payouts by 20%). The "growth economics solution" involves rapidly increasing the overall amount of "physical working capital" for the US as a whole by 20% to 60%. This calls for an increase of "physical working capital" by roughly $5 trillion (when using the simple AK models) to $15 trillion (when using the more sophicicated logarithmic macroeconomic models). Then the US Social Security program would become statistically solvent, without reducing Social security payouts, and without raising tax rates.

2.b.1. The US Federal government currently has $1 trillion of "Discretionary Spending" per year. (Beyond that amount, the Federal budget also contains spending for "interest on the national debt", and spending for "entitlement" programs.) About half of the "discretionary" spending pays for National Defense, and for the new Homeland Security programs. That leaves roughly $0.5 trillion annually which is spent by the US Federal government on Domestic Discretionary activities. http://www.heritage.org/Research/Taxes/upload/FederalSpendingByTheNumbers2008.pdf

2.b.2. Therefore, if 100% of this annual $0.5 trillion for Federal Domestic Discretionary Spending is redeployed to subsidize "physical capital" formation in the US for roughly the next 30 years, (and if overall US Personal Income consequently rises by 20% on an inflation-adjusted basis) then the US Social Security program would presumably become actuarially stable and financially healthy --- without reducing the US Social Security payouts to individuals.

2.b.3. But if the US federal government dedicates a single 4-year presidential period primarily to "stabilizing the US Social Security program" -- then a combination of increased "physical working Capital" investment plus small COLA payout reductions could be selected. A total of $2.0 trillion of Domestic Discretionary spending (at a rate of $0.5 trillion annually) could be injected into US physical working Capital. This capital infusion would match the $2.0 trillion of baby-boomer SS trust-fund money which has been wastefully pre-spent by the Federal government. COLA adjustments could be shaved by 4/10 of the amount which the SS trustees report says would be needed to stabilize Social Security without revamping the US economic engine. This could be accomplished by shaving 2% annually (for 4 years) from the COLA increases which are scheduled for recipients of the Social Security program. Meanwhile, increasing the "physical working Capital" which supports "productive" workers in the US by a total of "$2.0 Trillion during 4 years" would be expected to increase US GNP by roughly 4% to 8% during those 4 years, relative to current expectations for the US economy.

1. There is a simple fix for Medicare. Healthcare funding, at the public's expense, should be withheld from US people who have a high number of chronic illnesses. That is the way other nations handle their public healthcare expenses. A research report indicates that this could save close to 68% of current Medicare expenses. Private insurance, if arranged in advance by the individuals themselves, should be used to finance healthcare of people with the "magic number" of chronic illnesses. (Perhaps 4 or 5 simultaneous chronic illnesses should be the threshold. And perhaps no more than 2 chronic conditions should be medicated simultaneously in any one elderly person.)

1.a.. Quote from: http://www.hillaryclinton.com/feature/healthcare/

In fact, the 23 percent of Medicare beneficiaries who suffer from five or more chronic illnesses account for 68 percent of total spending in the Medicare program [footnote vii].

footnote vii. Anderson, G. "Medicare and Chronic Conditions." New England Journal of Medicine, 2005.


1.b. Medicare and Medicaid is a national catastrophe in the US: The trustees of Medicare and Medicaid reported in March 2008 that, for the long-term future, if the current versions of these two programs remain unchanged they will need an additional $85 Trillion of funds (measured in the purchasing power of 2008 dollars) beyond the currently authorized sources of funds. http://www.aei.org/publications/filter.,pubID.27825/pub_detail.asp

1.c. During 2008, the total value of all household assets plus all corporate assets in the US is approximately equal to this $85 Trillion which the trustees say would be gobbled up by the current format of Medicare and Medicaid after the Baby Boomers retire. The trustees also say that, to avoid raising Medicare tax rates above present levels on working people, this $85 Trillion would need be deposited in a bank account today (see footnote 3 in the above link which analyzes the 2008 Trustees report on Medicare).

2. A group of six doctors, plus some focus groups, reported during 2008 that the currently existing medical procedures do not work well for elderly persons with Multiple Chronic Conditions (MCCs), especially if "pay for performance" is being considered.

quote from: http://www.blackwell-synergy.com/action/showFullText?submitFullText=Full+Text+HTML&doi=10.1111%2Fj.1532-5415.2007.01530.x

...there is concern that disease-specific or condition-specific management approaches and guidelines may not be appropriate for older persons with MCCs.....characteristics of [FDA] pre-approval testing that contribute to knowledge gaps include the modest number of older persons included in clinical trials, the atypical nature of the older adult in clinical trials who may have only one chronic condition and use no or few medications...

Generic [treatment] guidelines based on evidence from middle-aged or highly selected populations with a single disease usually drive prevention in older persons with MCCs, but the increasing prominence of quality assurance initiatives and their link to pay-for-performance have brought about critical scrutiny of the application of these guidelines to older adults with MCCs. Strict adherence to these guidelines can potentially produce more harm than benefit in the older adult with MCCs.

...People with chronic conditions make up 81% of total inpatient [hospital] stays. Inpatient use increases with the number of chronic conditions; annual hospitalization rates are 17% for three conditions and 31% for five or more.

Susan L. Norris et al. (2008) Health Care for Older Americans with Multiple Chronic Conditions: A Research Agenda Journal of the American Geriatrics Society 56 (1) , 149–159


9. The overall "debt-to-income" ratio within the US economy has risen to an unhealthy level. Debt-to-income ratio for the US as a whole was 2 times as high in 2007, in comparison to the debt-to-income ratio for 1979 when the Fed Banking system began using high interest rates to make banking more profitable. This perpetual growth of the US "debt-to income" ratio is a bubble which is unsustainable. http://mwhodges.home.att.net/nat-debt/debt-nat.htm
BIG PICTURE - $53 TRILLION of TOTAL DEBT in America, and rising rapidly

a. A chart in the above link (to the mwhodges website) shows that from 1963 to 1986, the US overall debt-to-income ratio was increasing only half as fast (increasing roughly 1.2% compounded annually) when compared to the rate of increase for this ratio during 1986-2007. The Kennedy-Ford Capital Investment Tax Credit was helping to control the US debt-to-income ratio during 1963-1986. Evidently the US economy might have displayed a stable US debt-to-income ratio if a 20% Capital ITC had been in place during 1979-2007, after the Fed banks switched to higher interest rates.

b. To stablize the US debt-to-income ratio during 1979-2007, the US National Income (i.e. through labor productivity and capital formation) should have grown faster by 1.2% compounded annually, and consequently total debt in the US could have grown slower by 1.2% compounded annually during that period.

c. According to Adam Smith's economics, banking activity (and the creation of debt, in general) is "Unproductive" activity. Consequently, a benevolent government should aim to minimize the relative magnitude of debt (and to minimize the burden of banking activity) in a national economy. Obviously, some banking activity is desirable. But a lower ratio for debt-to-income is better than a higher ratio.

d. The Fed banking system has published (in 1994) its own analysis of what is needed to increase growth in the US economy. The Fed reported:
"The average relationship is summarized on the chart by a regression of growth on investment
.....According to the regression, an increase of ten percentage points in the investment share of GDP is associated with an increase of 1.3 percentage points per year in the long-run growth rate of per capita real GDP."
quoted from: http://findarticles.com/p/articles/mi_qa3699/is_199401/ai_n8731906

d.1. If this banking advice had been followed by the Federal government, it would have called for revising the government's income tax code, to subsidize saving (and investing) by a substantial fraction of GDP, if the goal is to have a progressively rising standard of living in the US.

e. A shortage of US capital formation has been caused by taxing US income so highly that adequate amounts of new physical working capital were NOT created in the US during 1979-2007. (Most other countries tax consumption, not income. The prevailing international tool for financing central government activity in 150 nations is called Value Added Tax (VAT); and that strategy helps to create adequate amounts of physical working capital in other countries during peacetime).

10. The US is importing 13 million barrels of crude oil per day in 2008 ( = 4.7 billion imported barrels per year). http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm
Importing 13 million barrels of oil per day adds $600 billion per year to the US Trade Deficit if the price of oil is $125 per barrel (or adds $400 billion per year to the US trade deficit if the price of oil is $85 per barrel). The imports of Crude Oil need to be reduced, so we can slow down the creation of debt in the US economy. And the value of the US dollar will increase if we reduce oil imports.

a. One way to reduce oil imports is to have US citizens voluntarily drive fewer miles every year.

b. Most other countries reduce oil imports by placing a high tax on gasoline sales.

c. Based on the (oversimplified) macroeconomics formula Y = A*K, the US macroeconomy might generate an additional $600 billion per year of GNP output (to nullify $600 billion of annual oil imports) if we shift $1,200 Billion out of US consumption, on a one time basis, and create $1,200 Billion of new "physical working Capital". (Alternately US GNP might increase by approximately $250 Billion per year, if US GNP rises in proportion to the logarithm of "physical working Capital", as predicted by the more sophisticated Economics models.)

c.1. It makes sense to envision this $1,200 Billion Capital injection as an initial target for US investment in alternative sources of energy. But the energy-liberation investments should try to accomplish Constant Returns to Scale (CRC). This indicates that big investments for energy-liberation should take place only in activities which are cost-effective today, compared to the costs for our existing energy sources.

c.2. Nuclear-power and wind-power technologies currently are available at costs no higher than the average US cost for electrical energy.

c.3. The Freedom Car and Fuel Partnership (FCFP) is in the R&D phase, to develop cars which can run on hydrogen, by the year 2015, at costs equivalent to $3.00 per gallon of gasoline.

c.4. The Solar America Initiative (SAI) is in the R&D phase with a target of generating electricity from the sun, by the year 2015, at a cost equivalent to coal-fueled power plants.

11. Hybrid cars could reduce US gasoline consumption by 10% during a 10 year period, if $60 Billion of rebates are handled wisely.

a. Total new vehicle sales in the US are 16 million vehicles per year. And currently only 1% of US new vehicle sales are hybrid cars.

b. Let's assume cars like the Toyata Prius and Honda Insight hybrids get about 46 mpg. Whereas the average US vehicle gets about 23 mpg. The basic point here is to single out cars which can get fuel economy which is twice as good as the average car on US roads today.

c. If 20% of all new US vehicle sales switch from "average 23 mpg" vehicles to 46 mpg cars (comparable to the current and future Prius and Insight hybrids), then 10% less gasoline will be consumed among each new-model-year of cars. And after a 10 year period of this 46 mpg behavior, overall US consumption of gasoline would drop about 10%. Due to the way this "double-the-mpg" program is structured, the reduced US fuel consumption would take place independent of the price of fuel.

d. An organization already exists which advocates 40+ mpg cars. http://www.40mpg.org/getinf/issues.cfm

e. The Federal government should pay a $2000 rebate (per car) to all buyers of new cars which are rated for 45 mpg or higher by the EPA. Federal Tax credits for the Prius have expired (because it has been a popular vehicle) at the present time; and the lack of a rebate is now hindering sales of Prius hybrid cars.

f. Rebates for 3 million high mpg cars per year, at a rebate level of $2000 per car, would cost the US treasury $6 billion per year. Consequently these $60 billion of "high mpg car rebates" could cut US gasoline consumption by 10% during a 10 year period.

g. Democratic 2008 presidential nominee Obama proposes to give tax rebates for 1 million "plug-in hybrid" cars, at a level of $7000 tax credit per "plug-in hybrid". It is worth noting that the New Square Deal is aiming to stimulate 30 times as many mpg cars as the Obama plan. The New Square Deal focuses on achieving an actually realizable 10% reduction in US gasoline consumption, while the Obama plan would have a much smaller impact on fuel consumption.

12. Creating relacements for crude oil usage is a task which is separate from finding alternate sources for generating electricity. 70% of all crude oil consumed in the US is used for transportation fuels. Therefore a substantial percentage of transportation fuel must shift to biofuels while the world's supply of crude oil is peaking out. http://www.eia.doe.gov/basics/quickoil.html

12.a. The EU (European Union) countries initially passed aggressive mandates to adopt biofuels, thus helping to reduce greenhouse gas emissions. The EU mandate is to use biofuels for 10% of transportation fuel by the year 2020. But in 2008, the EU is actually producing only 2% of its transportation fuels from biofuels. http://www.biofuelsdigest.com/blog2/2008/07/09/uks-gallagher-report-calls-for-lowered-biofuel-targets-euro-parliament-votes-to-drop-2015-target-to-4-percent/

12.a.1. In September 2008, the EU voted to realign its mandate at only 5% of all fuels coming from biofuels by the year 2015, with 1/5 of that coming from non-food crops. Additionally the target of 10% biofuels was reaffirmed by the year 2020, but with a new provision that at least 2/5 of that amount will come from non-food crops.



12.a.2. India is producing 3% of its transportation fuels from biofuels in the year 2008, although India originally set a goal of 5% biofuel for this year.

12.a.3. China expanded its biofuels program in 2007, and now plans to diversify by using 4 additional biofuel crops (other than corn or soybeans) to generate 25% of China's total energy consumption by the year 2020. After the year 2010, most of China's biofuels will come from sugarcane, sweet sorghum, cassava and rape. http://biopact.com/2007/07/china-announces-agricultural-biofuel.html

12.a.4. The USA is currently producing 6% or 7% of its transportation fuels from biofuels in 2008. When viewed in a global perspective, the USA is already using biofuels for a higher percentage of transportation fuels than most other countries. Only Brazil, a country where sugarcane can be be produced on a massive scale, is currently getting a significantly higher percentage of its transportation fuels from biofuels than the USA.

12.b. Corn-based biofuel is under attack in many countries, including the UN, because corn is a staple food. Diverting food crops to produce biofuels is linked to rising prices for food on a worldwide basis.

12.b.1. The land needs of the corn and soybeans biofuels industry are gargantuan. In the U.S., nearly one-third of corn production is currently targeted to make ethanol by 2010, replacing only 8 percent of US gasoline use, according to the U.S. Department of Agriculture.

The Separtment of Agriculture also projects that nearly a quarter of the nation's soybean crop will go to biodiesel, producing less than 2 percent of highway diesel consumed in the U.S.

12.b.2 Moreover, corn-based ethanol barely creates any additional fuel energy, beyond what is expended to grow, harvest, and process the corn into ethanol.

12.c. Corn and soybeans can be replaced by better feedstocks for biofuels. Biofuel progress is taking place among crops of at least seven bio-technologies (algae, sweet sorghum, switchgrass, miscanthus, sugarcane, canola/camolina, and thermochemical-biomass) for producing ethanol, and/or biobutanol, and/or biodiesel fuel. Each of these 7 bio-technolgies can be targeted to reduce US transportation fuel consumption by 3%, by the year 2015. This can total about 21% reduction for US transportation fuels consumption by the year 2015. A program of this magnitude can create 10% to 15% reduction in US crude oil consumption by the year 2015. And Hydrogen fuel can be targeted to reduce gasoline consumption by an additional 10%, but not before 2015-2022. The combined targets for these 8 transportation-fuel technologies would consequently reduce US petroleum-based fuel consumption by a targeted 31% by 2022 (i.e. greater in magnitude than switching one-third of all US vehicles to E85 fuel). Boosting the combined eight transportation technologies, in these magnitudes, would reduce total US crude oil consumption by more than 20% by the year 2022. And it would hit the 2007 Energy act's target of 36 billion gallons of bio-fuels to be consumed annually in the USA by the year 2022.

c.1. It is wise to make bio-ethanol, bio-butanol, and bio-diesel fuel from a diverse variety crops which have a high a Energy Balance Ratio (EBR). The Energy Balance Ratio compares the amount of fuel energy in the output product to the energy expended to grow, harvest, and process that biofuel.

crop name......EBR for producing biofuels

sugarcane ......800%
sweet sorghum ..800%
miscanthus ....500%
switchgrass ...410%
soybeans ......350%
canola ......... 330%
sugar beets ...250%
corn .............125%

Also it is wise to produce biofuels which provide a large amount of fuel per acre:

Fuel Crop..........Fuel Yield (annual gallons per acre)

(for creating ethanol and biobutanol fuels)

Algae (US)..............1500-2500 (butR&D aims at 2,500-10,000)
Sugar beet (France)......714
Miscanthus (U.K).........700
Tallow (China) ..........700
Sugarcane (Brazil) .......662
Sweet sorgham (India)..500-2000
Switchgrass (US)...........500
Cassava (Nigeria) ........410
Sweet Sorghum (India)374
Corn (U.S.) ................. 354
Wheat (France) ......... 277

for creating biodiesel fuel

Algae ....................1500-2500 (but R&D aims at 2,500-10,000)
Oil palm ...................508
Coconut ...................230
Rapeseed (Europe) ...102
Peanut .......................90
Camolina ................... 84 http://domesticfuel.com/2008/08/04/camelinas-role-as-biodiesel-feedstock-expands/
Sunflower ..................82
Soybean (US).............75

12.c.2. A USDA study, released in January 2008, shows that using switchgrass to produce either ethanol or biodiesel fuel could replace up to 15% of the current US crude oil consumption. (And this same study indicates that other forms of biomass-ethanol could replace an additional 15% of crude oil consumption.) Converting biomass to ethanol removes carbon from the atmosphere. Switchgrass-based biodiesel would reduce overall greenhouse gas emissions by 94%, when compared to the fossil fuel which it replaces. These are the conclusions of a 5 year study by the USDA, covering marginal croplands stretching from Nebraska to North Dakota. Switchgrass-based ethanol has been estimated to create 5.4 times as much energy as what was consumed to grow, harvest, and process it into ethanol. (By contrast, corn-based ethanol is estimated to produce only 1.25 times as much energy as was exspended to grow, harvest and process it. And soybean-based ethanol is now rated to produce 3.2 to 3.5 times as much energy as was expended to grow, harvest, and process it.)
and also
http://ianrnews.unl.edu/static/0801070.shtml )

According to this January 2008 USDA report, an estimated 28 million acres (+/- 75%) of marginal cropland (from Nebraska to North Dakota) could be converted into switchgrass-biodiesel production to replace up to 15% of US oil usage. http://www.pnas.org/content/105/2/464.full.pdf+html

Consequently it is conservative for the New Square Deal to target replacing 3% of US transportation fuel by producing switchgrass-biodiesel and switchgrass-bioethanol in the North Central part of the US. A change of this magnitude would reduce overall US consumption of crude oil by 1% to 2%.

12.c.3 Sweet sorghum is an excellent crop for use in biofuels. Sweet sorgham is being improved by selective breeding, but it already yields 800% as much energy in ethanol as is required to grow, harvest, and process the sweet sorghum.

c.3.a. China has implemented a major program to replace corn-ethanol and substitute sweet-sorghum ethanol. 3.8 million metric tons of sweet-sorghum ethanol will be produced annually in the near future (= 1265 million gallons per year). And China has committed to getting 25% of its total energy needs from biofuels by the year 2020. http://biopact.com/2007/07/china-announces-agricultural-biofuel.html

c.3b. Consequently it is conservative for the New Square Deal to target using sweet sorghum to replace 3% of US transportation fuels. That would reduce overall US crude oil consumption by about 2%. And to match China as a trading partner, the US should also try to match China's 25% of total energy coming from various biofuels by 2020 or 2022.

c.4. Sugarcane-based-ethanol is now being introduced into the Southeastern part of the US, after being pioneered in Brazil. Sugarcane-ethanol the most energy efficient biofuel, and produces 8 times more energy than is consumed in its production. Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual rainfall. Sugarcane is one of the most efficient photosynthesizers in the plant kingdom, able to convert up to 2% of incident solar energy into biomass. Sugarcane production in the United States occurs in Florida, Louisiana, Hawaii, and Texas. The first three plants to produce sugar cane-based ethanol are expected to go online in Louisiana by mid 2009. Sugar mill plants in Lacassine, St. James and Bunkie were converted to sugar cane-based ethanol production using Colombian technology in order to make possible a profitable ethanol production. These three plants will produce 100 million gallons of ethanol within five years.[38] For more info, see: http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil

U.S. corn-derived ethanol costs 30% more than sugarcane-ethanol because the corn starch must first be converted to sugar before being distilled into alcohol. Also corn-ethanol requires 2.5 times more cropland area than sugarcane-ethanol to produce equivalent amounts of ethanol.

Consequently the New Square Deal targets expanding the US sugarcane-ethanol industry in Southeastern US to eventually replace 3% of US transportation fuel. A change of this magnitude would reduce US crude oil consumption by 1% to 2%.

c.5. A tall grass crop named miscanthus should replace corn as a feedstock for bio-ethanol. The December 2007 US energy act set a goal of obtaining 20% of US transportation fuel from ethanol. If corn-based ethanol is used, that would involve diverting 30 million acres (= 25%) of US corn acreage to ethanol, rather than food. But a tall grass named miscanthus is a better choice than corn to grow in prime croplands for producing bio-ethanol. Miscanthus produces 2.5 times as much ethanol per acre, when compared to corn. Miscanthus is grown in the UK as a large scale source of bio-ethanol. Miscanthus should be grown in US states which are marginal for growing corn, but not in prime land for growing corn.

c.5.a. Here is a video showing that miscanthus is a wise crop choice to grow in the US. http://www.publicaffairs.illinois.edu/slideshows/Miscanthus_Yield/index.html

c.5.b. It is conservative for the New Square Deal to target using miscanthus-bioethanol to replace 3% of US transportation fuel (thus reducing overall crude oil consumption by 1% to 2%. The miscanthus would be grown initially in regions with a climate resembling the United Kingdom, where it has previously been commercialized. http://www.ipm.iastate.edu/ipm/icm/2007/4-2/acreage.html
and also

c.6. The canola/camolina crops are expected to become substantial feedstocks for biofuels.

c.6.a Consequently it is conservative for the New Square Deal to target obtaining 3% of US transportation fuels from the combination of canola and camolina crops.

c.7. The pulp and paper industry can economically integrate a thermo-chemical ethanol biorefinery into each future pulp and paper mill. It has been estimated that half of the December 2007 energy bill's celulosic ethanol mandate can be generated by redesigned pulp and paper mills. But this redesign will require extra capital formation, beyond the normal reinvestment of profits from the pulp and paper industry. http://www.tri-inc.net/common/TRI%20Technology%20for%20Integrated%20Forest%20Biorefineries.pdf

c.7.a. Therefore it is conservative for the New Square Deal to target using thermochemical biofuels to replace 3% of US tranportation fuel usage (thus reducing overall US crude oil consumption by 1% to 2%).

c.7.b. In July 2008 it was reported that the NREL has established a cooperative venture with Dow Chemical to improve thermochemical ethanol production, by using a methyl catalyst. Ethanol yields are expected to increase by 60% to 100%. This catalyst was originally created by Dow chemical in the 1980's. http://www.truthabouttrade.org/content/view/12151/54/

12.d. Farming algae, and then converting it to biodiesel fuel has huge potential. Algae needs about 1% as much land area as Soybeans, to provide the same amount of biodiesel fuel. The Aquatic Species Program study (during 1978-1996) by the National Renewable Energy Lab (NREL) can easily be renewed to supply a large percentages of US transportation fuels. A very preliminary estimate is that Capital investment of $308 billion for growing algae might provide enough algae feedstock to replace 100% of the fossil fuel used for transportation in the US (corresponding to a 70% reduction in crude oil usage). Here is a report from the University of New Hampshire, Biodiesel Group. http://www.unh.edu/p2/biodiesel/article_alge.html

A video summarizing many facts about algae based biofuels is located at:

A so-called "Vertigro" system for growing algae is claimed to produce up to 100,000 gallons of fuel per acre, on an annual basis. This would be extremely efficient space utilization, even for algae programs; so "100,000 gallons annually per acre" may be overly hyped. Here is a March 2008 CNN video about growing algae vertically:

d.1 An hypothesised cost of commercially manufacturing algae-biodiesel was once estimated, in the past, as $1.80 per kilogram. http://en.wikipedia.org/wiki/Algaculture#Biodiesel_production

And there are 140 kilograms per barrel of oil http://www.onlineconversion.com/forum/forum_1058197476.htm

d.2. Therefore the old estimate was that a market price of $252 per barrel of petroleum oil would have justified an attempt to build commercial-sized plants to produce algae-biofuel. But this is a "moving target".

d.3. If US Federal government research had continued to work on algae-biofuel since 1996, and decreased the cost of producing algae-biofuel by 6% compounded annually during the intervening 12 years --- then today in 2008 we might be ready to start building large-scale operations which could be cost-competitive with $120 per barrel prices for crude oil.

d.4. In the year 2008, it is generally accepted that current technology could (if cost is ignored) grow algae and convert it into biofuel at the rate of 1500-4000 gallons of biofuel annually per acre --- i.e. a land area equivalent to the size of the state of Louisiana could produce approximately 40% to 100% of the total transportation fuel currently used in the United States.

d.4.a. An ongoing DOE project at the University of Utah aims to make algae-based biofuel cost effective by the year 2009, while also doubling annual algae-ethanol yields to 10,000 gallons per acre by 2009. This program uses vertical orientations to grow algae, and hopes to demonstrate annual yields of 10,000 to 15,000 gallons per acre (which would be 200 times more fuel per acre than can be obtained by growing soybeans). http://biofuels.usu.edu/htm/initiative

d.4.b. Many organizations have a pretty good idea on how to grow algae. The biggest challenge is in the harvesting and how to extract it from the water.

d.5. Therefore it is conservative for the New Square Deal to target using algae-biofuel to replace 3% of the US transportation fuel usage (and consequently 1% to 2% of total US crude oil consumtion).

12.e. To migrate to a Hydrogen Economy, the current Federal government research budget is $400 million per year. This program (the Freedom Car and Fuel Partnership, or FCFP) aims to have hydrogen-fueled cars in mass production by the year 2015.

e.1. Previous FCFP research has centered on the use of platinum as an expensive catalyst in fuel cells. But the price of platinum doubled during 2005-2007. Cheaper catalyst material is needed for use in fuel cells. Another major problem in the Freedom Car research program is that the Onboard Hydrogen Storage subsytem is not making progress fast enough. (The onboard fuel storage problem is discussed on pages 63-67 in the following review of the Freedom Car research program. http://www.nap.edu/openbook.php?record_id=12113&page=63 )

e.2. In March 2008 the DOE took steps to solve the onboard Hydrogen storage problem, by creating a 6-year program and offering $35 million to $45 million of grant money, to a University which will be selected in the near future.

e.3 It appears practical, in the long run, to target using Hydrogen fuel to replace 25% of the current US transportation fuel consumption. But the current FCFP program aims to have less than 1% of US transportation fuel coming from hydrogen in the year 2015.

12.f. Eight billion gallons of corn bio-ethanol are being produced in the US during 2008. That is 6% or 7% of the 130 billion gallons of motor fuels consumed annually in the US. The 2007 federal Energy act called for raising bio-ethanol production to 36 billion gallons by the year 2022. The New Square Deal is providing a mechanical plan for ramping-up toward that Renewable Fuels Standard (RFS) for biofuels which was specified in the 2007 Energy act. If 21% of the current US transportation fuel consumption is replaced by a conservative combination of the 7 biofuel technologies, as discussed above in sections 12b-12d, that would be producing 27 billion gallons of bio-fuels annually by the year 2015. Hydrogen fuel also counts toward the RFS production quantities. Consequently, if an additional 10% of transportation fuels come from Hydrogen by the year 2022, that would total 31% of all US transportation fuels fuels. This combined percentage (31%, by the year 2022) represents 40 billion gallons of biofuels per year, which satisfies the RFS in the 2007 Energy Act.

12.f.1. Democratic 2008 presidential nominee Barrack Obama proposes to increase biofuel requirements to a rate of 60 billion gallons annually, from advanced biofuels like cellulosic ethanol, by the year 2030. http://www.barackobama.com/pdf/factsheet_energy_speech_080308.pdf
A weakness of the Obama biofuels plan is that it contains no list of achievable specifics for the "near future"; it just pretends that 60 billion gallons per year of fuel will appear by magic in the year 2030, if Obama tells the government to request that quantity of bio-fuel.

12.f.2. On February 28, 2007, the Department of Energy (DOE) announced that it will provide grants of up to $385 million for six commercial scale biorefinery projects over the next four years. These facilities are expected to produce more than 130 million gallons of cellulosic ethanol annually by the year 2012. That grant program was designed shortly before President Bush announced his much larger "20 in 10" program, to have the US produce 35 billion gallons of bio-ethanol annually, by the year 2015. http://www.doe.gov/print/4827.htm

However the DOE's quantity "$385 Million" of grants for cellulosic ethanol bio-refineries during 2007-2011 has been restated as "$385 Billion" of grants in the EPA rule-making explanation of the Dec 2007 Energy Act. This might be a typographical error. But "billions" of dollars is getting close to the magnitude of capital investments which seems credible when the national target has risen from an original 130 million gallons per year, and now is a tremendously higher target of 35 billion gallons per year. (see paragraph, in frame 26, of the following EPA document: http://www.epa.gov/otaq/renewablefuels/420r07006chp3.pdf )

13. The US should accelerate adoption of renewable sources of electrical energy.

a. In May 2008, a 248-page position paper by the Department of Energy (DOE) proposes that a 20 year wind energy program to invest $197 billion of new capital could generate 20% of the electrical energy needs of the US from windpower by the year 2030. The report says individual windfarm projects need to be 300 megawatts or larger, to keep costs low per kilowatt-hour of electrity. To get 20% of elecricity from windfarms, the DOE proposes it would involve creating 150,000 new full-time construction jobs in the windpower industry (for a 12 year period). http://solveclimate.com/blog/20080513/wind-would-power-20-america-cost-four-months-iraq This May 2008 position paper indicates (figure 1-6, page 29) that by the year 2030, up to 600 Gigawatts of electrical generating capacity in the US could be obtained from windpower, at costs in the range of 6 to 10 cents per kilowatt-hour (including the costs of connecting to the current power distribution system).

a.1. The DOE position paper proposes that it is highly practical to set a target of installing 295 Gigawatts of windpower electrical generating capacity in the US by the year 2030, utilizing 2% to 5% of overall US land area. Capital investment is modeled as $197 Billion, but offsets an estimated $150 Billion of petroleum consumption (see figure 1-15, on page 39). This cost estimate is probably too low; but it is a worthwile starting-point.

a.2. There are 46 states of the US which are envisioned to have substantial wind energy installations by the year 2030. This is depicted by a map, figure 1-7 on page 30 of the May 2008 report.

a.3. In Nov 2007 a research paper from Stanford University demonstrated that between 33% and 47% of the nameplate power capacity of windfarms can be used as baseload power by city utility companies. http://www.stanford.edu/group/efmh/winds/aj07_jamc.pdf
The remainder of the windfarm power is generated in gusts of wind wich are too brief to justify the cost of constructing a power transmission line from the windfarms to end-users. Consequently 53% to 67% of windfarm electrity should be used in the local areas where it is generated.

a.4. The May 2008 DOE position paper should be converted into a formal DOE windpower program, but with a goal of installing between 150 Gigawatts and 300 Gigawatts of windpower within a ten year period (instead of 22 years). This represents 10% to 20% of US electric generating capacity. It would require doubling the current employment in the windpower industry. During 2008 there are 76,000 US jobs in windpower, but 150,000 jobs (for a 10 year period) would be needed to reach the target of 10% to 20% of US electricity coming from windpower. Extending the Production Tax Credit for windpower would allow employment in windpower industry to grow from 76,000 jobs to 150,000 jobs.

a.5. Democratic presidential nominee Barrack Obama originally proposed switching 25% of electricity in the US to come from a combination of windpower plus solar and geothermal; and he wanted that amount of "renewable" electricity sources installed by the year 2025. http://www.barackobama.com/issues/energy/#invest-in-a-clean

a.6. States with the most aggressive "renewable energy" standards - California, Colorado, Delaware, New Mexico, Nevada and Utah - require 20 percent green energy portfolios by no later than 2025, with California reaching the 20 percent milestone by 2010. A total of 29 states have specified their own "renewable energy" standards, as of August 2008. http://www.palmbeachpost.com/search/content/state/epaper/2008/08/20/a1b_greenenergy_0821.html
(The Arizona stand calls for 15% "renewable energy" by 2025. http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=AZ03R&state=AZ&CurrentPageID=1&RE=1&EE=1 )

a.7. In July 2008, T. Boone Pickens began public campaigns for a 10 year program to rapidly expand windpower farms in the US. Building windfarm facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States (ca 300 gigawatts). The Pickens plan estimates a cost of $1.2 trillion to generate 22% of US electricity from windfarms.

a.8. Also in July 2008, Al Gore challenged both McCain and Obama to become far more aggressive about renewable electricity, and to go far beyond scope of the Pickens Plan. Gore retained the Pickens idea of a 10-year program duration; but Gore wanted to generate 100% of US electricity from renewables: wind, solar, and geothermal sources. A 10-year duration seems to be a wise choice for how long public interest can remain focused on any one specific goal. But Gore's suggestion to set the goal at 100% of all electricity is unrealisticly too high. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/18/MN2711QRVL.DTL

a.9 Al Gore's name is inevitably linked to reducing Green House Gas emissions. So at this point, it is fitting to provide a reference to the net effect (on total Green House Gas emissions) of switching to bio-ethanol fuel instead of continuing to use fossil fuel gasoline for transportation. The following research paper concludes in Table 1A (frame 21), that overall national GHG emissions would be reduced by 50% to 70% (per kilometer driven) by using biomass-ethanol for fuel. http://www.sciencemag.org/cgi/data/1151861/DC1/1

13.b. The largest operator of nuclear plants in the US announced during 2007 that it wants to build a new $4 billion nuclear plant which will generate 3 Gigawatts, enough electricity for 3 million homes. http://www.iht.com/articles/ap/2007/06/27/business/AS-FIN-COM-Toshiba-NRG-Energy.php
Approximately 30 other Generation III nuclear plants might be constructed in the US under the Nuclear Power 2010 program. http://en.wikipedia.org/wiki/Nuclear_Power_2010_Program
Moreover, the state of Texas is created a package of financial incentives to get more nuclear power plants built in Texas. http://sustainablog.org/2007/12/18/texas-going-nuclear-to-fight-climate-change/

13.c. The US should spend $0.4 billion to construct the University of Texas HT3R pilot project, which can have a small Generation IV Nuclear energy plant operational by 2012 for teaching and research purposes. The reactor is based on the already-existing engineering for a GT-MHR design. This Demonstration Plant is currently estimated to cost $0.4 billion and is planned to actually generate 300 MWe (Megawatts electric) plus have enough 1000 degrees C process heat to economically generate considerable amounts of hydrogen from water. http://www.utpb.edu/ht3r/whynow.htm and also http://www.utsystem.edu/news/2006/BOR-Materials-02-08-06/HTTTR-FactSheet-022106.pdf

13.d. Phases 2 and 3 of the Solar America Initiative (SAI) still need to be developed, to end up with 4 to 6 different US manufacturers of Photovoltaic products, each having their own plant with capacity to manufacture and sell approximately 1.0 Gigawatts of photovoltaic cells in the year 2015 (totaling 4 to 6 Gigawatts combined per year) at prices around $1.00 per watt. The SAI end goal for 2015 will place photovoltaic electricity costs in the rage of 5 to 10 cents per kilowatt-hour.

d.1. Phase 1 of the SAI has funded 13 manufacturing projects and 14 Universities ("Technology Pathway Partnerships") for the years 2007-2009, using $168 million of Federal government grants, plus generally matching funds from the manufacturing companies. http://www.doe.gov/media/SolarAmericaFactSheetFinal.pdf

d.2. Some of the Phase 1 technologies of the SAI are likely to turn into dead-ends which will be abandoned in phases 2 and 3 of the SAI.

d.3. A report in the December 2007 issue of Scientific American magazine (A Grand Solar Plan) called for nurturing a regionwide power grid for photovoltaic electricity (including energy storage to make solar electricity available 24 hours per day) by the year 2020, with production costs of 5 cents per kilowatt-hour in 2020. Then the power grid could expand nationwide by 2050, potentially generating up to 69% of all electricity, and 35% of the total energy, used in the US.
http://www.sciam.com/article.cfm?id=a-solar-grand-plan&page=4 . The magazine article led to a movement calling for Congress to create the coordinating body, tentatively called a National Solar Workshop, which resembles an extension of the currently existing Solar America Initiative for years 2007-2015.

13.e. The US should build a full-scale nuclear energy plant using the technology called "Integral Fast Reactor" (which can "eat" the radioactive waste from older nuclear energy plants). An Integral Fast Reactor would consume 99% of the energy in its Uranium fuel; whereas earlier reactors used only 1% of the energy, and therefore left 99% of their Uranium fuel as a radioactive waste product. http://www.nationalcenter.org/NPA378.html

14. Young US taxpayers have a moral right to a government retirement program in which the young generation of taxpayers, as a general class, will recover at least 100% of the inflation-adjusted money which they (plus their employers' matching contributions) pay into the Social Security program. http://treas.gov/press/releases/reports/treasssissuebriefno2.pdf

a. Most of this problem (making Social Security equitable for today's young citizens) can be solved by restoring normal amounts of nationwide Savings and Investment. Physical Capital investment in the US should be rapidly increased, by enough to multiply US payroll income by 1.33 (relative to 2008 dollars). But after the initial (rapid) increases for US physical capital, the Federal government should continue to grow the nation's physical capital supply adequately so that Social Security tax rates do not need to increase in the future.

b. New Growth Theory, in the field of Macroeconomics, has been advanced by the many economists, including: Rebello (1990), Romer (1986,1990), etc. These "New Classical Macroeconomic" models simplify to the formula Y = A*K, a format which has been referenced in various paragraphs above (if we accept the usual asssumption of "Constant Returns to Scale").

Saturday, May 10, 2008

The Ten Star Program - by Peter Simon Bollander

Candidate nickname: Simon
Campaign Slogan: Lets Do It!
"I'm old School",
with a New Age mind set.

Program Entitled: The Ten Star

Star 1: Strengthen the Dollar
A. Higher tariffs on imports.
B. Develop high cash reserves
(Look at Star 2)
C. Develop strong job market,
Create 4 percent or lower
unemployment(see Star 4)

Star 2: Social Security Bailout
A. Create "The Uncle Sam Inter-
national Lottery Sweepstakes."
B. Develop close to 2 trillion cash
reserve, over 2 decades.
C. The interest of this frozen fund
could fund fund StarTen.
D. In the year 2030, the principle
fund, would be unlocked to help
restore Social Security debts.
E. The Fund is considered frozen
by an act of congress. The in-
terest of 1 Trillion would fund
Star 10.

Star 3: Develop a Mideast Alliance
A. Create a United Faith Council of
Muslim, Christian, Jewish, Budd-
hist and Hindu. The goal would
be to influence the Arab nations.
Saudi Arabia would be the go to
B. The United States and allies are
active in development talks.
C. In effect, a United Arab military
force would control conflicts in
this region.
D. A Court of law with containment
system would take place.

Star 4: Massive Work Program
A. Create Work force of 100,000
or more.
B. Work force would build & repair
roadways, build desalination
Solar/ & Nuclear Plants.Man-
power for Star 6.
C. Federal/ Corporate and private
funding for such.

Star 5: Educational Rework
A. More media attention & programming
to award students for educational
achievements. Awards may be of any
value: Items, .cash, vacation trips,etc.
B. Create courses Grade 1 through 8,
that act as a guidance tool in finding
occupational choice. Awareness &
self assurance will only develop a
very strong sense of direction, for a
clear path for life choices.
C. Create better pay and incentives for
D. Create new courses that teach
positive motivational methods.
E. Strengthen English only programm-
ing through entire educational
industry and to set up clinics to
older members.

Star 6: Inner City Rehab
A. Restructure H.U.D. and other programs
& create greater cash flow into actual
building mode.
B. Better incentives for landlords of
rundown buildings.
C. Develop tax incentives for landlords
D. Expand Recreational areas.

Star 7: Our Space Program
A. Increase funding for improvements
in present programming.
B. Integrate Global warming and tech-
nology of space programming to
pinpoint solutions for program.
C. Promote more public awareness to
schools & general public, to get
involved in program.

Star 8: Alternative Energy
A. Develop immediately Solar Desal-
ination Plants.
B. Define by regions the immediate
needs of water & energy needs.
C. In doing so, create regions in which
solar or nuclear plants can be retro-
D. Develop strong partnerships with
Oil companies.
E. The transportation industry must be
pushed to immediate response of
producing battery,solar,& hydrogen
fueled vehicles.
F. Create retrofitted power packages
that would fit into older vehicles.
These power packs would be of
hydrogen, solar and battery . The
purpose thereof would save the car
body & save consumer the cost of
a new car.
G. Create saturation media coverage
on topic, so General public can
proceed the proper path.

Star 9: Internal/ external security
A. Increase the funding for C.I.A act-
ivities in conjunction with Homeland
B. Fund higher grade surveillance
equipment(See Star 7)

C. Create a guest worker system that
will allow 25,000 on up workers pr
day. Workers would have special I.d
cards with a computer chip, that will
spell out history of worker. Workers
would be subject to payroll taxes.
D. Increase fines to businesses that
employ workers who are not carded.
E. Increase the hiring of inspectors to
monitor system.

Star 10: Free Health Care
A. Set up 6 Regional health care
centers in retired military bases.
The care will be of basics, to keep
costs at a minimum. Doctors and
nurses would donate man hours for
tax credits. Medicines would be
generic in nature. Medical equip-
ment would come from corporate
donations & private sector grants.
B.The centers would be " A Quick
Response " team that will respond
to regional disasters or other.Food
rations, Cargo Helicopters, Tents,
rafts, medical equipment, and
all equipment related to disaster
response,would be stockpiled in
great amounts. Will work with
Homeland Security,Red Cross and
National Guard organizations.
C. The homeless of America will be
treated at centers for alcohol and
drug problems. The homeless we
cure will provide much needed
labor for centers.
D Funding for centers will come
from Star 2, and private contribut-

Alternative Star Programs
(Need Research)
Star A: Fish farming and crop farming
Our oceans are fished out of valuable
resources. We must form partnerships with the fishing industry. We need at least 10 to 20 Years for restocking Tuna,
Cod, Salmon,Halibut, and more. We need to create a special agency that would initiate schooling and guidance to future fish farm owners.
Crop farming by using high rise office buildings that would use hydroponics to grow crops, such as corn, potatoes etc.

Star B: Penal System
Obtain a land mass that will hold millions of prisoners. Land mass may be an
island with its own airport & industry.
System would be called Rehab Center.
Only trained professionals of the mind would be used. Extreme segregation
would be used to deal with subject matter. No jail guards, but social workers, trained to deal with minor & major mental problems. All State & Fed-
eral cases will be housed together. The
aim of program is to rehab a human
being and for that system to be self suff-
icient and cause no ills to the taxpayer.

Star C: Open up lower half Mississippi River and create 2 colossal canals. One canal would flow east to Florida; the other canal wpuld flow west to Midland Texas. This project is entitled Lower Mississippi River Fresh Water Project.

Star D: A Maglev Monorail system to connect New York to Los Angeles. A rail would run through center of United States. North and south legs branch off main rail.

Star E: Algae crop farming. An area of 15,000 square miles could create enough biofuel for the entire United States of America. Land masses in Mexico, Florida, Louisiana, and Arkansas are being considered for use.

Friday, May 9, 2008

membership and function of the Presidents Club

The members of the Presidents Club are professionals, with birthplace and citizenship of the United States of America. The Presidents Club may act as a vehicle or mouthpiece of its members, in the political field of the United states and all areas of the world.

Members of this club ran for President of the USA in the 2008 primary elections, and gained valuable political experience.

Place of business will originate from Tucson, Arizona, and extend into all areas of this great planet Earth.