The Shackles of Change 2

 

For those of you just ecstatic about all the hollow promises Obama had with his universal healthcare, consider this article regarding a recent analysis by the Health and Human Services Department.  Sure, more people will be covered, but the cost will be more and Medicare is in serious jeopardy- please pay particular attention to the words “unsustainable” and “insolvency”.  These are mighty strong words by an ”impartial” government entity regarding a bill that is supposed to be the the equivalent of the very tablets of Moses.  Then, if you care to, take a gander at reader’s comments- one even suggested that a public option is now necessary!  Yeah!  Give the government even more power at ineptitude at the cost of our children and grandchildren! 

Thought you were going to be among the chosen that would not have to pay higher taxes because you earn less than $250,00 per year?  Sorry, not according to the Joint Committee on Taxation.  The healthcare reform has a good chance of dragging you in to Obama’s already broken promise, “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”  Shoulda’ just started with “read my lips” you damned LIAR!

In addition to everything we are already burdened to pay, the snakes in Congress are now considering a Value Added Tax!  This taxes the production of goods at every level of production- something that is currently not done.  Guess who pays for that…every blessed American already struggling to feed his or her family!!!  On top of the internal economic strain these taxes are going to cause, the VAT is going to make us even less economically viable against our foreign competitors by making goods more expensive!

Where is the departure from the status quo, Mr. Obama?  You must truly believe we are stupid!

What foolishness this country has embarked in!!!

The Subsidy “Solution”

I have started going to school again for business management.  Almost all of my courses are online with the exception of one that is a hybrid.  I’ve never taklen online classes before, so there is a hectic power curve, but it’s a fun experience.

One of my classes is Principles of Supervision and an assignment I recently had presented a scenario in which a new technology manufacturer was coming to a town that was hard it with an economic downturn due in large part to international competition and automation of its primary industry- textiles.  Part of the assignment was to answer if it is ethical for the local government to provide significant incentives to the new company while its current businesses struggle.  I know I went on a bit of a tangent in my response, but it seemed relevant:

“Governments should not offer any sort of subsidy to attract business (however which way you dice it, tax breaks are subsidies).  Such a practice creates exactly the kind of conflict that is presented in this scenario.  Unfortunately, it is now commonplace and I don’t know how governments don’t get sued over it.  Whether or not business is struggling with market factors such as automation or global competition is immaterial.  Such challenges are inherent with free market.  Once government steps in to try to mitigate market influence the performance of the “saved” business is proportionately less influenced by the effectiveness of its management or marketability and more influenced by the policies and decisions of the government.  This creates a compounding effect that ultimately leads to the economic failure of the business so that, if it cannot save itself from government dependence, it becomes a ward of the state and no longer a free market enterprise.  Historical proof of this is passenger railroad service, auto makers, and the mortgage industry.”

The Public Option Syndrome

I think I found a new website that I will be checking often at politifact.com.  They have a heap of interesting information that at least appears to be objective analysis of current politics.  One of them is a rating of Obama’s campaign promises.  I particularly want to focus on their “truth-o-meter” (I love it!) rating of Obama’s insistance on creating transparency in the federal government.  Simply put: abominable.

Now that I have your attention, let’s all do a little exercise: Do an internet search for “What is a public option” or any other variation of this term to try to find an official definition for the Pelosi Pet Project.  Take as long as you like…

Tons of speculation by bloggers, activist websites, and some journalists, but absolutely nothing of value from our very pushy democrat legislators.  What on Earth is this “option” that the Obama, Pelosi, Reid dream team has been pushing so hard for?  Seriously…I heard audio on the radio today of Pelosi literally giggling that the insurance companies will “be begging for a public option” after all the regulations that will be imposed on them through what’s left of her precious health bills (I am deeply sickened that a U.S. representative would take such pleasure in threatening private businesses with being forced to submit to government programs).  With Pelosi’s remark, it seems clear that creating competition isn’t much on the radar with the public option (not that government can EVER do that, but let’s pretend anyway).  Crushing insurance companies is the goal by first smearing them with all the claims of monopolies, huge profits, and inadequate coverage and then squeezing them into accepting whatever federal plan will magically manifest from the Congressional lunacy. 

The only thing trasparent about this administration is the pure joy our representatives glow with when they speak off the cuff about all the wonderful things they can do to get back at corporate America when they aren’t grand-standing with speeches of their service to America while collecting from the taxpayer’s pocket.

This isn’t reform.  It’s a sickness.

Why ANWR?

    

     The question has been asked over at Berry Street Beacon “Why ANWR?”.  This is such a common question that I felt compelled to do some research and provide an answer.

      ANWR is the Arctic National Wildlife Refuge and constitutes about 19 million acres of Federally protected land in the Northern part of Alaska.  There has been considerable interest by the government and the oil industry in developing oil resources in a parcel called “Area 1002”.  This area is approximately 1.5 million acres and was designated in 1980 by Congress and Jimmy Cater for potential energy production.  Due to Federal regulations imposed on the development of oil in this particular area, the total footprint of any oil development cannot exceed 2,000 acres (There are a lot of references to this limitation, but I have not been able to find any Act or legislation supporting it).  In total, the expected footprint of any development in ANWR is expected to be .01% of the total acreage of ANWR.  In fairness, it is somewhat important to point out that “total footprint” means that drilling activities (including roads, airstrips, storage facilities, etc.) could be spread out over a large area so long as the total acreage does not exceed 2,000.

      Economically, the interest in developing Area 1002 is easily justified.  Alaska produces about 740,000 barrels of oil per day and is expected to decline to 540,000 by 2014.  The mean expected peak daily production of Area 1002 is right around 780,000 barrels of oil per day.  Estimated production could be as little as 510,000 or as high as 1.45 million barrels of oil daily.  Since all estimates have Area 1002 productive beginning in 2018, Alaska’s revenue from oil will as little as double or as much as quadruple in that time period through ANWR production.  Alaska’s current annual oil revenue is $5.2 billion.  Since Area 1002 is expected to generate $590 billion over it’s productive life (with mean production assessments) and we assume that to be 30 years, Alaska will generate $16.6 billon per year in oil royalties after a total cut of $59 billion to the Federal government.  There’s potentially plenty of money to be had by everyone which is reason enough for all the hand wringing over when to start drilling.

      The impact of ANWR production on global oil prices will be paltry- somewhere around 1% decrease in oil prices.  However, domestically ANWR could represent 20% of total US oil production.  With all the fuss attempting to counter Sarah Palin’s fiscal policies as Alaska’s governor during the 2008 presidential campaign by pointing out that Alaska is the #1 state in federal dollars spent per capita, it would seem logical that Alaska should be given the opportunity to step up and earn part of its keep through ANWR oil production, despite justifications for Alaska’s need for those dollars.  Since Alaska currently receives about $9.2 billion annually from the federal government and the federal government should expect to receive about $2 billion per year from ANWR oil royalties, this would put Alaska significantly lower on the naughty list (I must point out that the #1 rating for Alaska is related to “per capita” spending and not actual dollars spent.  Many other states that are far more established in far less demanding climates/geography receive billions more in total spending, but their populations are much, much higher.  Ahem, California, New York, Texas, Florida, and Pennsylvania).

     Charlotte at the Beacon points out that government assessments of ANWR include statements pointing out that nothing is guaranteed- well, duh!  Any oil company will tell you that searching for oil is not a guaranteed science and that oil isn’t “there” until you actually pop a well (which is a very expensive endeavor, by the way).  Such statements in the EIA summary are obligatory CYA “disclaimers” in the unlikely event that Area 1002 proves to be unmarketable.

      Environmentally, there are arguments abound about how horrible the impact of drilling in Area 1002 will be on the “fragile” environment.  All I can say is read the arguments (pro and con) yourself and come up with your own conclusions.  The irony in all the environmental fuss is that it is based on more conjecture than the oil assessments.  There is no absolute evidence that Area 1002 has as much oil as it is estimated to have and there is even less evidence of the environmental impact of ANWR oil wells because guess what…THEY AREN’T THERE.  The oil estimates are partially based on the yields of surrounding wells in addition to proven scientific analysis of the area while the projected environmental impacts are entirely based on those same wells which have outdated technology and are about 6x as intrusive as current methods of drilling.

     In my opinion, the benefits of developing Area 1002 far outweigh the risks.  The environmental requirements that will be imposed on the oil developers will ensure that as much risk as possible is eliminated and that the land is restored once the wells are no longer useful.  Area 1002 would not have been Federally established unless there was already evidence of great potential resources.  The costs incurred both by government and private organizations necessitates that we move forward with the sensible plan that has already been outlined to exploit those resources and start making some moolah!

Why ANWR?  For the capitalists out there I’ve already given my answer.  For the liberals and progressives: Because the government said so, damn it!