A sort of Saudi Arabia within the United States

Eli,

A study "Oil: The Next Revolution," by Leonardo Maugeri of the Harvard Kennedy School, Belfer Center for Science and International Affairs was published this month.

The first paragraph of the Executive Summary:

"Contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption. This could lead to a glut of overproduction and a steep dip in oil prices."

Further on in the report, talking about estimates of the Bakken Field in North Dakota (the state with the lowest unemployment rate in the nation):

A sort of Saudi Arabia within the United States. While the free market delivers reliable, cheap energy to American consumers and industry, the US Government continues to invest in high cost, unreliable sources of energy like solar, biomass and wind.

Bill

Why Americans Hate Obamacare (And Will Hate Romneycare Even More)

Bill,

At dinner Friday night in a beautiful little town on the Massachusetts seacoast, I shared the table with a self described arch conservative, and did my best to enjoy my meal while listening to him rage against the evils of the ACA. Knowing that he has a small business in the state and 2 children their early 20s, I politely inquired whether he takes advantage of the components of the Massachusetts health care law (aka Romneycare) that work to his advantage. He answered, "I  know its hypocritical, but yes of course I do."

Like a thunderbolt it hit me. American hate the ACA because the vast majority of them (>80%) already have pretty good health care, and they see the law, correctly, as a benefit for those who don't. For the adequately insured, (and I include Medicare recipients in that category), the ACA offers no particular advantage. When most Americans ask "What's in Obamacare for me?" the answer for most of them is "Nothing, except your tax dollars will have to pay for it."

Roosevelt understood the critical intersection between self interest and societal interest when he insisted that Social Security benefits would be extended to all citizens whether they needed them or not. Otherwise, he correctly foresaw that Americans would come to see Social Security as a welfare plan and resent it as a giveaway to the undeserving (i.e not them).

But as Obamacare passes into history, either via Supreme Court rejection or repeal by a  Republican Congress in 2013, policy makers would do well to remember the flip side of a  politics based primarily on perceived self interest. For if we don't like someone else benefiting from the government's largess, we will scream like an enraged 2 year old when the goverment takes away something from us that we already have. Republicans understood this completely when they portrayed the ACA as "taking away away your Medicare" a program they would like to dismantle. So be careful President Romney. Go ahead and try to  "reform" Medicare outside of the framework of comprehensive tax reform and deficit reduction. I double dog dare ya.

Eli

Eli,

I haven't read the article referred to. But I've mentioned this in the past. One of the big unspoken costs the deficit imposes is a lower growth rate. It's not just that we pass on a debt burden to our children and grand children. It's also the economy grows at a slower rate making it even more difficult for them to pay off that debt.

If the young knew about this inter-generational wealth transfer that was taking place, and how we were placing major impediments in their path, I doubt they'd be happy. 

Bill.

Study: Long-term deficits are linked to 24 percent lower growth

What's the real harm of a massive government deficit? Carmen Reinhart, Vincent Reinhart, and Kenneth Rogoff find that high public debt is associated with a significantly lower level of GDP in the long run.

In a new paper for the National Bureau of Economic Research, the researchers examined the historical incidence of high government debt levels in advanced economies since 1800, examining 26 different "debt overhang episodes" when public debt levels were above 90 percent for at least five years.

The debt episodes included everything from Netherlands' Napoleonic War debts and the Japan banking crisis of the 1990s to Greece's current fiscal crisis. On average, the researchers found that growth during these periods of high debt were 1.2 percent lower on average, consistent with Reinhart and Rogoff's findings in 2010. What they also found, however, was these episodes of high debt and lower growth were quite lengthy, averaging 23 years. And the accompanying long-term drag on GDP was substantial. "By the end of the median episode, the level of output is nearly a quarter below that predicted by the trend in lower-debt periods," they explain.

Such findings strengthen the case for tackling the long-term deficit in the United States, where the debt-to-growth ratio shot past 101 percent in February. But the authors also warn that their paper shouldn't be interpreted as a manifesto "for rapid public debt deleveraging in an environment of extremely weak growth and high unemployment."

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Original Page: http://feeds.washingtonpost.com/click.phdo?i=ea0214a855d72c5165bbe295157befe4

Brooks this morning

Eli,
I'm not a big fan of Brooks, but I liked the article this morning. However, why he believes Romney is puzzling. Brooks can be a tad gullible, in my opinion.

I think too many want to double down on our current health care arrangements. Too many think it can be fixed. I want the structure fundamentally changed. Same for education and pensions.

Obama wants to double down. Romney says he wants change at the core. Unlike Brooks, I don't believe him.

Bill

From Your Lips to God's Ear, David

Bill,

David Brooks (the country's greatest columnist IMO) writes in todays New York Times

"Mitt Romney .....would structurally reform the health care system, moving toward a more market-based system. He would simplify the tax code. He would reverse 30 years of education policy, decentralizing power and increasing parental choice. The intention is the same, to create a model that will spark an efficiency explosion, laying the groundwork for an economic revival. "

If only it turns out to be so. If only he doesn't do most elected officials do, open the gates to the government trough to the folkss who get him elected. Does anyone think Sheldon Adelson put up 10 million bucks out of the goodness of his heart?

Eli

With friends like this...

Eli, 

With friends like this, Obama doesn't need enemies.  

Bill

The Washington Post: Obama's debt falsehood

Obama's debt falsehood
http://wapo.st/KFH4xq

Cuomo is a Genius: Restricts Gas Drilling to Areas Where there is Gas

Eli,

I have little respect for Andrew Cuomo, but this is pure genius. His plan is to allow gas drilling with hydraulic fracturing in the Marcellus Shale areas close to Pennsylvania and restrict it from areas that are close to the water supplies of New York City and Syracuse.

Now where do gas companies want to use hydraulic fracturing? You get one guess: In the Marcellus Shale areas close to Pennsylvania. Cuomo is allowing oil and gas companies to drill for gas in areas where they think they will be successful.

Genius.

Bill