A new paper from the folks at The R Street Institute and The National Taxpayer’s Union, 2 pretty solidly conservative to libertarian thought leaders.
Defense isn’t a black hole which conservatives can continue to throw money down and feel OK about it. The military is expensive and conservatives need to come terms with this. (Many are thankfully.)
Wars, contrary to what Keynesian (mostly liberal) economists will tell you, drain the economy. For the most part war is a poor use of resources, at least the kind of wars this country has been engaged in as of late.
The Pentagon needs to be cut just like the rest of government needs to be cut, and in a big way. Sequestration, for all the gnashing of teeth is a tiny part of what needs to happen in coming years. The military must have a smaller footprint and soon.
(From the paper)
“Conservatives should insist that defense spending be examined with the same seriousness that we demand in examining the books of those government agencies that spend taxpayer money in the name of welfare, the environment, or education. We laugh at liberals who declare that their favorite spending programs should be exempt because the spending is for a noble cause.” – Grover Norquist
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Joshua Keating over at Foreign Policy offered a thoughtful commentary on Rob Montz’s North Korea documentary, “Juche Strong,” after last Thursday’s screening at Cato. Keating contended that the film, which suggests that pervasive regime propaganda has created at least some degree of legitimacy in the minds of many North Koreans, makes a case “that the United States needs to maintain its current military commitment to the region.”
No doubt, it would be better for the Republic of Korea and Japan if the North was made up of “cowed and terrified people who will abandon their leaders at the first signs of weakness,” as Keating put it. But even popular determination and commitment—so far untested in an external crisis—go only so far. The question is not whether the so-called Democratic People’s Republic of Korea is a threat, but 1) whether it is a threat which cannot be contained by its neighbors and 2) is a sufficient threat to America warranting U.S. led containment. The answers are no.
First, the DPRK has amassed a large army with lots of tanks, but training is limited and equipment is antiquated. The North’s forces could devastate Seoul with artillery and missile strikes and a 4,000 tank surge might reach the South’s capital, but North Korea would be unlikely to ultimately triumph. The latter is weak in the air and with a decrepit economy can ill afford anything other than an unlikely blitzkrieg victory. Nor could Pyongyang look to Russia or China for support: the Cold War truly is over.
More important, the ROK, which currently possesses around 40 times the North’s GDP and twice the North’s population, could do much more in its own defense. South Korea has created a competent, modern, and sizeable military. Is it enough? Only Seoul can answer.
If the South remains vulnerable to a North Korean strike, it is only because the ROK decided to emphasize economic development and rely on America. That made sense during the early days of the Cold War, but no longer. There is no justification for turning what should be a short-term American shield against another round of Soviet- and Chinese-backed aggression into a long-term U.S. defense dole. It doesn’t matter whether the North Koreans are “Juche Strong or Juche Harmless,” as Keating put it. South Korea can defend itself. (Doing so would be even easier if Seoul and Tokyo worked harder to overcome their historical animus. Alas, they feel little pressure to do so as long as they both can rely on Washington for protection.)
Second, the DPRK poses no threat to America requiring an ongoing military commitment. Even in 1950 the Pentagon did not believe the Korean peninsula to be vital strategically, but the Cold War created a unique context for the conflict. Today a second Korean War would only be a Korean War. Tragic, yes. Threat to America, no. Pyongyang is an ongoing danger to its neighbors, not the United States.
The North matters to the United States primarily because Washington remains entangled, with troops, bases, and defense commitments. That is, North Korea threatens America because Washington chooses to allow North Korea to threaten America.
Of course, proliferation would remain a concern even without a U.S. presence in Korea, but America’s garrison does nothing to promote denuclearization. To the contrary, Washington is helpfully providing tens of thousands of American nuclear hostages if the DPRK creates an arsenal of deliverable nuclear warheads. It would be far better for U.S. forces to be far away, out of range of whatever weapons the North possesses.
North Korea is only one side of the Northeast Asian balance. It doesn’t much matter if Pyongyang is weak or strong so long as South Korea and Japan are stronger.
View full post on Cato @ Liberty
Deo Vindice wrote:
Maybe it’s time to get out of home ownership for awhile.
You know, sell the house, park the money in PMs, and rent until prices fall off the cliff, then buy back in.
I wonder if there is any one advocating THAT kind of strategy?
Statistics: Posted by yoda — Mon Feb 18, 2013 12:20 am
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And that something is a national ID.
The quote is Senator Chuck Schumer’s (D-NY), speaking about immigration reform at Politico’s Playbook Breakfast. The national ID gloss is mine, based on the immutable logic of “internal enforcement.”
Senators Schumer and McCain (R-AZ) say that the “Gang of Eight” senators who are working up an immigration reform package are united on the idea of making it impossible for illegal immigrants to get work in the United States. The only way to do that is to put all working Americans—if you work, that means you—into a national ID system.
“People say, ‘National ID card,’” Senator Schumer says. They do because that is what he’s talking about.
Now, they haven’t gotten all the way through the logic of their plans. Senator Schumer talks about a “non-forgeable [Social Security] card,” but a Social Security card only proves that a certain name is linked to a certain number. If a system is going to prove that a given person is entitled to work in the United States, it must be an identity system. It must compare the identifiers of the person to the identifiers in the system, whether held on a card or in a database, so that it can assess their legal status, including natural-born citizenship.
This is why Senator Schumer also talks about biometrics. The system must biometrically identity everyone who works—you, me, and every working American you know. There is no way to do internal enforcement of immigration law without a biometric national identity system.
It looks as though E-Verify, an incipient national ID system, will be a part of most or all comprehensive immigration reform proposals. Ironically, immigration reform that aligns the law with our country’s economic need for labor would obviate the need for E-Verify and a national ID.
There are lots of ways to become familiar with the national ID issues that have yet to bubble up in this early stage of the immigration reform debate. My 2006 book, Identity Crisis, is a decent primer on identity and national ID generally. I examined the direct line between internal enforcement of immigration law and a national ID in my 2008 paper: “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration.” And my article in last year’s special Cato Journal on immigration reform was called: “Internal Enforcement, E-Verify, and the Road to a National ID.”
View full post on Cato @ Liberty
WHEN THE MALLS COME TUMBLING DOWN
Posted on 8th January 2013 by Administrator in Economy |Politics |Social Issues
FEMA camps, Jeff Jordan, Malls, online retail, Retail
Excellent article from Jeff Jordan http://jeff.a16z.com/2012/12/21/why-mal … ng-mauled/ about the coming day of reckoning for our mall based retail paradigm. These malls will come tumbling down. There are 1,000 large malls in the country and over 200 of them have vacancy rates over 35%. They constitute the ghost malls of America. The thousands of strip malls are in even worse shape, as mom and pop retailers don’t have the staying power of dying behemoths like Sears and JC Penney. The author points to on-line retailing as the reason for the coming demolition of malls across America. He is partly right. The numbers speak for themselves.
In 2007 the total retail sales, excluding auto sales, in America were $3.09 trillion. In 2012 they will be approximately $3.45 trillion. That is a 12% increase in five years. This is not very good considering government reported inflation was 11% and real inflation for real people was closer to 20%. If you back out gasoline sales, then retail sales only grew by 8.7%. Now we get to the internet retail revolution. Internet retail sales totaled $309 billion in 2007 and will total $435 billion in 2012, a phenomenal 41% increase in five years. If you back that out, then retail sales from bricks and mortar mall based stores only grew by 6% in the last five years. This is an epic fail. We know for a fact that Sears and JC Penney are in death spirals. One or both are the anchors in most of the largest malls in the country. Their eventual bankruptcy will be the final nail in the coffin of mall based retailing. As the price of gasoline continues to rise, internet sales will continue to eat away at bricks and mortar. We are watching a slow motion train wreck in progress.
Jeff Jordan’s charts showing vacancy rates in malls reveals another truth. With vacancy rates this high, real estate developers should be going bankrupt, as their rental income can’t possibly be covering the interest expense on their loans to the Wall Street banks. The Wall Street banks have pretended the loans are being paid and the developers are pretending to pay them. Ben Bernanke and the Fed have instructed the Wall Street banks to not foreclose on these developers for non-payment, waiting for the economy to recover. It hasn’t happened and will not happen. There are hundreds of billions of bad debt sitting on JP Morgan, Cititcorp and the rest of the criminal cabal banks that should be written off today. The imminent demise of Sears and JC Penney will be the reality check as developers go under en masse.
The delusional retail CEOs will never admit the truth until it is too late. These brilliant strategists all use the same game plan. As sales continue to decline, they cut staff and reduce benefits. Have you been in a big box retailer lately? Try finding a worker who knows anything. As the experience of physically visiting a retail store becomes so repugnant that it makes you physically ill, you do more of your purchasing on-line. It’s a slow steady spiral downward for bricks and mortar retailing – except for JC Penny were it is a rapid spiral. Most of the major retail chains have either stopped expansion or slowed it dramatically since 2007. Even with no new stores, sales continue to deteriorate. Middle class America has run out of money. The lack of expansion is about to transition to a the closing of thousands of stores in the next few years.
Maybe the government can make lemonaide out of lemons. The 200 or 300 ghost malls can be converted to FEMA holding facilities or massive soup kitchens and homeless shelters after the USD collapses. I always try to find the bright side to a bad situation.
Why Malls Are Getting Mauled
Online is clearly taking share from brick and mortar…this is likely to continue
—International Council of Shopping Centers, last week
America has too many malls.
I’ve recently blogged that many traditional brick-and-mortar retailers are being threatened with “economic destruction” by their advantaged online competition. In an interview with Bloomberg TV, anchorwoman Nicole Lapin asked about the implications of this dynamic on retail real estate. I said I hadn’t studied it, but I thought the ramifications would be very big and very negative (I believe the phrase “apocalyptic” was used).
I’ve since had the opportunity to spend some time looking at this issue, and I believe we’re seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate. Online retailers are relentlessly gaining share in many retail categories, and offline players are fighting for progressively smaller pieces of the retail pie. A number of physical retailers have already succumbed to online competition including Circuit City, Borders, CompUSA, Tower Records and Blockbuster, and many others are showing signs of serious economic distress. These mall and shopping center stalwarts are closing stores by the thousands, and there are few large physical chains opening stores to take their place. Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.
There are very few thriving physical retailers these days outside of the daily consumables markets. I did a quick analysis on the high-level health of the National Retail Federation’s list of the Top 100 retailers in 2012, focusing on merchandise retailers that would likely be located in malls (removing grocery, drug, restaurant and online retailers). I looked at three measures of retailer health: total sales growth, comp store sales growth and number of stores.
The analysis doesn’t paint a very pretty picture regarding the health of the leading physical retailers in the United States. Total sales growth is mixed and is negative for 20% of the sample. Comp store sales growth—arguably the key measure of retailer health—is also mixed and a quarter of the sample is negative. And note that many of these sales results include the retailers’ online segments, so the picture for their physical stores is even worse. Lastly, store counts are simply stagnant—about as many top retailers shrank their store count as expanded it, and precious few are expanding aggressively. The largest retailers in the U.S. do not look very healthy. And if they’re struggling, it’s likely that their more marginal physical competitors are struggling even more.
I went back to the Top 100 retailers in 2007 to see how that crop had fared five years later and found that four of these top retailers had already gone away through Chapter 11. Interestingly, the picture of these four doesn’t look that different than the 2012 list.
This declining retailer health is directly impacting malls and shopping centers in the form of very high vacancy rates and sluggish rents—exactly what you’d expect to see where supply exceeds demand. Both factors deteriorated quickly during the economic crisis of 2008-09, but they’ve shown virtually no improvement since in spite of improved economic conditions. The recession was the catalyst, but competition from online retailers can only be the continued driver. The mall business isn’t very healthy either.
These trends are hitting the market capitalizations of most of the largest owners of retail real estate. Simon, General Growth, DDR and Kimco between them own over 600 MILLION square feet of U.S. retail real estate, according to nreionline. Simon’s stock has performed strongly, but the other three stocks have created virtually no value over the past decade.
Most real estate professionals understand that profound changes are afoot. Don Wood, CEO of Federal Realty Investment Trust, says “there is too much retail supply in this country.” The Wall Street Journal reports “Green Street Advisor, an analysis firm that tracks REITs, has forecast that 10% of the roughly 1,000 large malls in the U.S. will fail within the next 10 years and be converted into something with far less retail. That’s a conservative estimate; many mall CEOs predict the attrition rate will be higher”. And Daniel Hurwitz, president and CEO of DDR, observes, “I don’t think we’re overbuilt, I think we’re under-demolished.”
I agree with the above perspectives, although I believe they likely understate the eventual impact on malls. A report from Co-Star observes that there are more than 200 malls with over 250,000 square feet that have vacancy rates of 35% or higher, a “clear marker for shopping center distress.” These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.
This in turn creates further opportunity for online commerce. If I were thinking of starting a new retail brand right now, I would unquestionably start it online. And many very talented entrepreneurs are doing just this! I personally shop at Bonobos for pants, J.Hilburn for sweaters, Ledbury for shirts and Warby Parker for eyeglasses. All of these brands design and source their own goods. They historically would have started in the mall but they now are starting online, a trend that will undoubtedly continue. There clearly will be fewer new offline retailers to take the space vacated by the disappearing brick-and-mortar chains, further pressuring malls.
And in an ironic turn, many of these online brands are experimenting with offline stores—but typically with some important twists. Bonobos and Warby Parker have built showrooms in their New York offices where consumers can come in and try on samples. But if the consumer wants to purchase items, then the companies fulfill the product from their warehouses—they don’t stock inventory in their “stores”. Bonobos has expanded this concept into a few additional locations, but not mall locations. Instead, they are selecting lower cost, non-mall locations and using emails to their online customers to drive folks to these locations. They do this because a consumer’s purchasing typically expands after a visit to their physical store, and the costs are not high given the lack of inventory and lower rents and staffing costs. If this trend expands, it will provide further challenges to malls.
In researching this post, I came across a fascinating (and slightly morbid) website called deadmalls.com, a site that chronicles the tales of hundreds of already or soon-to-be dead malls. Co-founder Brian Florence writes, “I started deadmalls.com with my friend Peter Blackbird in 2000 when we both realized that Pete had mountains of data about dead and dying malls stuck up in his head. Why keep this information to yourself? And, realizing the burgeoning power of the Internet and its ability to draw in more information, the site was created to harness stories of woe and merriment from others. It’s been a great success.”
Unfortunately for mall owners, the content on deadmalls.com is about to expand substantially. There just are too many malls in America, and this will only get worse.
Statistics: Posted by yoda — Tue Jan 08, 2013 12:47 pm
View full post on opinions.caduceusx.com
GOVERNMENT WEBSITE FOR IMMIGRANTS: COME TO AMERICA AND TAKE ADVANTAGE OF OUR FREE STUFF
Posted on Nov 20, 2012
A website run by the federal government (“WelcomeToUSA.gov“) encourages new immigrants to the United States to apply for welfare benefits. This website is run by the Department of Homeland Security and it says that it “is the U.S. Government’s official web portal for new immigrants.” So your tax dollars were used to build and maintain a website that teaches immigrants how to come into this country and sponge a living off of federal welfare programs paid for by your tax dollars. What in the world is happening to us? Yes, we will always need some legal immigration. We are a nation of immigrants and immigration has been very good to this country.
But at a time when there are millions upon millions of American citizens out of work and at a time when we are absolutely drowning in debt, do we really need to encourage millions more immigrants to come over and take advantage of our overloaded social welfare programs? WelcomeToUSA.gov actually encourages new immigrants to apply for food stamps, Medicaid, Medicare, Social Security, Supplemental Security Income and Temporary Assistance for Needy Families. Of course not all immigrants are eligible for all of those programs, but if an immigrant can get over to the U.S. and just get signed up for a couple of programs they can enjoy a higher standard of living doing nothing here than they can working at a low paying job back home. We have created a perverse system of incentives that makes it very attractive to people all over the world to do whatever they can to hitch a ride on “the gravy train” and take advantage of all of the benefits that they possibly can.
And once immigrants get on welfare, many of them never leave. For example, one study discovered that 43 percent of all immigrants who have been in the United States for at least 20 years were still on welfare. We can’t even take care of our own citizens, and yet more immigrants hop on to the safety net every single day. At some point the safety net is going to break and then we won’t even be able to take care of the struggling Americans that really need it.
When I first discovered WelcomeToUSA.gov I was absolutely floored. In particular, the page that encourages immigrants to apply for federal welfare benefits is just shocking. Here is the opening paragraph…
Depending on your immigration status, length of time in the United States, and income, you may be eligible for some federal benefit programs. Government assistance programs can be critically important to the well-being of some immigrants and their families. Frequently, however, there is a lack of information about how to access such benefits. Benefit programs can be complicated and you may be given misleading information about how they operate.
The page also contains a list of links where new immigrants can find instructions about how to apply for programs such as Medicare, Medicaid, Social Security, Food Stamps, Supplemental Security Income and Temporary Assistance for Needy Families…
The links below will lead you to official government websites describing a range of assistance programs.
Official website with information on all available federal benefit programs. (Englishversion – Spanish version)
Official website for Medicare, the health insurance program for people 65 years of age or older or who have specific disabilities.
Official website for Medicaid, the joint federal/state medical care program for low-income people.
Official website for the Social Security Administration. (English version – Spanishversion)
Social Security information available in foreign languages.
Information on Supplemental Security Income benefits for aliens.
Information on the Food Stamp Program for low-income families.
A website containing links to available federal information in other languages.
Information on the Temporary Assistance for Needy Families (TANF) Program.
Information on access to federal benefits and services for immigrant survivors of domestic violence.
So why is the Department of Homeland Security doing this? The following is what the Daily Caller was toldwhen they asked…
USCIS spokesman Bill Wright told The Daily Caller that the site is not intended to advise individuals on their eligibility.
“The website seeks to improve access to federal government information on the Internet by consolidating information into helpful categories and highlight new resources available to immigrants and the organizations that serve them,” Wright explained in an email.
Well, isn’t that special?
Perhaps this could be their new slogan: “Come To America And Take Advantage Of Our Free Stuff”.
Sadly, the truth is that our insane immigration policies are doing an incredible amount of damage to this country. Our current system makes it very difficult on those immigrants that want to do things the right way and that want to come into this country for the right reasons. On the other hand, our current system makes things very easy on those that want to come into this country illegally and on those that want to take advantage of our generosity.
Posted below is a list of 10 things that are going to happen if the federal government continues to systematically legalize illegal immigration that comes from one of my previous articles. Illegal immigration is causing chaos in communities all over America, and it is going to get a lot worse if changes are not made…
#1 There Will Be Fewer Jobs For American Workers
In the United States today, 53 percent of all college graduates under the age of 25 are either unemployed or underemployed. Many of them are absolutely desperate for work.
Overall, there are more than 100 million working age Americans that do not have jobs right now.
Meanwhile, millions of illegal immigrants are occupying jobs that could otherwise be held by American citizens. Many employers prefer to hire illegals because they work for a lot less money.
Sadly, many prominent politicians actually support the “right” of these “undocumented workers” to steal our jobs as a recent article by Devvy Kidd pointed out….
In April 2008, the very popular, New Jersey Gov. Chris Christie, prostituted himself during a speech for votes at an event sponsored by the Latino Leadership Alliance of New Jersey by assuring his audience illegal aliens were not really here illegally, but were simply “undocumented.”
The ‘unofficial’ number of unemployed Americans is close to 25 MILLION. Those “undocumented” criminals Gov. Christie refers to are illegally holding 11.5 MILLION jobs that belong to Americans and naturalized citizens. Shame on you, Gov. Christie for thumbing your nose at our federal immigration laws and encouraging even more criminals to break into our country. Roll out the welcome mat. Unemployment in New Jersey is holding at a steady 9.3%. Gov. Christie apparently doesn’t care if jobs go to illegal aliens instead of legal citizens in his state. After all, they’re simply “undocumented”.
#2 Wages For American Workers Will Continue To Decline
When you have a lot more workers competing for the same number of jobs, what happens?
That is right – wages go down.
We are seeing this happen in industry after industry.
For example, several decades ago a roofer could live a nice middle class lifestyle and support an entire family on one income.
But today that is no longer the case.
So what has changed?
A flood of illegal labor has entered the marketplace.
#3 Illegal Immigrants Will Overwhelm Our Welfare System
Every year, illegal immigrants receive tens of billions of dollars in welfare payments. They get free food assistance, free housing assistance, free health care benefits and free education for their children. Life is good if you are an illegal immigrant and you know how to game the system.
In fact, many cities in United States now openly advertise that they will help illegal immigrants with these things.
Unfortunately, according to Devvy Kidd the cost to taxpayers is getting to be astronomical….
Last year alone, the cost to taxpayers of LA County was whopping $600 MILLION dollars in welfare for children of illegal aliens. I guess it doesn’t bother the people there getting fleeced in taxes to pay for all that welfare because they continue to elect governors who refuse to lock down the border and sympathizers of the invasion across the southern border of California to their legislature.
Overall, it has been estimated that U.S. taxpayers spend $12,000,000,000 a year on primary and secondary school education for the children of illegal immigrants.
#4 Mexican Drug Cartels Will Establish A Presence In Nearly Every City In The United States
Mexican drug cartels continue to expand their influence inside the United States at a frightening pace. They are slowly taking over our communities. How far do things have to go before we say enough is enough?
The amount of money that Mexican drug cartels bring in from selling drugs inside the United States is absolutely staggering….
In the sober reckoning of the RAND Corporation, for instance, the gross revenue that all Mexican cartels derive from exporting drugs to the United States amounts to only $6.6 billion. By most estimates, though, Sinaloa has achieved a market share of at least 40 percent and perhaps as much as 60 percent, which means that Chapo Guzmán’s organization would appear to enjoy annual revenues of some $3 billion — comparable in terms of earnings to Netflix or, for that matter, to Facebook.
Can you imagine that?
We are talking about serious money.
And Mexican drug cartels are not just operating in huge cities such as Los Angeles, Chicago and New York. The truth is that they have become deeply embedded in many rural communities as well….
News of cartel machinations are common in cities near the border, such as Phoenix, and the far-flung drug hubs of New York, Chicago or Atlanta, but smaller towns bring business, too. In unsuspecting suburbs and rural areas, police are increasingly finding drugs, guns and money they can trace back to Mexican drug organizations.
The numbers could rise in coming years. The Justice Department’s National Drug Intelligence Center estimates Mexican cartels control distribution of most of the methamphetamine, heroin and marijuana coming into the country, and they’re increasingly producing the drugs themselves.
In 2009 and 2010, the center reported, cartels operated in 1,286 U.S. cities, more than five times the number reported in 2008. The center named only 50 cities in 2006.
#5 There Will Be Increasing “Anti-American Violence” Inside The United States
These days a lot of Americans are being attacked (and sometimes killed) down in Mexico.
The following is from a recent ABC News article….
American travelers to Mexico should beware of possible violent retaliation for this week’s arrest of alleged Zetas drug cartel associates and family members inside the U.S., the U.S. State Department has warned.
Though the warning does not specify which “Transnational Criminal Organization” might engage in “anti-American” violence, on Tuesday federal authorities arrested seven alleged associates of the powerful Zetas drug cartel in New Mexico and Oklahoma for allegedly laundering millions in drug profits through breeding and racing quarterhorses in the U.S. Those arrested included Jose Trevino Morales, the brother of Zetas leaders Miguel Angel and Oscar Omar Trevino Morales, who were also indicted but remain at large in Mexico.
As Mexican drug cartels and criminal gangs expand north, it is inevitable that “anti-American violence” will spread deeper and deeper into the U.S. itself.
The level of violence that we are seeing down in Mexico right now is absolutely frightening. These drug cartels can be absolutely brutal….
Fourteen dismembered bodies were found in a truck in the center of a town in northern Mexico on Thursday in what appeared to be the latest atrocity committed by rival gangs battling over drug-smuggling routes, local media said.
The bodies of 11 men and three women were discovered in the sugar-cane farming town of Ciudad Mante in the south of Tamaulipas state, which borders on Texas, daily Milenio reported on its website.
Overall, more than 55,000 people have been killed in drug-related violence in Mexico since 2006.
Is that the kind of violence we want in this country?
Already the region along the U.S./Mexico border is an open war zone.
Just across the U.S. border, the city of Juarez, Mexico is considered to be one of the most dangerous cities on the face of the earth. In fact, Juarez is now the murder capital of the western hemisphere.
But instead of strengthening security along the border, Barack Obama wants to make the border meaningless.
#6 Massive Bribes Will Corrupt Our Judicial System
When there are billions of dollars involved, it is inevitable that some members of the police and some members of the judiciary will take bribes.
Just look at what has happened down in Mexico. The following is from a recent article in the New York Times….
When you tally it all up, bribery may be the single largest line item on a cartel’s balance sheet. In 2008, President Felipe Calderón’s own drug czar, Noe Ramirez, was charged with accepting $450,000 each month. Presumably, such gargantuan bribes to senior officials cascade down, securing the allegiance of their subordinates. “You have to recruit the high commands, so they can issue the information to lower ranks and order whatever they want,” the corrupt cop, Fierro Méndez, testified. But in key jurisdictions, the cartel most likely makes payments up and down the chain of command. In a 2010 speech, Genaro García Luna, Mexico’s secretary of public security, speculated that together, the cartels spend more than a billion dollars each year just to bribe the municipal police.
What would you do if you were offered a bribe of $450,000 a month?
Don’t assume that Americans are so much more “moral” than the Mexicans are.
#7 Gang Activity Will Continue To Grow In The United States By Leaps And Bounds
Gang activity is absolutely exploding inside the United States.
According to the FBI, there are now 1.4 million gang members involved in the 33,000 different gangs that are active inside the United States.
The number of gang members in America has increased by 40 percent since 2009.
Those stats should be very alarming to all of us.
What are we going to do if gangs keep growing at this rate?
According to federal statistics, gang members are responsible for up to 80 percent of all violent crimes committed in the United States every year.
A very large percentage of these gang members have entered the United States from Mexico, but the federal government refuses to do anything to stop it.
#8 The Decline Of Our Health Care System Will Continue To Accelerate
Illegal immigrants are overwhelming emergency rooms all over the country. They walk in, receive high quality treatment and often never pay after they leave.
Things have gotten so bad in many areas of the nation that it is causing entire hospitals to go bankrupt and shut down.
In a previous article, I described what unchecked illegal immigration is doing to the health care system in California….
Thanks to illegal immigration, California’s overstretched health care system is on the verge of collapse. Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants who were simply not able to pay for the services that they were receiving. As a result, the remainder of the health care system in the state of California is now beyond overloaded. This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths. Sadly, the state of California now ranks dead last out of all 50 states in the number of emergency rooms per million people.
#9 Legalizing Illegal Immigrants Will Cause A Huge Shift In Voting Patterns
Instead of looking out for the American people, many Democrats support legalizing illegal immigration because it will give the Democratic Party more support at the polls.
This is incredibly selfish and self-serving, but this is the way that the political game is played in 2012.
#10 There Will Be A Flood Of New Illegal Immigrants
Amazingly, far more people move into the United States illegally than come in through the legal immigration process.
As word spreads of the “Obama amnesty”, millions more will come on over. After all, what would they have to lose? If they get caught crossing over they will just get nicely sent back and can try again in a few days.
If they make it they can take advantage of all the free goodies here in the United States. Thanks to Obama, the odds of deportation are now very slim. And they can often make significantly more money in the “underground economy” in the U.S. than they can back home.
Statistics: Posted by yoda — Tue Nov 20, 2012 3:40 pm
View full post on opinions.caduceusx.com
By Ilya Shapiro
For more than three years now, Cato has been running a highly successful legal associate program. Talented recent law school grads have come to work for us during the time that their law firms have “deferred” their start dates (from a few months to a full year), with commensurate stipends, and many law schools have created post-grad fellowships with similar conditions.
As we approach 2013, it’s time to put out my semi-annual call for more potential legal associates. We can always use the extra brain, you can always use Cato on your resume, and your schools/future employers can always use your counting as “employed” for US News rankings/getting substantive legal experience — we all win!
And so, the Cato Institute invites graduating (and recently graduated) law students and others with firm deferrals or post-grad funding — or simply a period of unemployment — to apply to work at our Center for Constitutional Studies. This is an opportunity to assist projects ranging from Supreme Court amicus briefs to policy papers to the Cato Supreme Court Review. Start/end dates are flexible.
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India Power Outage: The Shape of Things to Come?
SUNDAY, AUGUST 19, 2012 2:12 PM
July 31: Indian national television reports on power outage (to a limited audience?!)
"So far as I am able to judge, nothing has been left undone, either by man or nature, to make India the most extraordinary country that the sun visits on his rounds. Nothing seems to have been forgotten, nothing overlooked."
Mark Twain, Following the Equator.
The enormous power cut recently seen in India, which affected perhaps 700 million people, serves to highlight the degree of the structural dependency we have built into our lives in the era of cheap energy.
Electricity is one of the most complex manifestations of our complex system and has come to be widely seen as a basic necessity. It enables many of our modern life support systems. Expectations have been raised, even in many of the slums of the world, that electricity will be available, at least some of the time. The lack of it, especially if that lack is sudden and unexpected, or prolonged, increasingly leads to social unrest.
It is instructive to contrast the extent of the dependency on electricity, and the expectations that surround it, in developing and developed economies. The way a blackout plays out in a place like India is quite different than a similar outage would be in a place where power supplies are far more reliable. The primary difference is one of resilience.
Power Generation and Infrastructure
The Indian blackout has been described as "an accident waiting to happen" by Suresh Prabhu, who ran India’s power ministry in the early 2000s. India’s electricity sector faces many chronic challenges thanks to the rapid development of the country. It is highly dependent on coal for 70% of generation, and commonly experiences coal shortages:
The fuel shortage is acute when it comes to coal, which accounts for two-thirds of the country’s power generation.
India has about 10 percent of the world’s coal reserves but output by the near-monopoly Coal India has stagnated, importing coal is far more costly and a lack of rail capacity from ports has held up supplies. Many power plants have less than seven days’ of coal stocks, a level seen as critical to continuous operation.
"Coal India has enough reserves. But evacuation (transportation) is the main problem," said a senior coal ministry official. He said Coal India had set aside $900 million to lay train tracks in the next five years but the railway ministry had not responded to the plan.
Generation is water dependent, and the delayed monsoon this year has exacerbated existing water scarcity, meaning less water for hydro power and for cooling other forms of generating capacity. Lack of cooling water could cause generation, notably nuclear plants, to be shut down. Temperatures have stayed higher than normal, increasing demand for space cooling at the same time.
The lack of rain has also increased the need for irrigation water for farming, meaning increased demand for the power to access and use groundwater. Power use by farmers is subsidized, hence there is little incentive for them to conserve. The effect on demand at times of low rainfall can therefore be considerable. Climate change is likely to accentuate the water problems in the future, as monsoons may be increasingly affected, the melting of glaciers in the Hindu Kush would also reduce surface water availability and heatwaves would increase evaporation.
The economic impact on state electric boards expected to supply subsidized demand to farmers and many others is considerable.
Perhaps the biggest challenge, though, is the health of decrepit distribution companies that depend on subsidies and face huge losses from low tariffs and rampant power theft. Together, they are now saddled with debt worth some $35 billion and are increasingly unable to pay for new supplies.
"Generation capacity will only get financed if the financiers feel that the generators are selling power to distributors who are financially capable of paying for it," Planning Commission deputy chairman Montek Singh Ahluwalia said recently in defense of a government plan to bail out the mostly state-owned distribution companies.
Populist-inclined state governments have made it difficult for distributors to set cost-reflective tariffs. However, with bank loans drying up, many distributors have been forced to raise tariffs sharply over the past six months.
Many of the state run electricity companies, which collectively lose $4.5 billion per year, are essentially bankrupt.
Supply, Demand and Unofficial Connections
Power infrastructure in India is not capable of providing the sufficient and reliable power supply that westerners take for granted. Some 300 million people have no access to electricity since the grid does not reach their areas.
While India ranks sixth in the world in terms of overall electricity production and consumption, its population of 1.2 billion means that per capita levels of electricity consumption remain low at just over 500 kWh per person per year, compared to more than 2,600 kWh in China and nearly 12,000 kWh in the United States.
Unlike in richer countries neither supply nor power quality can be reliably maintained:
Reliable operation of the large interconnected grids of North America and Europe is founded on established practices of tight frequency control and all control areas sticking to their respective interchange schedules. The grid frequency normally remains within +/- 0.03 Hz of the rated frequency, and any excursion beyond that is considered alarming. Utilities deviations from their schedules are minimal, and have to be made up in kind the next day. They are therefore not priced. Adequacy of generating capacity enables maintenance of requisite spinning and cold reserves at all times, for overcoming contingencies. In a regime with such discipline, all power plants must generate power according to the schedules decided by the concerned load dispatch centres, and pit-head and nuclear power plants can steadily operate at a substantially constant MW as per their respective schedule.
The situation, on each of the above counts, is very different in India. The peak-hour consumer demand far exceeds the available generating capacity. Capacity shortage is officially stated as around 15%. Load-shedding is a daily routine except in metropolitan cities and State capitals. Rural supplies are regularly rostered commonly and restricted to 8-12 hours a day in most States. State utilities, in their anxiety or compulsion to minimize load-shedding in their area, tend to overdraw power from the larger grid. Interchange schedules go for a toss, and frequency often plunges below the stipulated lower limits. As per a recent report, the frequency was below 49.2 Hz for about 25 % of the time during August 2009. On the other hand, industries and commercial establishments need back-up diesel generators for continued operation when power supply from the grid is cut-off or is curtailed (for a few hours every day), and domestic consumers have to bank on their own battery-backed "inverters" to get the basic amenities of light and fan round the clock.
Since deviation from drawal schedules of State utilities are inevitable and substantial, and cannot be returned in kind, they are priced. Utilities pay for overdrawal, and get paid for under-drawal at a frequency-linked rate, which goes up as frequency declines and goes down as frequency rises…
…Frequency is the most crucial parameter in the operation of an A.C. system. The rated frequency in India is 50.0 Hz. While the frequency should ideally be close to the rated frequency all the time, it has been a serious problem in India. There was a time it varied from below 48.0 Hz to above 52.0 Hz, even beyond its legally permissible limit of +/- 3%, i.e. from 48.5 Hz to 51.5 Hz as per Indian Electricity Rules, 1956…Frequency fluctuations are caused by load-generation imbalances in the system, and keep happening because consumer load keeps changing.
Poor power quality control has knock-on effects on equipment operation, including large-scale generation capacity. Equipment damage can, of course, further compromise supply and aggravate the effects of chronic fuel shortages. Crucially, nuclear plants do not function well in such an environment:
Nuclear power plants are particularly susceptible to frequency fluctuations. As frequency changes, the speed of the coolant pumps changes proportionately, and the coolant flow and consequently the temperature differential across the reactor also vary. The above temperature differential is a primary signal for reactor power control, and its variation gives a command for change of reactor power even when the reactor has been operating at the optimum level. This is turn causes unnecessary fluctuations of reactor power and undesirable wear of fuel rods, etc.
Demand often exceeds supply by 10%, hence rolling blackouts are a constant feature. Losses in the transmission and distribution systems are huge – 40-50% – thanks to decrepit infrastructure and extensive power theft. The power system (as with much of society) is plagued by corruption. This leads to great popular frustration:
Citizens could take to the streets if the blackouts continue, warned Harry Dhaul, director general of the Independent Power Producers Association of India, a non-governmental organisation that campaigns for improvement of the Indian power sector: "There will obviously be some agitation in urban areas, which have become very reliant on electricity … There could be riots; there could be protests."
At the beginning of July, repeated power cuts during a spell of 40C-plus heat prompted hundreds of residents to vandalize electricity substations in the new city of Gurgaon just outside Delhi. Rioters beat up energy company officials, holding some of them hostage and blocking roads in several parts of the city.
A large minority of those in the blackout zone have never been connected to any grid – just 16.4% of the 100 million people who live in the central-eastern state of Bihar have access to electricity, compared with 96.6% in Punjab in the west.
In order to help balance supply and demand, consumers are required to inform the power distributor of the proposed load. They are supposed to apply for, and pay for, permission to connect the new device, but since this can take a long time and be relatively expensive, the rule is often not observed:
Central Electricity Supply Utility of Orissa (CESU) officers said most of the disruptions are due to damages in the electrical circuits because of undisclosed load. For adding new electrical devices, one can apply to the area junior engineer of the power distributor by paying the security deposits. If one adds an AC using 1 kilo watt power, he would have to make a security deposit of Rs 432 and so on, Sinha explained…
…CESU sources estimated that the undeclared load has gone up by around 20 per cent in the past few days. "This is because hundreds of air-conditioners and air coolers were installed by people to get respite from the scorching heat. However, very few people had actually announced these additions," said CESU spokesman Golak Bihari Sahoo.
Electricity connections are financially out of reach of many, notably the many residents of India’s teeming slums.
Sprawling industries and emerging urban lifestyles in Ahmedabad enfolds in itself a dark and morbid life of scarcity, filth and deprivation. Nearly 41 per cent of people in the city live in slums.
There are 792 slums spread all across the city. Migrants from Rajasthan, Maharashtra and Madhya Pradesh who come in search of a livelihood also live here. But the majority comprises scheduled castes and scheduled tribes. A good percentage of migrants from Bengal and Bangladesh is also seen…
…"We have to pay Rs 750 for the connection and an additional Rs 250 to fix the metre box. Every month we get a bill of Rs 150-200. We cannot afford to pay more than Rs 1,000 for a connection," said Gita Rabari, a slum-dweller of Baba Ramdev Nagar of Chandloda slums in Isanpur.
This does not necessarily mean that slum dwellers do not have electricity, but that ‘unofficial’ power connections are incredibly common.
A one-room slum hut next to the nahalla, the foetid, drainage canal which runs past the cremation pyres near Nizamuddin, costs about 500 rupees rent a month, usually paid to the local gangsters.
The slums around my place usually have electricity, illegal of course. Every electricity post is rigged with hundreds of wires leading down into the slum dwellings, and because of this illegal tapping (local garment shops and factories also do it) Delhi is cursed with power black-outs. Twice a day, for up to six hours at a time, in 111 degree [Fahrenheit] heat, my electricity goes. The poor suffer, while the rich in New Delhi crank up their noisy generators to charge their ceiling fans and fridges.
Power theft is not just an individual matter. It is also a means for small slum businesses to supplement their meagre income:
With nearly 25 per cent of the slums not having electricity, slum-dwellers have resorted to stealing it from those who have installed metres. There are also ‘dealers’ who illegally supply electricity to houses.
"My paan shop hardly provides me with any money. Therefore, I supply electricity to houses. I get the wire connections from an electricity metre in the neighborhood. Five to six houses can get electricity from one wire in just Rs 150," claimed Raju.
Power theft has become a way of life. It is simple, low cost, and makes an enormous difference to the quality of life of those at the base of the economic pyramid:
Electricity theft is also part of the problem, but simply identifying the problem as "theft"—as many do—rather than recognizing that people deserve access to electricity, minimizes the social and economic reasons that drive people to frustration to the point where they feel they have a right to steal power from the grid.
Despite massive loans, debt, and the poorest paying for the power with their land or their lives, one-third of India’s households do not have enough electricity to power a light bulb, according to last year’s census. And so they steal it. And in stealing it, they increase energy inefficiency, by often grounding the wire they have hooked up illegally to the grid in the soil, thereby losing more power.
In this June 13 file photo, an electrical linesman repairs cables in the middle of a spider web of illegal subsidiary wires around the main cables in Allahabad, India. Stealing of power is a frequent phenomenon in Indian towns. AP Photo by Rajesh Kumar Singh
With such strong incentives, it is no surprise that the practice is endemic:
How can you live on a few dollars a day? Well, it helps a little if your electricity is free. For slum dwellers in Rohini, a residential district in North West Delhi, power theft is almost a way of life. There’s little or no effort to hide it, and the method is simplicity itself: just find the nearest overhead power cable, sling a metal hook over it, then run a wire from the hook to the home. The result: an illegal supply of free electricity that lasts until inspectors from the local power utility stage one of their periodic raids. And when that happens, people simply all wait for a few hours until the inspectors have gone before reconnecting.
The evidence for this is there for all to see. Across a main road from the slum is a line of pylons carrying mains electricity cables. As well as the thick wires they are supposed to be supporting, most of the pylons have dense tangles of other much smaller wires sprouting off in different directions. The proliferation of connections makes the pylons look a little like over-decorated Christmas trees.
These little wires run across the road siphoning off power from the transmission lines to homes and businesses located in the slum, which is a maze of little alleyways with children and animals running around. Most households here seem to have an illegal connection to the grid. In many instances there are several unauthorized connections – and on occasion a legal one as well…
…Although Delhi has been dubbed the power theft capital of the world, the situation in other parts of India is little better. There are no hard figures, but the best estimate is that somewhere between a third and half of the country’s electricity supply is unpaid for. No other country suffers revenue losses on this scale.
It is not just the very poor who do not pay. Power theft is far more extensive than that. The inability, or unwillingness, to pay for supply means that improvements to the system are very difficult to finance.
Slum dwellers’ unofficial hook-ups are the most visible sign of India’s power theft crisis, but there are yet bigger problems dogging the country’s energy sector. Meter tampering by middle class households seeking to pay less than they should costs still more, says Sangeta Robinson, an official with local utility North Delhi Power Limited, a subsidiary of energy giant Tata Power. And yet another huge loss – albeit one which no-one can quantify – is electricity theft by industrial enterprises.
Giresh Sant, who works for an NGO called Prayas campaigning for more efficient and accountable government, says the problem is one of corruption – and a vested electoral interest in turning a blind eye. No-one likes paying their utility bills, he says, so often politicians regard laxness about revenue collection as a vote-winner. And opportunities for personal enrichment through corruption related to industrial power theft have given them, as well as civil servants and utility officials, further incentives not to rock the boat.
The political aspect is most acute in rural areas, where the larger-scale farming operations are collectively influential:
At least 20% of India’s power is consumed by farmers’ irrigation systems. Frequently they either get free power or pay low set charges that bear no relation to the amount of electricity used. The powerful farmers’ lobby is hard for politicians to ignore in country where a majority of the population still makes its living from agriculture.
The task of removing illegal connections often seems insurmountable:
A tired man with a thin mustache, Seth is one of the many people fighting block-by-block to clean up the system. It’s an unenviable task. If Sisyphus had been Indian, his sentence might have been to unsnarl the boulder-sized knots of wire that hang from every electric pole.
Many Indians have a long-standing reluctance to pay for power, dating back to the era when the state controlled nearly the entire economy, including the energy sector, and securing a legal power connection could take a lifetime.
Pervasive corruption acts as a barrier to change at every level of power system operation:
Corruption certainly has played a role in India’s power failures for decades. At every step in the supply chain, money is siphoned off, resulting in a shoddy system– from backup systems to warning systems to good cables. Currently, good cables intended for transmission get sold and shoddy materials put in their place.
It would be a herculean task to reform the power sector into anything remotely resembling what the developed world is used to.
Blackouts – Planned and Unplanned
The July 30th blackout appears to have begun in Agra, Uttar Pradesh. The transmission lines were apparently carrying twice the permitted load. When the Agra-Gwalior line went down, the effect was a cascade, with lines tripping one after the other.
The current prevailing theory is that the outage started with an internal failure in a power line in Agra, removing significant generating capacity from the grid. This event should have triggered an immediate order to all states on the grid to shed load, or intentionally reduce power delivery to their consumers. By the time this order was given, however, most other generators on the grid had already dropped frequency due to the load demand being greater than what they could generate. This happened as no regions shed load and the rest of the generators were struggling to cover for the lost power on the failed Agra line. Before anyone could react, the whole northern grid had collapsed.
The impact was considerable. People were trapped in the metro or stranded at stations, with electric trains unable to move and blocking the movement of diesel trains. Massive traffic jams formed in New Delhi as traffic lights went out. Electric crematoria ceased to function. Hundreds of miners were trapped underground. Water supply was heavily impacted. Some hospitals faced major difficulties in the following days:
Generators require fuel, which can be scarce during a blackout. The Wall Street Journal reported on Tuesday that at a major hospital in Gurgaon, the backup generators failed after prolonged use. This forced nurses to manually operate life-saving equipment such as ventilators for about 15 patients. "We were lucky that no lives were lost," a senior doctor said. "The generators came back up in about 20 minutes."
Out-patients also struggled:
Among those affected by the outage was 62-year-old Pramitha Devi, who was bidding to take the metro toward Ram Manohar Lohia hospital in New Delhi after her home dialysis machine was damaged by electricity fluctuations. A doctor who identified himself as R.C. Bhargava said the hospital’s generators had not been fully refueled since the July 30 grid collapse, leaving them with about two hours of electricity for the intensive care unit. "We have to make plans to shift critical patients to other hospitals," said Bhargava.
In India, the issue is not whether or not there will be blackouts. People know that there will be, often for several hours every day. They prepare for outages and take them in stride:
When I was growing up in Delhi, we were well accustomed to daily summer power outages, euphemistically called "load shedding." These blackouts were regularly scheduled every evening and often created an atmosphere of genial neighborly fun — people out on terraces enjoying cold drinks, talking with neighbors over walls, taking walks, kids playing in the street — and they didn’t seem particularly inconvenient. But all that was another time and a far cry from the catastrophic two-day power crisis that India experienced earlier this week.
The distinction that matters is between planned and unplanned outages. Planned outages are called rolling blackouts:
A rolling blackout, also referred to as load shedding, is an intentionally engineered electrical power shutdown where electricity delivery is stopped for non-overlapping periods of time over geographical regions. Rolling blackouts are a last-resort measure used by an electric utility company to avoid a total blackout of the power system. They are usually in response to a situation where the demand for electricity exceeds the power supply capability of the network. Rolling blackouts may be localized to a specific part of the electricity network or may be more widespread and affect entire countries and continents. Rolling blackouts generally result from two causes: insufficient generation capacity or inadequate transmission infrastructure to deliver sufficient power to the area where it is needed.
Rolling blackouts are a common or even a normal daily event in many developing countries where electricity generation capacity is underfunded or infrastructure is poorly managed. Rolling blackouts in developed countries are rare because demand is accurately forecasted, adequate infrastructure investment is scheduled and networks are well managed; such events are considered an unacceptable failure of planning and can cause significant political damage to responsible governments. In well managed under-capacity systems blackouts are scheduled in advance and advertised to allow people to work around them but in most cases they happen without warning, typically whenever the transmission frequency falls below the ‘safe’ limit.
Where outages are scheduled, people adjust their activities accordingly. However, unscheduled blackouts, or outages much longer than scheduled, cause public resentment. Disruption is tolerated, so long as it is organized disruption.
Unscheduled power outages are back to haunt citizens of Greater Hyderabad…
…"Central Power Distribution Company Limited (CPDCL) officials have suddenly started implementing three-hour power shutdowns without giving any schedule. We will be prepared for power cuts if the schedule is announced," A Chandrasekhar, an IT consultant and resident of Habsiguda, told TOI.
Several residents complain power cuts were beginning as early as 6 am. Office goers and students are being put to inconvenience, affecting their daily chores in the morning due to the outages.
"There was no power in my area for more than an hour in the morning. We were not prepared as the power cut starts at 9 am. With this, we could not fill our water tank and got delayed to office," ASR Murthy, an IT employee and resident of Srinagar Colony, said.
Potential solutions exist to the organizational problem, if not to the mismatch between electricity supply and demand.
"CPDCL has data of mobile phones of about 12 lakh [1.2 million] consumers in the city. They should at least inform citizens about power interruptions through SMSs on a day-to-day basis so that people can plan their chores accordingly," M Uday Kumar, a resident of Kushaiguda, said.
Indian businesses and household compensate for the inevitable power cuts with generators, fuel supplies, renewable generation and inverters, and battery banks for power storage. The elements of redundancy – alternative means to achieve the same essential function – have endowed the system with flexibility and resilience. It comes at a cost however, for the equipment and for expensive generator fuel. This provides business opportunities for those who facilitate independent generation:
Microtek, an Indian company that specializes in selling power backup inverters, claims to have 100 million "satisfied customers."
"Every year in the summer months demand peaks and there are power failures, so most middle-class families purchase an inverter. That’s why we’re in business," said Manoj Jain, vice president at Microtek.
To be able to afford this, one must be relatively wealthy. Otherwise, inconveniences and the discomfort of sweltering temperatures without cooling must be endured.
Ironically, the super-rich generally do not bother, as their power supplies are far more secure. They are therefore more exposed to large scale unplanned disruptions than the middle class.
In the centre of Delhi, one of the world’s biggest, dirtiest, noisiest cities, is an island of calm. Here, government ministers live in vast, state-owned villas; judges, generals and senior bureaucrats walk their dogs across well-watered lawns as servants scrub their government cars; top politicians confer in compounds and the wives of unimaginably wealthy industrialists hold lunch parties catered by top chefs. You live here and visit India.
Last week, India visited this island in the shape of a giant power cut.
Such outages are a daily occurrence for the rest of the population – or at least the two-thirds of India’s 1.2bn inhabitants who actually have any electricity supply. But they are not for India’s elite. For the latter, power guarantees power. The bureaucrats in charge of Delhi’s grids switch off the supply to hospitals before they plunge the homes of top politicians into darkness. But this time the lights did go off. And so the residents of the most upmarket parts of the city – so confident of their power supplies that they do not have generators – had to sit in the fetid monsoon temperatures of 35 degrees [Celsius] like everyone else.
Impact on Development and Obstacles to Improvement
The unreliability of electricity supply has a significant impact on economic development, as it decreases productivity and increases cost substantially. In addition to supplying back up power, companies may have to arrange alternate water supplies or alternate employee transportation.
There are often equipment compromises that have to be made, and this has knock-on effects on operations. Businesses are often equipped to cope with intermittent power, but are worried about competitiveness and investment.
Work making potato chip display racks at Jayraj Kumar’s factory barely paused when much of India’s power grid collapsed. The backup generators kicked in automatically and the electric saws, presses and welding machines kept running, just like they do during the five-hour power cuts the factory in suburban Delhi suffers nearly every day.
India’s unreliable power system has forced businesses to create a workaround electricity system of noisy, dirty diesel generators that prepared them well when the world’s worst blackout hit the country Tuesday. But the trouble has also vastly increased businesses’s expenses, dragged down their productivity and hampered economic growth in the country. "Running a factory is very tough here," Kumar said…
…Kumar, 56, started his business turning metal wire into display racks 23 years ago with just three employees. Now his company, The Rhino, runs a factory of 200 workers that churns out 1,500 red racks a day for clients from PepsiCo to Nestle that are ubiquitous in markets across India.
When the company opened its new factory in this Delhi suburb three years ago, "we knew that power would be a problem," he said. "From the very first day, whenever we start an office or factory we immediately think of having a decent power backup," he said.
Behind the cavernous whitewashed factory, lined with workers operating spot welding machines and kicking up sparks as they saw through metal, stands a large, green 80 megawatt generator on a brick foundation. In a corner on the ground floor is another generator rigged with a truck ignition that starts with a belch of gray smoke. Nearby, two more generators are hooked up, and, taking no chances, Kumar bought a fifth one Wednesday.
The factory runs 16 hours a day, at least five of them on generator power, he said. This backup system comes at a huge price for Kumar’s business. "Generators are meant for emergencies, they aren’t meant for production purposes," he said.
Each generator costs 1 million rupees ($18,000) and has to be replaced every three years. The four full-time generator operators cost him another 1.2 million rupees ($21,600) in salaries. He pays 4 million rupees ($72,000) in diesel bills. In all, he estimates the generator power costs him 10 times as much per unit as the grid power and adds 20 percent to his overall costs.
And the fluctuating voltage from the generators wreaks havoc with his equipment. The welding and grinding machines work unpredictably on generator power, vastly slowing down production and reducing the quality of his racks. He is forced to pay an extra 6 million rupees ($108,000) to repair equipment the unstable voltage damages every year. "You cannot plan your production, your commitments are gone," Kumar said.
He must use the most basic, labor intensive machines, because generator power would destroy computerized equipment. When he tempted fate by importing two 5 million rupee ($90,000) machines that printed large format ads to adorn the racks, they both stopped working within a week, he said. He can’t export his products because their quality is too low, but he can’t get the machines that would make them better either, he said. With reliable power, he would instantly increase his output by 30 to 40 percent, he said.
His work in China has left him jealous of the infrastructure there. Smaller countries such as Vietnam and the Philippines have surpassed India and he laughed about a one-minute power outage he once experienced in Singapore that turned into a major news story.
The massive blackout has brought India’s power supply problems to far greater attention:
While India created dubious history on Tuesday with the world’s largest blackout, its $100-billion software and services sector managed to keep its lights and links with clients on by drawing power from diesel gensets. But not before India’s image as a premier investment destination for technology was called into question by jittery clients worried about the ability of companies to provide uninterrupted services.
"The blackout has impacted the perception of India at a country level. India’s image has taken a beating," said Som Mittal, president of IT trade body Nasscom.
A number of factors have rendered increasing supply problematic. Apart from the endemic corruption that complicates every transaction and adds cost at every turn, there has also been political infighting, with the power system used as a political football:
Lack of political will coupled with successive governments’ short sightedness has cost the country dearly in terms of implementing several projects. For example, in 2008, the energy infrastructure company Reliance had proposed to build an 8 gigawatt (GW) natural gas power plant. The political party in power at the time allowed the company to acquire the land in Dadri, Uttar Pradesh, for power plant construction after compensation was given to land owners and farmers. When the opposition party came into power in the next session, political rivalry triggered biases and this land was declared disputed. Reliance lost the case in Supreme Court and construction of the plant has now been shutdown. This plant could have been instrumental in reducing the daily power cuts utilities make in and around Uttar Pradesh.
In addition, higher costs are being imposed for access to land for the construction of new generation:
The interest rate on government land loans has increased from 9 percent in 2010 to 14.5 percent in 2011. This increase in land loan interest rates has made it less feasible for private firms to invest in power plants. Higher land costs increase the amount of initial capital needed, and the impact can be seen in the form of increased electricity costs and lower returns for utilities.
Troubled international relations also aggravate attempts to broaden fuel supply options and reduce fuel constraints:
India’s relations with certain neighboring countries have hindered the development of its power sector, as seen in the case of the Iran-Pakistan-India Pipeline. India has considered various proposals for international pipeline connections with other countries. One such scheme is the Iran-Pakistan-India (IPI) Pipeline, which has been under discussion since 1994. The plan calls for a roughly 1,700-mile, 5.4-Bcf/d (billion cubic feet per day) pipeline to run from the South Pars fields in Iran to the Indian state of Gujarat. While Iran is keen to export its abundant natural gas resources and India is in search of ways to meet its growing energy demand, a variety of economic and political issues have delayed the project agreement. Indian officials have made it clear that any import pipeline crossing Pakistan would need to be accompanied by a security guarantee from officials in Islamabad.
India’s rapid growth rate – 8% per year in recent years – leads to projections that $300 billion will need to be spent on new generating capacity and new transmission and distribution infrastructure over the next 25 years in order to meet demand. Of course, given the impact of the global financial bubble bursting, those growth projections are highly unrealistic. However, capital scarcity in a period of economic depression is likely to mean investment drying up and problems becoming far worse before there may be any chance of improvement.
Attempting to Regularize Power System Operations
One area where some tentative progress is being made towards getting supply and demand more closely aligned, at least in places, is in addressing power theft. Despite the seemingly overwhelming scope of the problem, programmes of sticks and (at least a few) carrots are showing some signs of beginning to regularize operations. The 2003 Electricity Act specifically criminalized power theft for the first time, and established enforcement mechanisms including special courts and specialist police stations dedicated to tackling the issue. Monitoring systems are beginning to be built in order to provide for auditing and accounting of supply and demand, so that the scale of the problem can be quantified.
State authorities are increasingly attempting to target the impact of load shedding on the perpetrators of power theft, rather than using the blunt instrument of citywide rolling blackouts:
The state government will rationalize load-shedding by cutting power supply to those who do not pay their bills on time. At present, an entire city has to put up with power cuts because of a few defaulters. In the new system, consumers who pay their bills regularly will get power while those who default on payments will face cuts.
In the new system, consumers will be segregated feeder-wise. Normally, each feeder supplies power to 100 to 600 consumers. Those drawing power from a feeder with a distribution and commercial loss of 33% and above will face power cuts in cities. In case of rural areas, distribution and commercial losses of 37% and above will attract power cuts. This means that only a certain set of consumers within a city or a town will face power cuts while those in neighbouring areas will be spared.
Currently load-shedding is carried out on the basis of the group (A, B,C,D,E and F) a city or a town has been placed in depending on its distribution and commercial losses. The new system, by factoring in losses at the feeder-level, will see power cuts being affected at the micro level.
Villages where power theft is rampant are also being threatened with outages, despite the power of the rural lobby.
The Maharashtra State Electricity Board (MSEB) has decided to implement around 11 hours of load shedding in the villages of Sathpati, Umrole and Manor, which has reported a loss of over 50 per cent of power generated…
…Sathpati village is likely to be affected the most due to the load shedding as it is from here that fishermen export their catch. The fishing jetty has around 550 boats which depend on ice for storage of fish. Fishermen fear that lack of electricity will affect the manufacture of ice and storage of fish. The daily requirement of ice for the fishermen of the village is around 350 tonnes. With the fishing activity discontinued during monsoon, a large quantity of fish caught during the past week has been kept in cold storage for export. Fishermen are worried as load shedding may lead to rotting of the fish.
MSEB officials say that there are over 5,000 consumers in the three villages but most of them enjoy zero billing. Stolen power is used by the villagers to organize night cricket matches and other sports. Festivals and marriages also largely function on stolen electricity. The electricity board has already fined seven customers for power theft and recovered Rs 57,000 from them. The load shedding, say officials, will continue till the power theft is minimized.
The idea of privatization is gaining traction, on the grounds that this may improve management and lead to greater cash flow, which could fund improvements to the system. The two largest private power companies (Tata Power and Reliance Energy) have been given control of electricity supply in the Delhi area, and claim to have limited losses through a combination of pursuing legal action, ‘educating people about the merits of paying for power’, and offering small financial incentives.
Through dozens of power raids every week, among other strategies, they have managed to dramatically reduce theft in Delhi. BSES, the Reliance subsidiary that handles two-thirds of Delhi’s power, has sent more than 650 people to prison and booked more than 114,000 cases in special courts that handle only electricity cases. By the end of last year, BSES…..had cut theft from around 52 percent in 2002 to 28 percent. They want to bring that down to 10 percent.
Tata Power is offering slum-dwellers enough electricity for lights and a fan for a fixed price of 179 rupees ($4; £2.30) a month. This does not sound like much, but considering that it amounts to probably almost half the monthly rent for a person living in such an area, the cost is still very high relative to ability to pay.
International aid programmes are bringing some funding to bear on slum connections, but the scope of such projects could hardly be described as ambitious in comparison with the scale of the problem:
Reliance Infrastructure, the Global Partnership on Output-Based Aid (GPOBA), and other partners have launched a project to provide improved access to safe electricity supply to around 104,000 Indian slum dwellers. The GPOBA Improved Electricity Access to Indian Slum Dwellers project aims to provide up to 26,250 new and upgraded electricity connections for residents of the Shivajinagar slum in Mumbai. About 8,000-12,000 new connections and 5,000 upgraded connections are planned in a first phase expected to be completed by 2011.
Currently, many slum households in Mumbai do not have access to safe and reliable electricity. The challenge is that there is no support beyond the regulated point of supply (the metering point). Arrangements are informal and the lack of an institutional framework to support the financing of connections for the poorest leads to bottlenecks in connection investment. The relatively high upfront costs of the connection, which are estimated to be in the region of US$105 per connection, also act as a significant constraint.
Under the GPOBA scheme, households will pay less than half the connection cost, with GPOBA providing a one-off subsidy to make up the difference. Payment of 90 percent of this subsidy will be conditional upon independent verification of working connections and of six months’ supply and billing. The connection work (wiring from the meter to the house and internal wiring) will be carried out by licensed electricity contractors chosen directly by the customers. The scheme offers a framework not just for performance-based subsidies, but also for community awareness building, training of electricity contractors, and a check on quality of service to the hutment.
"The Mumbai slum electrification scheme presents an opportunity to understand how output-based aid can be used to supply basic services in areas beyond the regulated utilities’ responsibility," explains Mustafa Zakir Hussain, GPOBA and World Bank task manager for the project. The GPOBA project, financed through a US$1.65 million grant, forms a financing window in a larger Slum Electrification and Loss Reduction program, led by the US Agency for International Development (USAID) in cooperation with the International Copper Promotion Council (India) or ICPCI.
The project targets approximately 100,000 slum dwellers of the six million in Mumbai alone – over 50% of the population. At this rate, progress will not be rapid, and it will remain difficult to combat unofficial connections when legal ones are still expensive and can take months to arrange.
While government officials are trying to convince the illegal electricity suppliers to get metres provided by the municipal corporation, the slow process of getting electricity after filling up the application form puts off many.
"I had applied for electricity months back. I own a shop. They are asking us to pay Rs 3,600 to get a connection for commercial usage," said Bharat Thakore, a paan shop owner in Chandlodia slum.
"We are planning to appoint an individual from the slum itself who can take our applications in bulk and give them to the municipal corporation. This will fasten [hasten]the long awaited process of getting electricity. When we are ready for legal connections, we are being asked for more money," said Thakore.
Residents are typically not optimistic about the prospects for improvement:
Citizens of Gurgaon, often dubbed the millennium city, told NDTV that the power shortage and lack of water have been a major hit to the city.
What’s more, the residents said that this isn’t at all unusual for them. One male resident said on average they have 10 – 11 hour power cuts when they have to rely on generators and tankers to supply them with water. One resident said its was "hell to live" there, while another said "If you want a millennium city go to Hong Kong."
India’s Power Future
India’s power system problems are part of a much larger crisis of decrepit infrastructure, unable to be repaired thanks to lack of funds and lack of political will to tackle endemic corruption. Moving forward will be difficult, and, even without a looming global financial emergency, it would take decades to construct a power system recognizable in the developed world. By the time it could hypothetically have been accomplished, fuel shortages would have become far more acute than they are today, as the world would be well past the peak of the hydrocarbon age.
It seems that a modern grid serving the whole population reliably and seamlessly will remain a pipe-dream. The future of power in India is far more likely to involve something much less ambitious, but also arguably far more appropriate for an energy and capital constrained era rife with uncertainty and unrest. Given its complexity, the ‘ideal’ central station power grid will be difficult to maintain anywhere under such circumstances, very much including the developed world. Rather than aspiring to reach an unattainable goal, it may well be better to design a simpler and more decentralized system based on micro-grids, and designed to deliver basic needs, rather than wants. Decentralized systems may be less efficient, in that one sacrifices economies of scale, but they are also more resilient, and that will be critical.
Private power alternatives are likely to flourish to an even greater extent than they already do, at least where liquidity remains available, as power system problems become even more acute in the future. The industry is being unbundled, with generation, transmission and distribution being separated, as they have been in many places that have pursued liberalization of the industry. Generation in particular has seen increasing private investment, to the point where it accounts for about a quarter of capacity.
India has set its sights on renewables, with an ambitious target of 15% of energy requirements from renewable sources by 2020:
India’s Solar Mission aims to generate 20,000 MW of solar power and deploy 20 million solar lighting systems for rural areas by 2022. This tremendous scale-up is expected to drive down costs rapidly so as to achieve grid parity in that time frame. A key enabling policy for this is a Renewable Purchase Obligation (RPO) requiring state energy providers to buy a certain percentage of their energy from renewable sources, including a carve-out for solar specifically. There are also significant opportunities for improved energy efficiency.
One interesting application of solar photovoltaics is to use solar panels to cover irrigation channels for agriculture. This not only generates a significant quantity of electricity, but also reduces evaporation from the open channel, thereby easing water shortages. The potential benefits are considerable, although this remains a large-scale, top-down, expensive and technologically complex approach, which is unlikely to be the best means for India to proceed over the longer term. (See for instance this TED talk on the ancient art of water harvesting in India for an example of more appropriate traditional technology that is far more sustainable.)
This solar panel laid on the vast stretches of agricultural channels in Gujarat generates 1 MW of electricity per KM & prevents evaporation of 1 crore [10,000,000] litres of water every year
Many argue for a system of feed-in tariffs – premium payments for renewable power fed into the grid – which have been successful in delivering so much renewable generation in various European countries, notably Germany:
Ironically, one region that did well during the power crisis in India was Jodhpur, where, after a brief interruption, the windmills kept hospitals and households powered up while the rest of the country went black. Were the World Bank to have pushed a model, such as that successfully employed in Germany and other countries, where a "feed-in tariff"—a guaranteed rate of payment for energy fed into the national grid– for renewable energy had been put in place, small farmers and others in rural areas would be able to both provide power to the grid and earn money in doing so.
But instead, they foisted on the largest democracy a neoliberal model—where unions were busted, power was privatized, people were treated like pawns on a giant chess board, while they targeted the affluent and heavy industries first for energy delivery using some of the most environmentally destructive energy resources on the planet. The assumption: energy services would eventually trickle down to the poor. Nearly two decades later, after billions in investment, one-tenth of the world sits in the dark, the planet is rapidly heating up, and the only thing trickling down to the poor is contaminated water or, if they’re lucky, enough water to keep their parched crops alive.
While wind power can be very useful, it is not a panacea. While it may have helped in the recent blackout, and clearly helps at other times, dependency on intermittent power can also contribute to the problem of unscheduled load shedding when the energy source is not available:
K. Kathirmathiyon, secretary of Coimbatore Consumer Cause, says the problem of unscheduled power cut has arisen because the State is heavily dependent on wind power during the windy season. TANGEDCO officials say that on most of the days the load shedding in an area is according to a schedule, though it is not yet announced. There is no load shedding or it is for a shorter duration when the wind energy generation goes up.
Unfortunately, India is not Germany. The existing power hierarchy and the pervasive corruption would make implementing such a system very difficult. But more significantly, feed-in tariffs around the world are very likely to be cut back or abandoned in a global financial crisis, even in the locations where they have been very successful. In fact this is already occurring, as we discussed here at TAE in The Receding Horizons of Renewable Energy. This will leave people who have borrowed money in order to build large projects without the income stream needed to service the debt incurred to do it. Trusting government promises to pay for 20 years are risky at the best of times and in the least corrupt of places.
The other objection to this approach to utilizing renewable power is that the requirement to feed into expensive and complex infrastructure greatly reduces the energy returned on energy invested (EROEI) of what is already a low EROEI energy source. As with all such sources, the energy profit ratio is too low to sustain a society complex enough to produce them in the longer term. Renewable power is a misnomer, since the materials required to harvest it are not themselves renewable, and the ability to build and maintain the infrastructure depends heavily on the continued availability of high EROEI energy sources. However, it can be used to make a huge difference to people’s lives, and it will make a larger difference for a longer time at much lower cost if it is implemented in such as way as to maximize the EROEI by minimizing the requirement for extraneous infrastructure.
Embracing a simpler future before being forced to do so by circumstance could allow a country like India to avoid a great deal of expense, keep to a human scale where much of the impact of corruption could perhaps be avoided and provide basic services for far more people. Unfortunately, this approach is highly unlikely. It feeds neither the demands of the wealthy for developed-world level electricity services, nor the appetite of the corruption machine for large-scale projects where funds can be spun off in the direction of the well connected. India is therefore likely to see greater attempts to improve service for those who can pay, and to remove service to those who cannot.
Some experts are more hopeful than in the past because a number of Indian officials have made politically difficult decisions in recent months to raise electricity prices. State governments in Tamil Nadu, West Bengal, Rajasthan and Punjab have moved to stem losses at public utilities that had been selling power for far less than it costs them to buy it. Besides providing more money to invest in additional supply, the higher prices for consumers and businesses should also help lower demand for power.
"I think everybody has realized that there are no free lunches," said Chandan Roy, a former director at India’s largest state-owned power producer, the National Thermal Power Corporation.
India Versus Developed Country Power Systems
Power systems in developed countries do not face the obstacles of fuel shortages, supply /demand imbalance and corruption faced in India. Despite aging infrastructure, and underinvestment that will store up problems in the future, the systems presently have sufficient integrity to allow for good control over power quality parameters. Equipment is not damaged by power surges or brownouts. Electricity supply is reliable and stable. This has been the case for so long, that it is taken utterly for granted. An indicator of just how reliable power supply has become was provided when a 1994 earthquake temporarily knocked out power in Los Angeles:
Now we have so much artificial light that after a 1994 earthquake knocked out power, some concerned residents of Los Angeles called the police to report a "giant, silvery cloud" in the sky above them. It was the Milky Way. They had never seen it before.
Very few provide for back ups, as these would almost always be seen as an unnecessary expense. Private safety margins are few, hence resilience of the larger system is much reduced. Rare interruptions to supply therefore cause difficulties, and can rapidly lead to public anger. Access to however much electricity one could want, whenever one might happen to want it, and at an affordable price is seen as an entitlement, or even as a basic human right. The structural dependency on electricity supply has increased to the point where it has become a life support system in many ways. Without it, the technology traps will close very quickly. Witness the effects of a 2011 incident in California:
"Electricity was primarily a luxury when the majority of our grid was built 50, 60 years ago. Most people didn’t require computers to do their jobs every day. They didn’t need the Internet access. IPhones didn’t need to be charged, and communication was all hard-wired, so you could still make a phone call when the electricity was out."…
…Schools closed, planes were grounded for hours, traffic lights went dark and gridlock followed. People were trapped on rides and in elevators at SeaWorld and Legoland. Pumps failed at water-treatment plants, flooding San Diego Bay with more than 2.5 million gallons of raw sewage and forcing beaches along the coast to close.
What an investigating commission later called a "cascading and uncontrolled" shutdown became the most extensive power outage in California history.
This is a dangerous situation. The dependency is so much greater in western societies, that cascading system failure is a significant possibility if the grid were to experience a major disruption. Underinvestment is chronic, and this is storing up many challenges for a future when the money needed may not be available. As in India, no one wants to pay for the means to preserve the grid current capacities:
No one is taking care of the grid — the network of transmission lines, interconnectors and transformers that is essential to life as we know it; two, supply cannot keep up with demand; and three, rate-setting is a political rather than an economic process. It should not come as a shock, so to speak, that neglect, failure to prepare and playing politics with essentials should lead to disaster…
…No less than the American Society of Civil Engineers said in a report released in April that the grid could break down by 2020 unless investment in it is increased immediately by about one billion dollars a year. Why so much? Because, according to the report, more than two-thirds of the system’s transmission lines and power transformers are at least 25 years old, and 60 percent of the circuit breakers have been in use for more than 30 years.
Investment of the massive size required would require increased rates for electricity, and that simply is not going to happen in a political climate where people are not expected to have to pay for anything; not their government (no new taxes) not their wars (Iraq was "off the books") and certainly not their electricity. Despite being deregulated like many other aspects of economic life pursuant to the Reagan Revolution, electric utilities who raise their rates soon find that deregulation does not extend that far. In Maryland, when it was revealed that moving to market rates would cause Baltimore Gas and Electric to increase rates by 72 per cent, that was the end of deregulation.
In this, as in so many other areas of public life, we are like the ass starving to death because he is equidistant from two bales of hay and can’t decide which way to go. We either have to spend tons of money propping up the old system, or expend tons of effort and thought coming up with a new one. By refusing to do either, we drift faster and faster toward the precipice over which India has just tipped.
The estimated cost of grid renewal is huge:
The American Society of Civil Engineers (ASCE) calculated that an additional investment of $107,5 billion was needed by 2020 to keep the electrical infrastructure whole…
…The utilities walk a fine line between satisfying their customers and keeping their investors happy, with costly expenditures in infrastructure bound to hurt profitability unless public utility commissions allow rates to keep pace with investment…
…"By 2020, the cost of service interruptions will be $71,5 billion, or, if you break that down to households, $565 over that period," Andrew W. Herrmann, president of ASCE, said
As we move further into financial crisis with the bursting of the global credit bubble, it will become more and more difficult to fund infrastructure investment, and we are living on borrowed time as it is. We have already been coasting on past infrastructure investments for a long time. As India demonstrates, even truly decrepit infrastructure can function much of the time, so we are not yet at all close to risking any kind of permanent blackout scenario. However, India also demonstrates that compromised infrastructure does not deliver reliable power, and western economies have a much stronger dependency on constant power availability.
The central station model of electricity supply, with large power plants distant from demand feeding into a transmission grid, is under threat worldwide. In a capital and energy constrained environment, it will not be able to deliver what we have become accustomed to. The greater the extent of dependency, the greater we can expect the impact to be. We in the developed world, as in India, should consider looking to simpler, cheaper, more decentralized models. And we should be getting our expectations in line with what reality can hope to deliver. We are going to have to live within our means, and that will involve a much larger adjustment than most of us can currently imagine.
Statistics: Posted by yoda — Sun Aug 19, 2012 7:55 am
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When They Come For Your Guns, You Will Turn Them Over
By Jim Karger Aug 1st, 2012
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the US government is going to take their firearms.
And, when I hear this crazy talk, I agree with them openly. “You are right. They will pry your gun from your cold dead hands,” which I often follow with the question, “And where will that leave you except face down in a pool of your own blood the middle of the street, just another dead fool resisting the State?”
This is not a question they are comfortable with, if only because the intent of their saber-rattling was to imply they would fight to keep their weapons, and win.
Nice fantasy. It’s not happening.
If the federal government decides to disarm the public, and one of these (see photo below) rolls down your street after a not-so-subtle request that you kindly turn over your firearms and ammunition “for the common good,” it will be nothing less than suicide by cop to do anything other than what you are told.
The militarization of US police forces is ongoing and escalating. Many cities and towns now own tanks, armed personnel carriers, even attack helicopters, and almost all are outfitted with military weapons not available to the general public.
And, it is not just your hometown cops who are getting new boy-toys. The military itself is buying up weaponry not just for use in the current or next scheduled war, but to deal with the likes of you, citizens who don’t seem to understand that the Bill of Rights has been overruled, and that specifically includes, but is not limited to, the right to protest and engage in civil disobedience.
Also ignored (as if it didn’t even exist) is the Posse Comitatus Act of 1878 which generally bars the military from law enforcement activities within the United States.
According to Public Intelligence:
“…for the last two years, the President’s Budget Submissions for the Department of Defense have included purchases of a significant amount of combat equipment, including armored vehicles, helicopters and even artillery, under an obscure section of the FY2008 National Defense Authorization Act (NDAA) for the purposes of “homeland defense missions, domestic emergency responses, and providing military support to civil authorities.” Items purchased under the section include combat vehicles, tanks, helicopters, artillery, mortar systems, missiles, small arms and communications equipment. Justifications for the budget items indicate that many of the purchases are part of routine resupply and maintenance, yet in each case the procurement is cited as being “necessary for use by the active and reserve components of the Armed Forces for homeland defense missions, domestic emergency responses, and providing military support to civil authorities” under section 1815 of the FY 2008 NDAA.” (Emphasis supplied.)
And, they are not just arming cops and weekend warriors for domestic purposes. Active duty Marines are now being trained for law enforcement operations all over the world (of which the US remains a part) specifically to deal with civil uprisings, and the US government knows that civil uprisings are coming to a town near you just as soon as the fantasy of a healing economy is shattered, the US dollar fails, and unemployment goes to 30%+ in real numbers.
And, to you tough-talking Neo-Cons with your AR-15 rifles and a few thousand rounds of ammo, here is reality: they will take your guns, and no, all your Second Amendment bluster aside, you are not going to do anything about it. You are not going to take on a platoon of Marines with state of the art automatic weapons and the best body armor you cannot buy protected by armed personnel carriers and attack helicopters unless you choose to die that day — for nothing.
You will either be in the country or out, and if you are in, you will stay in and you will comply.
That is your choice… for the moment.
Statistics: Posted by yoda — Wed Aug 01, 2012 4:06 pm
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How is money created? If you ask average people on the street this question, most of them have absolutely no idea. This is rather odd, because we all use money constantly. You would think that it would only be natural for all of us to know where it comes from. So where does money come from? A lot of people assume that the federal government creates our money, but that is not the case. If the federal government could just print and spend more money whenever it wanted to, our national debt would be zero. But instead, our national debt is now nearly 16 trillion dollars. So why does our government (or any sovereign government for that matter) have to borrow money from anybody? That is a very good question. The truth is that in theory the U.S. government does not have to borrow a single penny from anyone. But under the Federal Reserve system, the U.S. government has purposely allowed itself to be subjugated to a financial system in which it will be constantly borrowing larger and larger amounts of money. In fact, this is how it works in the vast majority of the countries on the planet at this point. As you will see, this kind of system is not sustainable and the structural problems caused by such a system are at the very heart of our debt problems today.
So where does money come from? In the United States, it comes from the Federal Reserve.
When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.
Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.
The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.
So why does the U.S. government go to all this trouble? Why doesn’t the U.S. government create the money itself?
Those are very good questions.
One of the primary reasons why our system is structured this way is so that wealthy people can get even wealthier by lending money to the U.S. government and other national governments.
For example, last year the U.S. government spent more than 454 billion dollars just on interest on the national debt.
Over the centuries, the ultra-wealthy have found lending to national governments to be a very, very profitable enterprise.
The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.
There is a problem.
Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.
So where will the U.S. government get the money to pay that debt?
Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.
But that never actually happens, does it?
And the creators of the Federal Reserve understood this as well. They understood that the U.S. government would not have enough money to both run the government and service the national debt. They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.
That is why I call the Federal Reserve a perpetual debt machine. The Federal Reserve was created to trap the U.S. government in an endlessly expanding debt spiral from which there is no escape.
And the Federal Reserve is doing a great job at what it was designed to do. Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
Another way that money comes into existence in our economy is through the process of fractional reserve banking.
I originally pulled the following simplified explanation of fractional reserve banking off of the website of the Federal Reserve Bank of New York, but it has been pulled down since then. But I still think it is helpful in understanding the basics of how fractional reserve banking works….
“If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”
When you put your money into the bank, it does not say there. The bank only keeps a relatively small amount of money sitting around to satisfy the withdrawal demands of account holders. If all of us went down to the banks right now and demanded our money, that would create a major problem.
If I put 100 dollars into the bank and the bank lends out 90 of those dollars to you, now it looks like there are 190 dollars floating around. I have “100 dollars” in my bank account and you have “90 dollars” that you just borrowed.
The new debt that you have taken on (90 dollars) has “created” more money. But of course you are going to end up paying back more than 90 dollars to the bank, so more debt has been created than the amount of money that has been created.
And that is one of the big problems with our financial system. It is designed so that the amount of debt and the amount of money are supposed to be perpetually expanding, and the amount of debt created is always greater than the amount of money that is created.
So is it any wonder that our society is swamped with nearly 55 trillion dollars of total debt at this point?
A debt-based financial system is unsustainable by nature because it will always create debt bubbles that will inevitably burst.
Are you starting to see why so many Americans are saying that we need to abolish the Federal Reserve system?
Our founding fathers never intended for our financial system to work this way.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.
So why has this authority been given to a private institution that is dominated by the big Wall Street banks and that has actually argued in court that it is “not an agency” of the federal government?
Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
But instead, we have become enslaved to a system where government borrowing actually creates our money.
The borrower is the servant of the lender, and we have allowed our government to enslave us to the tune of nearly 16 trillion dollars.
There are alternatives to this system. Things do not have to work this way.
Unfortunately, the vast majority of our politicians consider the Federal Reserve to be good for America and steadfastly refuse to do anything to change the status quo.
So if you are waiting for “solutions” to these problems on the national level you are going to be waiting for a very long time.
The debt problems that the United States and Europe are experiencing did not come into existence by accident. They are the result of fundamental structural problems with the financial system.
A debt-based financial system is always going to fail in the long run. Unfortunately, most Americans still do not understand this and so we will all get to suffer the consequences.
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