One wonders what’s going on down in the District of Columbia.  A Democrat President has put on the table what amounts to a reduction in Social Security benefits, although none are necessary.   Purportedly the benefit reductions are needed as part of a ‘grand bargain’ the President seems determined to craft with Republicans, who want to eliminate SS but who are smart enough to never mention such a thing in public.  No doubt in the mid-terms, Republicans will run advertisements about how the Democrats want to reduce SS benefits!!!

Anyway, for my readers edification, if not that of the President, here’s an article by an expert explaining why SS benefit reductions are completely irrelevant to the nation’s economic future.

The People’s Choice for the People’s Pension

By NANCY FOLBRE

Nancy Folbre is an economics professor at the University of Massachusetts, Amherst.

Social Security, the most transparently self-financed program of the federal government, is not increasing our budget deficit. The most recent trustees’ report shows sufficient funds to pay full benefits until 2033.

Today’s Economist

Perspectives from expert contributors.

No one is making out like a bandit: Social Security beneficiaries who retired in 2010 are expected to get back approximately what they paid in.

If we wanted to adopt a cautious policy measure that would eliminate the shortfalls predicted 20 years down the road, we could eliminate the cap on earned income subject to Social Security taxes, currently set at $113,700. Such a measure would lead to increased payments by about the top 5.2 percent of wage earners.

Legislation designed to “scrap the cap” has been introduced in Congress. Senator Mark Begich, Democrat of Alaska, and Representative Ted Deutch, Democrat of Florida, have drafted a law that would require all workers to pay the same overall Social Security tax rate, and Senator Bernie Sanders of Vermont, an independent, and Representative Peter DeFazio, Democrat of Oregon, recently proposed application of the tax to earnings over $250,000 (as well as under $113,700) creating a “doughnut hole” exemption for earners in between in order to win more votes.

President Obama has voiced support for cap elimination or modification proposals in the past.

But as Thomas B. Edsall pointed out in a recent commentary, “scrap the cap” has apparently been taken off the table, despite evidence of considerable public support for it.

Readers doubtful of that public support should read the new National Academy of Social Insurance report, “Strengthening Social Security: What Do Americans Want?,” based on an online survey asking respondents whether they favored or opposed 14 specific changes to Social Security. The analysis also draws on findings from focus groups to add qualitative texture to the quantitative results.

That online survey, an opt-in model, is not based on a probability sample, but its findings echo other representative surveys, including this Quinnipiac University poll from 2011, which found that 56 percent of Americans favored raising the cap on taxable Social Security income.

Readers mystified by the yawning gulf between public opinion and current political discussion might benefit from the background provided in Eric Laursen’s magisterial history, “The People’s Pension: The Struggle to Defend Social Security Since Reagan.” The book offers more than 800 pages of fascinating if gory details about the lobbying efforts and misinformation campaigns aimed at bringing the program down.

It also reports on a series of surveys going back to 1977 in which most respondents said they would be willing to pay higher payroll taxes if that would shore Social Security up for the future.

Mr. Laursen effectively decodes much of the economic jargon that has obscured public understanding of these issues, and continues to blog regularly on this topic.

Readers feeling demoralized by the history of class warfare over social insurance might be cheered by two of the short videos recently entered in an online contest sponsored by the Peter G. Peterson Foundation on the theme of “I’m Ready” to fix the national debt.

In one entry, “Being Honest, Tough Choices,” a serious young man uses his webcam to explain in simple, direct terms why he supports Social Security and deplores the rhetoric of “makers versus takers, young versus old.”

Another entry, originally titled “Scrap the Cap” but currently labeled “Movin’ In, Kids,” has outpaced all others to date in terms of both viewings and ratings. It features some lovable oldsters in a hilarious rap performance warning their son that if their Social Security benefits are cut he better pull out the sofa bed and put out some fresh towels because they will be living together from now on.

Their song and dance goes on to explain why scrapping the cap would be better for everyone concerned.

Beezer here.  To be honest, we’ve often been a bit lost when it comes to understanding President Obama’s obsession over doing deals in Congress with Republicans.   As a former US Senator, maybe that’s the only way the President believes progress is possible.  Unfortunately, right now the Republican Party is so dysfunctional it has literally nothing positive to offer the nation, and doing deals with someone like that is a complete waste of effort.  They are anti-female, anti-minority, anti-immigrant, anti-climate change, anti-clean energy, anti-environmental, anti-education, anti-science and anti-anything government except Defense.  A party this far removed  from the nation’s citizenry needs simply to be ignored until it can be reformed by new blood from within.  Giving it any sustenance by way of compromise is simply prolonging the time needed for it to face the music.  

Five years ago I started writing this blog site because I figured energy dependence on fossil fuels would destroy America.  Nothing I’ve seen since then has changed my attitude in this regard, although initially I didn’t figure in the problems associated with climate change, nor did I fully appreciate the national security implications identified by the Joint Chiefs of Staff in 2012.  The Joint Chiefs basically said relying on fossil fuels is the greatest threat to our national security, and they also said ‘climate change’ essentially changes everything.

And national politics, particularly those surrounding our first President of color, Barack Obama, overwhelmed my desire to explore the energy issues.

As it turns out, now that President Obama has been re-elected, the energy issues are resurfacing as important despite Republican obsessions over dismantling the social safety nets, including Social Security and Medicare that have been major distractions.

Most recently the President has proposed using $2 billion in gas and oil lease revenues to fund basic research and development to find ways to replace hydrocarbons as our primary transportation fuel.   In the larger scheme of things energy, according to a New York Times article, the President is striving to “to build as broad an energy portfolio as possible for the country, with expanded oil and gas development; favorable tax treatment for nonpolluting sources like wind, solar and geothermal energy; loan guarantees for new nuclear plants; increased emphasis on energy efficiency; and research into long-term alternatives to fossil fuels.”

OK fine.  I don’t think nuclear is going anywhere anytime soon, especially since the Japanese tsunami wiped out the Fukushima nuclear power plant in 2011.  And clean coal is a non starter too, although Texas has begun a $2.5 billion ‘test’ project for sequestering carbon dioxide gas from the use of coal for energy by burying it underground.    In both cases, the ideas are non-economic.  They are the most expensive ideas in the portfolio and they need the government to insure unintended consequences because the private markets simply won’t.

The simple fact is that the rest of the world, to the degree it can afford to right now, is moving away from fossil fuel dependence as  fast as it can.   From the Rocky Mountain Institute book “Reinventing Fire,” in 2010 four German states, totaling 10 million people, relied on windpower for 43-52% of their annual electricity needs.  Denmark gets on average 26% of its energy from windpower.  The Extramadura region of Spain gets 25% of its power from solar, while the entire country has 16% of its energy supplied  by windpower.  In the US, the Minnkota Power Cooperative supplied 38% of its retail sales from wind.  Texas, yes that Texas, generated 8% of its electricity from wind in 2010, making it sixth in the world among countries, after China, the entire rest of the US, Germany, Spain and India.

While a lot of public discussion has involved solar, wind, hydro, thermal–the clean sustainable energy sources–the reality is that innovations that create efficiencies will drive most of the movement away from using fossil fuels.   We’ll simply be using less energy to do more work by being efficient, not necessarily by building new power plants, whether they are sustainable and clean or not.  Carbon fiber plane and auto frames will drop airplane and ground transportation weights by as much as 35%, and would raise car MPG ratings well into the 80MPG or greater ranges just by weight reduction.  The newest airplanes are using 20% less fuel because they contain carbon fiber frames instead of steel or aluminum.  This trend is still in its infancy, but will no doubt reduce annual transportation costs by billions of dollars within the next 10 years.

A national direct current grid, capable of transporting energy much longer distances more efficiently, would produce a national marketplace where producers of sustainable and clean energy supplies, most of which are situated in rural areas, can competitively price their energy into urban markets where most energy is used.   And a movement towards energy ‘islands’ where neighborhoods or city districts contain smaller energy plants that can supply their customers even if the larger grid cannot for some reason, can raise energy security by several magnitudes.   These types of modernizations work no matter what the energy source, but they definitely do make sustainable energy cheaper upfront where the initial resistance lies, because once built sustainable energy plants are far less expensive than fossil fueled plants.

The real impediment to all this is political.  Fossil fuel incumbents are some of the most profitable and therefore politically powerful, corporations in the world.  So far they’ve been able to successfully mute the publicity surrounding alternative energy sources, to divert everyone’s attention away from the real, substantive progress that’s been already made in sustainable sources and in energy efficiencies.  Republicans will, no doubt, fight the President’s efforts to earmark $2 billion in gas and oil revenues (that’s over 10 years, so it’s very modest in the scheme of things) to support energy research and development.

But times are changing.  Inevitably the price of gas and diesel fuels, and oil for heating, will rise simply because the rest of the planet is growing and as a result demanding larger and larger shares of these energy sources.  These developing countries understand that the US model of fossil fuel dependent economic growth can no longer be duplicated, so they are aggressively building sustainable supplies.  Nevertheless, in the meantime they will use fossil fuels too, even if they think fossil is more of a transition fuel (which it will be shown to be) rather than the bedrock fuel of their economies.

It’s a global race, in other words, to see who will be the most efficient user of energy.   As the advertisement says, ‘the best way to save on gas is to buy gas less often.’   So it goes.  It’s not a matter of using less energy, because energy use is going to climb as the world demand for it climbs, it’s a matter of getting more work done per unit of energy.

Haven’t had the time to write posts about what I’ve been concentrating on recently:  Our national energy system and what we need to change as quickly as possible.

That said, the political scene out of Washington DC hasn’t really changed all that much.  Republicans, in their long running soap opera aimed at fooling the American voter Republicans still represent them, are now constructing the latest episode in that opera:  “Fire a million employees or we’ll shoot the American economy in the head,” otherwise knows as sequestration.  Sequestration is the child of another GOP soap opera installment called “If you don’t give us what we want we won’t raise the debt ceiling and we’ll shoot the economy in the head.”   In case you haven’t noticed all of these opera segments  end with the threat “we’ll shoot the economy in the head.”

Sequestration came about as a result of the first debt ceiling threat.  It refers to the $1.4 trillion in government spending the Democrats gave to Republicans as a sop to keep Republicans from ‘shooting the economy in the head,” by refusing the raise the debt ceiling in order to pay bills Congress already agreed to pay.    Well, those sequestration cuts come due March 1 and now Republicans are threatening, once again, “to shoot the economy in the head” by allowing all the sequestration cuts to be implemented, as agreed upon, even though most Senate Republicans, and a near majority of House Republicans too, not to mention the Democrats and the President, think to do so is insane.

Sequestration will result in 1 million job losses in 2013 (Congressional Budget Office estimate) and no one believes the private economy will step up to replace those lost jobs any time soon.  So that’s how Republicans will “shoot the economy in the head,” this time.  In other words nothing has changed.  The Republicans really, really do want to “shoot the economy in the head.”  And that’s what a good portion of what passes for leadership in the not-so-modern Republican Party intend to do.

Some Republicans formerly known as Tea Party types (the shoot the economy in the head and ask questions later crew) are showing a little bit of anxiety in light of the shellacking they took at the ballot box in 2012.  House majority leader Eric Cantor, of Virginia (a state President Obama won in 2008 and in 2012), made a speech recently that could have passed as coming from a progressive Democrat.  Most notably he directly endorsed the ‘Dream Act’ for the children of illegal immigrants that the President essentially enforced via executive order.  And he described families of illegal immigrants (estimated at 11 million people) as ‘part of our national fabric.’   Nothing about a legal pathway to citizenship for these parts of our ‘national fabric,’ of course, in his speech.  One must not forget that this is a soap opera.  It’s fictional as far as the Republican Party is concerned.  This is hopeful, marketing ‘spin’ and nothing more.   The party that wanted all 11 million to ‘self deport’ as part of its official party platform in 2012 hasn’t changed that platform.

There’s no real mention of ‘jobs’ anywhere in Congress, although the White House keeps harping on that as an important policy.  So that’s not changed.  The White House puts up some legislation that’s far too small to have a great enough jobs impact, and Republicans refuse to pass it anyway.

Energy policy is stealth-like and not much mentioned.  Republicans, who represent oil and coal interests, keep trying to keep oil and coal subsidies and to eliminate subsidies to competing sustainable energy industries.  So far it’s a stalemate.  Both are keeping their subsidies.  Innovation favors sustainable, where technology improvements are cascading, bringing down costs annually.  Meanwhile basic oil and coal industries haven’t had a new technology in over a century.  Natural gas has had the development of new ‘fracking’ technology which frees up heretofore unreachable gas deposits, but true to form, Congress has done nothing to accelerate the increased use of natural gas.

Republicans still claim to be the defenders of America’s bill paying tradition, but the only technique they’ve actually offered is to ‘shoot the economy in the head.’  Republicans won’t raise sufficient revenues to help pay the bills and they won’t negotiate spending cuts unless Democrats abandon their loyalty to social contracts like Social Security and Medicare:  Ideas that have been roundly rejected by voters several times.   By wide margins.

So while the nation keeps struggling, it is left to its own devices because Republicans insist on trying to impose on American their wildly unpopular, and unnecessary as well, policies.

Over at the OilDrum blogsite is a recent discussion on trends in petroleum consumption.   A well regarded commentator at the site, westexas, says the following:

At the 2005 to 2011 rate of decline in the GNE/CNI ratio, in only 18 years the Chinidia region alone (China + India) would theoretically consume 100% of GNE (Gross Net Exports of petroleum worldwide).

Also in the post is this chart.

Beezer here.  So the trend is pretty clear that in the US at least, vehicle miles are declining.  Could be due to gas prices.  Could be due to our ongoing employment recession.  Or both.  However, in China, India and much of Latin America, growth in petroleum demand is increasing which is supporting the current gasoline price levels.  As for the Chinidia observation by Westexas, obviously something has to give long before that 18 year projection can come true. 

The National Resource Defense Council (NRDC) has published an innovative report that points out that using existing energy more efficiently has the greatest impact at the least cost.  Efficiency is so powerful a force the NRDC claims that even coal fired power plants can be kept on line, in many cases.

From the report:

An innovative feature of the proposal is the inclusion of
energy efficiency. State-regulated energy efficiency programs
could earn credits for avoided power generation, and avoided
pollution. Generators could purchase and use those credits
towards their emissions compliance obligations, effectively
lowering their calculated average emissions rate. Energy
efficiency is one of the lowest cost energy resources and
emission reduction options. States could use this provision
to slash emissions without costly and lengthy power plant
retrofits or new construction, reducing the overall cost of
the regulations……

Improving energy efficiency also cuts costs to consumers
and businesses. Switching to more efficient light bulbs,
adding weather-stripping or insulation in buildings, or
installing more efficient appliances and equipment, for
example, can save a typical household more than $700
per year—about one-third of the $2,200 average annual
utility bill….

The results from the model show that the proposed approach
would begin to modernize and clean up America’s electricity
sector while modestly reducing the nation’s electricity bill.
This is because energy efficiency programs adopted in
response to the incentives created by the approach would
cause overall demand to decline by 4 percent, rather

than increase by 7 percent. Meanwhile, coal-fired generation
would drop 21 percent from 2012 to 2020 instead of
increasing by 5 percent without the proposed carbon
standard. Natural gas generation would rise by 14 percent,
while renewables rise by about 30 percent (assuming no new
state or federal policies to expedite an increase in market
share for renewables)…

Investments in energy efficiency and demand response
are the lowest cost compliance pathway—much cheaper
than building new power plants or installing pollution
control equipment—so including this flexibility significantly
reduces overall costs. Energy efficiency consistently delivers
over three dollars in savings for every dollar invested,
which is one of the many reasons utilities have scaled up
annual investment from $2.7 billion in 2007 to nearly $7
billion in 2011, with a corresponding increase in energy
savings. See Figure 3: U.S. Electric Efficiency Program
Investments, 2007-2011. Efficiency investments reduce the
need to build additional power plants and infrastructure,
reduce wholesale power prices, and deliver significant bill
savings to individuals and businesses. Because substantial
reductions in CO2 can be achieved through energy efficiency
without building many new power plants or installing lots
of expensive pollution control equipment, the total costs of
compliance would be low—netting out at $4 billion in 2020.

Beezer here.  The report shows that enforcing the EPA clean air act need not be expensive.  It also says the program can be done without retiring coal plants and building brand new natural gas fired plants.  Basically the NRDC program is driven by the most efficient, least cost, techniques.  And  that technique is where efficiences come to the fore–irrespective of what fossil fuel is used.  The program provides a channel to substantial carbon dioxide reductions that doesn’t require, at least not initially, expensive replacement of coal fired power plants to gas fired ones.  The channel also allows for increased use of advanced systems like wind, solar and geothermal.

This post is basically a marker for two pieces of information I find compelling.  The teacher part comes from a study by the globally respected business consultant McKinsey Co.  Basically it says if we closed the education gap between the lower performing students vs the higher performing ones in our own schools, we’d add 3-5% to Gross Domestic Product (GDP).  If we closed the gap between our schools and the world’s top performing schools, like those in Korea, we’d add 9-16% to GDP.  We should be investing in more teachers and in training them to be better teachers.  It does add to GDP and the economy.

The second marker is of a CNBC interview recently with Robert F. Kennedy Jr.  Kennedy does a good job of giving the rationale for our continued investment in alternative, sustainable energy.  Kennedy has put his money where his mouth is.  He’s an investor in Ivanpah, a huge solar power installation.

BrightSource’s LPT solar thermal system is currently being deployed at the Ivanpah Solar Electric Generating System (ISEGS) in California’s Mojave Desert. Ivanpah, which started construction in October 2010, is the first project that will deliver power to serve the company’s signed contracts with PG&E and Southern California Edison. The project – which counts NRG Solar, Google and BrightSource as equity investors – is currently the largest solar plant under construction in the world. The project is being constructed by Bechtel.

A 377 megawatt net solar complex using mirrors to focus the power of the sun on solar receivers atop power towers.

• The electricity generated by all three plants is enough to serve more than 140,000 homes in California during the peak hours of the day.
• The complex will reduce carbon dioxide (CO₂) emissions by more than 400,000 tons per year.
• Located in Ivanpah, approximately 50 miles northwest of Needles, California (about five miles from the California-Nevada border) on federal land managed by the Bureau of Land Management.

The complex is comprised of three separate plants to be built in phases between 2010 and 2013, and will use BrightSource Energy’s LPT solar thermal technology.

Beezer here.  These are two areas, teacher quality and solar energy, where our national discussion has been intentionally hijacked by campaign funding from the fossil industries.  We are being inundated by this massive propoganda effort and, as a result, we aren’t rationally discussing what really needs to be done for our future health, economic and personal.  At least President Obama sticks to his promise of supporting more teachers and supporting alternative energy.  But they are minor points in our current discussion which almost solely revolves around more drilling and more tax cuts, especially tax cuts for the wealthy.