Solutions

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Roy's picture
Roy
Status: Member (Offline)
Joined: Dec 31 2008
Posts: 11
Solutions

I watched "The Crash Course" with interest and especially considering Chris's optimistic attitude, expected a number of possible solutions in the last chapters. Well here's mine.

I would like to see other solutions posted, and mine criticized.

·       

Governments of all levels should not be allowed
to have debt. Debt incurred by a company to expand their business is rational
because they expect the expansion to increase revenue. Governments have fixed
income, yeah I know, what about when companies make more money or the
population increases, the taxes increase and therefore the government has
increased income. The increase in population will require more government
expenditures. So the government income is not absolutely fixed but borrowing
money and spending it cannot increase the income enough to justify the interest
or the requirement to pay the principle by those who did not make the choice to
borrow.

·       

Existing government debt must be paid off.

·       

Inflation control as currently practiced is the
wrong way. Right now inflation control is accomplished by adjusting interest
rates. To combat increasing inflation, interest rates go up. This works because
if borrowers have to pay back more interest, they have less money to purchase
goods and services. Since they have less money, they will bargain harder and
refuse to pay more. This system although successful, is unfair as it puts the
onus of fighting inflation on those who are already in financial stress and
rewards wealthy people in a position to lend their money. The wealthy
beneficiaries of higher interest rates are thus more inclined to fuel
inflation, only the fact that there are fewer wealthy lenders than poor
borrowers makes this inflation control method work. Conversely, lowering
interest rates encourages more debt in a society already over burdened with
debt.

·       

Inflation is typically tied to the money supply,
by stating that if the ratio of money to goods and services increases then
inflation will result. A little more specific definition is that inflation is
caused by people willing to pay a premium for services and goods, and providers
demanding more money for their services and goods. The people most willing and
able to pay a premium are wealthy. So how does this tie in with money supply?

·       

Governments are no longer on the gold standard.
New money is created out of “thin air”. I don’t think this is a bad thing, just
the way it is done. The government sells bonds. When these bonds are cashed in
the Federal Reserve in the US
or Bank of Canada in Canada
writes a check to cover the bond. There is nothing backing up that check except
that it is declared “legal tender”. This is how new money is introduced. Two
things happen here. One most bonds are purchased by banks, so this new money
goes to bankers. Two all bonds pay interest, so the government is paying
interest on the money it creates to the bankers. This results in new money
being given to the wealthy, the class most likely to fuel inflation. If
instead, new money was given directly to government employees and contractors
as regular pay, then these people and companies would experience no windfall
income, and will not fuel inflation and it won’t cost the extra interest. The
government can use this saved interest to pay down the debt, improve
infrastructure or even reduce tax rates.

·       

How much new money should the government print?
As society grows, population increases and for everybody to maintain their
existing wealth, new money must be introduced. As businesses create new wealth
by increased efficiency e.g. automation, and creating new products, new money
must be introduced. If there was no new money then we would be in deflation as
people would have less money and business would supply more for less. The
governments should print just enough new money to keep inflation near zero.
This is the proper way to control inflation.

·       

Interest rates should be fixed, so a borrower
can count on costs 5 or 10 years from now. There may be some reason for
adjustment, but the goal should be to fewer and smaller adjustments as time
goes on.

·       

Huge windfall profits are made on the stock
market by wealthy and skilled with very sophisticated computer programs that
take advantage short term fluctuations in value. Their profit has to come from
the losers. The losers are those who do not devote full time to the stock
market and purchasers of artificially inflated commodities. The stock market
was set up to provide capital for companies, not to make day traders rich.
These people do not contribute to wealth creation or an improved society, they
are parasites. They are also prime candidates to fuel inflation. The only end
result will be that all those who are not willing to devote their life to
monitoring their stocks will withdraw their investment as owning stocks will
become a liability. With no money being invested by those who create wealth the
stock markets will fail. To preserve the stock market and provide confidence
for long term investors a new rule has to be implemented I call the “Hundred
Day Rule”. All stocks purchased cannot be sold for at least 100 days. This will
force traders to think longer term and bring stability to the market place.

 

 

Unemployment and Poverty

·       

How is it that as the world becomes wealthier
through increased energy availability, machinery, automation etc. that there
are increasing numbers of poor? Unequal distribution of wealth.

·       

More skilled people are unable to find
employment, largely due to automation and the industrial revolution. We simply
do not require everybody to work 40hrs / week to support our society. Split the
available work among the qualified workers.

·       

We need to adopt a Robin Hood policy with
taxation. Take from the rich and give to the poor. This is not going to go over
well with the wealthy, but I remind them of the consequences above. I don’t
have a formula for this one, we need to have wealthy people, we need to reward
exceptional achievements, but excessive spread between the rich and the poor
cannot be tolerated. We need to tax the wealthy enough to have everybody living
above the poverty line. This poverty line has to be reasonable, not just bare
subsistence.

·       

Everyone should be given a “welfare” check,
including the very wealthy. This will not be considered earned income or taxed.
This government supplied income should be high enough to keep everybody out of
poverty, provide shelter, clothing, food, transportation (at least enough to
afford public transportation), basic entertainment, phone, computer with
internet access etc. Also everyone should have socialized free medical, dental
and prescription drugs, and education (including university). Under this plan
there would be no minimum earnings before taxes; taxes would be paid on all
earnings with a scale of minimal at low earnings and increasing as earnings
increase. This would remove the “stigma” of collecting welfare, and provide an
easy path to work as the existing system penalizes welfare recipients who want
to work by clawing back 50% to 100% earnings until the earnings is high enough
to get them off welfare. Unemployment insurance payments could reasonably be
reduced since everyone gets the basic government income.

·       

Some people will object to the preceding plan by
saying some will choose not to work at all. I say be grateful they are not
competing for your job. There will still be strong incentive to work, to “get
ahead” have more comforts, a better life. Not all who chose not to work will be
lazy, some will work on private projects, become artists, volunteer for various
humanitarian work etc. and these people will improve society.

·       

I am not quite sure how to get from here to
there. The goal would to be to accomplish this with net inflation of zero.
Suppose we chose that people with an income of $75k remained with the same
disposable income before and after the switch. In a graduated scale people with
lower incomes would benefit and people with higher incomes would pay. E.G.
someone earns $75k they get the basic government income ($20k?) and work 1/4
fewer hours due to job sharing, Their employer has slightly higher expenses due
to managing more employees and this ultimately comes out of our previously $75
k earner (who is now at 3/4 x $75k = $56.25k) – extra employer expense so gross
income is $55.5k + $20k = $75.5k. His tax would be adjusted so he has same
disposable income.

 

Energy

·       

Peak Oil is upon us, governments are scrambling
for a solution. A popular solution is Nuclear. I am a proponent, if done with
no radio-active waste product.

·       

The solution includes all solar, wind, wave,
geothermal systems that provide clean renewable power. Ultimately the sun can
provide us with almost infinite power for a billion years. But right now I
think our best step is the Liquid Fluoride Thorium Reactor. LFTRs are a proven
technology, research was terminated in 1975. New advances with better heat
exchangers and the Brayton cycle turbines make this a highly desirable option.
LFTRs can burn our stockpile of radio-active waste from existing nuclear power
plants. LFTRs produce little long term radio active waste, or products suitable
for making bombs. The radio-active waste produced has a short half life and
requires only 300 years of storage as compared to the uranium waste which has
to be stored for 10,000 years. There is also much less radio-active waste, 0.3%
for equivalent power from uranium. Thorium is plentiful, there is enough in
coal ash and mine tailings to power the world for 100 years, and a million
years supply can be dug out of the earth. See http://www.energyfromthorium.com/
and click on “Energy from Thorium” and read. We should build a factory to build
these in a size small enough to ship on trucks (200MW) and an assembly line
will bring down costs. These could be set up all over the world (no worries
about nuclear proliferation) and first locations should be to replace coal and
oil fired electrical generating plants, because there is already power
distribution set up at these locations. Pollution from these sources will be
terminated.

·       

The revolution in the transportation has already
started. Almost all cars and trucks will be running on electricity instead of
gas or diesel in 15 years.

·       

Industries currently dependent on oil for energy
can be converted to use electricity.

·       

Diesel-Electric trains can be converted to all
electric and powered by track-side conductors.

·       

Oil will still be required for the plastics
industry, the most wasteful thing to do with oil is burn it.

·       

No near-term solution for aircraft. People in
cold climates like northern Canada
and Alaska
will probably prefer to stay with gas powered vehicles longer than the rest of
the world.

 

 

Environment

·       

Stop pollution; see previous section for one
answer.

·       

Ethanol plants are worse than the gas they
replace. Close them down.

·       

Many people are working on successful projects
to save our fisheries industry, farm land, and animal species. Thankfully I
don’t think I need to provide solutions here.

·       

Farmers are moving away from using polluting
insecticides, and this must be encouraged and expanded.

·       

It is possible to build garbage re-cycling
plants that process minimally pre-separated garbage in a refinery type process
to achieve 100% recycling. Garbage needs only to be separated into wet, dry,
and paper. No land fills required.

·       

Sewage and organic waste such as produced by a
meat processing plant can be converted into oil.

 

 

Resources

·       

Many minerals are getting harder to mine. Mines
are getting deeper and lower grade ores are being used.

·       

I think space and the Asteroid Belt is the next
frontier. We should send satellites to map all asteroids, and determine what
minerals they contain. At some point, maybe sooner than you think, it will be
cheaper to de-orbit a small asteroid of high-grade ore, bring it to earth
orbit, cut it up and parachute pieces down to earth.

 

ckessel's picture
ckessel
Status: Martenson Brigade Member (Offline)
Joined: Nov 12 2008
Posts: 486
Re: Solutions
Roy wrote:

I watched "The Crash Course" with interest and especially considering Chris's optimistic attitude, expected a number of possible solutions in the last chapters. Well here's mine.

I would like to see other solutions posted, and mine criticized.

·       

Many minerals are getting harder to mine. Mines
are getting deeper and lower grade ores are being used.

·       

I think space and the Asteroid Belt is the next
frontier. We should send satellites to map all asteroids, and determine what
minerals they contain. At some point, maybe sooner than you think, it will be
cheaper to de-orbit a small asteroid of high-grade ore, bring it to earth
orbit, cut it up and parachute pieces down to earth.

 

I think that the astroid would need to be made of some pretty fantastic stuff for that one to pay off on the basis of Energy Invested tO Energy Returned. Perhaps something we don't yet know about!

Coop

Roy's picture
Roy
Status: Member (Offline)
Joined: Dec 31 2008
Posts: 11
Re: Solutions

Asteroids

Imagine a group of Shuttle Booster style solid fuel rockets being delivered to an asteroid and mounted to change orbit to be elliptical enough to cross Mars orbit. We don't have to slow it all the way down to Earth orbit speed, or even to Mars speed, just change to elliptical orbit. Time the blast so the asteroid goes to Mars. Direct it to slingshot around Mars such that it slows down and aims for our moon. Do the same thing at our moon to slow down more and aim for elliptical orbit around Earth. This will not take enormous amounts of energy. Most of the energy will come from Mars and the Moon (actually most of the momentum will be transferred to Mars and the Moon).

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