Month: July 2017

The United States Federal Government is not Broke.

I used to be upset about the amount of money the United States Government (USG) is borrowing, and promising to pay in the future. National Debt is about $20 Trillion. Add unfunded liabilities, like Social Security, Medicare and Medicaid, and the total may be $126 trillion.

Since the entire output of our nation, all business, everything is about $18 trillion per year, we seem to be in deep dodo.  Many commentators say that default or massive inflation to inflate away the debt is inevitable.

Its like an individual having debt 7 times his annual income.  If you income was $ 200,000 pa, you debt would be $ 1.4 million dollars! Holey Mackerel.

Yet I know lots of people who have under $500 thousand pa income and a $2 million house (with a $2 million mortgage).

The issue is, they have very large debt, but they have very large assets. Most homeowners with massive debt only get in trouble if the value of their real estate assets takes a dive, then in essence they then have massive debt and little assets.

Lots of countries with lots of debt have very little in value of assets. The government of Greece has some really nice islands that they would be loath to sell. Otherwise the purchasing and debt service power of Greece is mainly its ability to tax its citizens.  You can’t get blood from a stone. They are in the situation the USG would be with $126 trillion obligations and a $18 trillion economy to skim money off of. You ain’t going to get anywhere  for decades.

The USG, however, has lots of assets.  It has the largest gold reserves of any nation by far. Unfortunately all the gold in Ft. Knox is worth less than a half of one trillion dollars. A drop.

The USG is a big landowner: The Federal Government owns nearly 650 million acres of land – almost 30 percent of the land area of the United States. What so you think 30% of the land in the USA is worth if sold at auction?

The USG ownes about $128 trillion in energy resources.

 

 

Thank Goodness The Government is Helping us Afford Housing, Education and Health Care.

The Government has many programs to help us acquire affordable housing, affordable health care and affordable higher education.

Thank goodness.

Think how painfully expensive these things would be if we let the free market deliver them, like we pretty much do with food, household consumables, clothing, shoes, transportation, electronics and energy.

What thirty year old has not run up $ 50,000 of debt to feed, house and clothe themselves for the last four or five years? You know, like the debt they had to run up in order to get a undergraduate degree and be taken seriously in the job market.

Who does not rage over their weekly grocery bill like they do over the payroll deductions and the unaffordable co-pays for health insurance  that recently appeared?

Who is not driven to despair each time an article of clothing or an automobile wears out and they need to buy a new one? Like they are when they discover that it is time to buy a house and a house in a safe neighborhood with decent schools is beyond their reach. Not a luxurious house, just in a safe neighborhood with decent schools.

What’s that? You say food, clothing, transportation, electronics and energy are not very expensive relative to our paychecks. Exactly.

In 1976 it took 3.5 times the average income to buy a house. In 2012 it took 5.0 times the average income to buy a house. Good work.

Is the White House Plagued by Leaks or Fake News

Many are reporting that the White House is leaking like crazy and making it very difficult for the POTUS to get anything done.

The leaks are always by unnamed sources, meaning that there is no way to confirm that there was a leaker or that the reported content was accurately represented. Quite simply, you are taking the word of a reporter, or editor or news organization. You actually do not know their internal policy on validating a reporter who reports a leak. Maybe one or more higher ups somehow check on the story, maybe not.

The whole leak story rests on one thing, the integrity of the press outlet. The press is so partisan now, I believe they would lie to forward their agenda. With reporting of White House leaks, if one report was a lie there is no way for it to be discovered.  A White House official cannot refute it because the leaker’s identity is secret. Another reporter cannot investigate the story because the provider of the information is unknown. Insiders with knowledge that leaked reports are inaccurate cannot even confirm that because they would be leaking privileged information them selves.

So the sole foundation of a reported White House leak is trust in the media organization reporting it.

a camel is a horse designed by a committee

In the early days of the Internet people connected to it over their ordinary telephone lines. They were called POTS lines, standing for “Plain Old Telephone Service”.  It required use a modem, a device like a fax machine that turned digital data into modulations of sound that traveled over voice lines.

Everyone wanted speed, because the connection to the Internet with a modem was painfully slow.

Engineers and others would find ways to make the modem more efficient but for many people to use a device required standards. You would not want you modem to work if you called “X” but fail to work if you called “Y”.  So there was some international agency charged with approving standards for modem protocols. I think it was called something like “IEEE”.

There was v.32 then v.32bis, then something better. One problem was the IEEE always took years to agree on an international standard. People wanted the speed as soon as it was obtainable but the IEEE took years. So the modem manufacturers started selling modems with the latest technical speed booster before standards were agreed upon and put their firmware in flash memory which could be upgraded to the standard if the IEEE got around to it before the next better flavor was invented.

My business got a truly high speed connection to the Internet. A brand new Cisco 2500 router (called 2500 because they basically sold at $2,500) and a CSU/DSU (a sort of digital modem). I leased a dedicated line from the local Bell, no POTS service nothing. Basically dry copper over the phone network so the CSU/DSU did not have to convert digital to analog sounds.

I could not speak cisco, so my connection supplier provided an internet connection up to the Ethernet port of the Cisco. In other words, he programmed the router.

He told me an entertaining story. I can’t remember everything but I got the gist.

Internet Protocol (“IP”) was developed by a US Government agency to connect supercomputers (very expensive and very few) to university, military and government users in geographically distant locations. The point being, it was never developed by an international committee to serve countless masters.  It networked different types of networks together.

It was open source so anyone could use it.

Unix operating system designers started including it because, heck, lots of Unix workstations were in universities and research facilities and it was useful to be able to join the IP networks.

It started growing like crazy and eating every other network protocol. Do you remember Novell? It was not the best networking protocol lacking in security and other enhancements but it was free, had major market share and open development.

My Cisco guru once told me, and this is the point of the story, that people started using Cisco routers to connect using IP to other networks. It was becoming the universal language. European authorities finally said “you may not sell Cisco routers in our countries unless you include the INTERNATIONAL NETWORKING STANDARDS in you operating system.” Our protocols were designed by consensus and are much better than IP but are frozen out by established base. So Cisco included all the IEEE whatever protocols carefully designed by committee and no one used them.

Which means, don’t try to design from authority a perfect or even better standard. In the rough and tumble world a leader will emerge, it may not be perfect or even the best, but it is almost impossible to impose a technologically best solution. The failings of the leading technology will be reduced over time as they are discovered and hurt users.