Friday, February 15, 2019

Policies to enable home energy production

Building codes and Utility governance and regulatory policy are critical to deep/100% renewable energy economy.  This is an important post for new approaches that simplify rapid and open renewables adoption.  This is a follow up to my importance of carbon tax and dividend policy paper

Review of basic building and utility rules
Building codes mandating energy efficiency are useful.  They mean less overall energy production is required.  Provide increased comfort and usually pay for themselves in energy savings.  But, a more holistic criteria for building codes would be to minimize energy imports, and, soon to be discussed more importantly, minimize on-demand energy imports.

California is mandating solar generation on new residential construction.  This is a great policy where spending an extra $5000 to $10000 can give up to $25000 in universal (close enough to cash) value.  It obviously minimizes energy imports into the home.  Holistically, with the previous point, this beneficially impacts outside energy production and infrastructure needs.  The mandate is important because it forces developers to learn how to generate this free value for them and their customers.  Without the addon of permitting, electrical connection changes, and sales, residential solar can be cheaper than utility scale solar.

The net zero home is a poor concept that corruptly grants control by monopolistic utilities (even as they fight such regulations).  A net zero home is one that will export as much energy as it imports over the year.  It is corrupt because it artificially limits power output from the home, and serves the utility in not having to pay for excess power provided by the home.  The regulation has no social value, because society gains substantially by solar production in multi-use settings (ie. land/space below is used for other purposes), but an artificial limit on self-sustainability prevents one home/space from powering 10 or more others.

Home energy systems that use variable electric input
The most important and useful building code regulation doesn't exist yet.  It is a requirement for heating and cooling systems to operate on variable electric source input.  When the sun is shinning or wind blowing, heating and cooling is produced and stored.  Such storage is 100 fold cheaper than any battery can ever be, and provides a needed energy buffer by feeding on cheap energy when it is available.

85% of typical north east US and southern Canada residential energy is used for heating, cooling and refrigeration with 4% of that refrigeration.  According to Hydro Quebec, where most of their customers use electricity for all residential energy, 80% of their customer's energy is used for above purposes.  The difference is that electricity can be more efficient.

A 100% renewable economy

setting the 12.6Qwh delivered in US as the 100% electricity generation mark, from those years, it would take 4.22Qwh (0.5 * 6.76 / 0.8) to electrify half of transportation, and 8.44Qwh (same at half efficiency) to convert the remaining (half: trucking, boating air) transportation to hydrogen (through electrolysis).  It would take 19.5Qwh ((18.9 - 3.3) / 0.8) to convert industrial use of fossil and bio fuels to hydrogen.  In percentage terms, electrified transportation adds 100% to generation needs, and industry adds 155%.  With an 80% of electricity going to variable/intermittent sinks, and all of the transportation and industrial sectors also being intermitentable, 335% of current generation can come from variable renewables.  This leaves 20% of existing generation capacity needed for on-demand (lighting, cooking, computers and other electronics) energy, can be replaced with hydro, batteries, tidal, geothermal.  Another easy 5% of residential use (25% of the 20%) can be deferred to intermittent/abundant energy times:  vacuuming, laundry, some meals, many computers have built in batteries.  So 15% of current electricity production needs to be on-demand.  15% of legacy electricity production needs to continue existing.

Battery Electrical Vehicle charging as an intermittent demand
A typical light duty car, very well suited to being an EV, drives 10k miles/year (30 miles/day) and is parked over 90% of the time.  While charging, and especially fast charging, would appear to place a high demand load on the grid, if the energy is coming from the 90% of other cars that are parked and charging on an intermittent basis, then the on demand energy can be considered intermittent as well.

Intermittent residential heating and cooling systems
Commercial systems designed to take advantage of time of use rates have used the principle of compressing a refrigerant to transfer heat out of it (storing it in water), and then letting that refrigerant expand in another container to create cold (can be transferred to water for ice).

A solar powered home has an added advantage of piping from the cold end to PV solar panels (a radiator on back), to boost generating efficiency, gain heat, and increase size of expansion space.  Condensing gas for heat needs no pump energy, and has lower transmission losses.  Pressurized gas that expands into liquid can be gravity fed or expanded for cooling.  Isopentane is a good heat transfer candidate for both space heating and cooling.

Unvented hot water technology also does not require pumping to distribute.  2 square meters containing hot water can store with 70C temperature differential stores 163kwh of heat energy.  This can be improved with phase change materials in an insulated enclosure.  Since steam has 540 times the energy density as water, and at 10 bar raises the boiling point of water to 180C (~200kwh).  Compressing steam into another container can regulate the pressure in the main producing vessel.  Though 160kwh can be enough for 3-10 days of heat in a small efficient house, and a larger house can devote more space for water.

Key utility regulations to make intermittent energy valuable
  1. Time of Use rates is a start, but real key is 3 levels of instant-change rates with large differentials that kick in with the 3 possible states of supply and demand balance/imbalance.
  2. Restructuring utilities into the 4 profit centers of delivery networks, substations, long-distance transmission, and power generation.  Debt of the monolithic utility distributed to each profit center, and all management/administrative layers above the profit centers slimmed down and turned into suppliers to the profit centers.  Bankruptcy of legacy power generation assets is a end goal of this process.  Delivery networks should be profitable with a $10-$12/month fixed fee (Toronto Hydro charges $33/month).  There should be no customer distribution fee (Toronto Hydro 6c/kwh), only a differential between consumer paying rate and producer paid rate.
  3. Power purchase agreements with producers should be cancelled.  Instead paid power is a direct function of consumer charged power rates.  Regulator/communities/utilities should agree on 1 to 5 year and longer seasonal forecasts that set minimum (and ideally maximum and expected) power prices for each time of use/supply-demand-balance rates.  Promissed forecasts longer than 5 years out would be subject to small adjustments downwards.  All promised minimums should be lower than current rates, but inflation is allowed to adjust actual future rates.
  4. Substation (the interface between local delivery and distance transmission) profit centers are forced to share profits from exports from their substations with the power suppliers that provide that exported energy.  Get a fixed fee for providing imported kwh to local delivery network.
  5. Transmission profit centers charge a fixed fee per kwh-mile(km) transmitted
  6. Local delivery systems charge a monthly customer fee.
  7. Residential producers are paid the same rate that would be charged to them if they were consuming at that moment.  If their energy is exported by their local substation(s) then the substation fee is deducted, but profit sharing is applied if the energy is exported at a higher rate.  Any net credit balance with delivery provider must be convertable to cash (less admin fee)
  8. Carbon taxes are inclusive of prices paid to producers.  (or energy producers costs already include carbon taxes)
Time of Use vs. instant spot rates
Ontario is one of the first markets to adopt time of use rates, but corruptarded sabotage of them defeats their purpose.  Daytime rates inclusive of distribution charge are 18.2c/kwh. Night rates are 12.5c and bridge rates are 15.4c.  With the high monthly fixed fee, there are very little savings opportunities for consumers to both reduce and shift energy use.  For an electric heat pump (COP of 3 for 40C-60C of heat lift 10k btu/kwh) to match the cost of 80% efficient natural gas at $9/mmbtu is 11c/kwh, and so enough winter hours of much lower electricity rates than this are needed to exterminate natural gas use in homes.

Instant spot rates are a simple alternative to direct market negotiated rates at all times.  It provides the same benefit with less precision, and 3 simple rate choices (high medium low) makes it easy for software to adjust use based on a utility/regulator/substation signal for which of the 3 rates are in effect, combined with weather forecasts and existing storage levels.

If instant spot rates were adopted in Ontario today, they would likely match the time of use rates and demand peaks associated with day and night consumption cycles, and the static/dispatch production mix.  Its renewable supply penetration that will modify the frequency and timing of low rate energy times.

A global standard for 3-rate-spot or TOU system would make it easy for global appliance (and EV) makers to integrate smart charging/consumption based on rate conditions.

weather forecasts would include rate forecasts allowing people to manually schedule some tasks such as laundry/vacuuming.

Utilities' long term rate schedule should include long and near term expectations of the balance of rate applications.  As a generality, long term with high solar adoption in Ontario, summer mid day rates should be at low rate, with rest of day at medium rates.  A shift that include high rates could occur in extreme heat.  In winter, the mix would likely be between mid and high rates, with low rates occurring on mild daytimes.

Renewable energy milestone stages
When renewable energy supply is enough to meet the daytime (or noon) demand on one summer day in a region becomes the Pivotal Renewable historical Surplus Moment (PRSM).  Prior to this day, all summer daytime electricity would be priced at the medium (mild days) or high (hot days) rate.  After this moment, and with continued renewable supply, rates will sometimes slip to the low level.

It is variable demand sources, and the triple spot rates, that prevents curtailment of surplus renewable power.

Electric utility as a service not a monopolist slaver
The restructuring changes proposed turn the utility profit centers into cost-plus based services.  The entire distribution network is paid on a per kwh basis.

The one exception is substations (the interface between local delivery and distance transmission).  It becomes incentivized to support as much local production as possible so that situations where low pricing occurs is maximized, and then export (or time shifting with battery) through the substation becomes possible.

Pricing becomes a political process that rewards forecast promises (and keeping them) that lower the long term consumer costs of electricity, while also incentivizing supply additions that are the only possible cause of sustainably lower consumer prices.

An easily achievable, in most regions, 2025 pricing goal for low medium and high rates are 5c 10c and 15c per kwh.  In the near term, the important parameter is lowering the medium rate.  Most renewable additions will sell profitably at that rate in the near term.  The critical aspect of the low rate is that it be at least 3c/kwh lower than the medium rate, because current battery pricing allows a 3c/kwh pricing premium for discharge price less charge cost on a daily battery cycle for break even or profit.

Better than PPA arrangements for producers
Renewable projects throughout the world are receiving multiple bids below 3c/kwh.  The cheapest power projects are wind and solar.  

With the 2025 pricing goals (5-10-15), renewable providers can make triple the revenue/profits at the medium rate over the next 5-6 years, and higher profits at the low rates, and earn better than the PPA bid rates for next 10 years.  Pay back investment quicker than under PPA.  Furthermore, investments in storage or an energy balance that favours winter production, can help ensure selling at medium or high rates, when it is cloudy or night, for even greater profit.

A significant benefit for the utility buyer is not having the risk of curtailment that it is responsible for.  Encourages seasonal and time of day appropriate production (and producer initiated storage) strategies.

A major problem with utility driven bids for projects of their choosing is the absence of land ownership by the builder/bidder.  A significant enhancement to any power project is additional use of the land.  That can include buildings, industry or agriculture.  Even more perplexing, its typical for projects that include energy storage as part of the bid to use separate land than the solar area for storage.  PPAs discourage creativity in generating power along with other uses/income.

Over time, expensive legacy generators close and go bankrupt
By putting all generators on "market spot" rates (the 3 rate system is close enough, but simpler), through its planning schedule, it provides a viability window for expensive legacy generators to wind down, possibly with higher profits during their early viability window.  Legacy plants should have paid for themselves by now anyway.

Welcoming all cheaper renewable energy to the grid is going to accelerate the planned price reductions.  Shutting down Ontario nuclear doesn't get the multi-billions it cost to build them, but closing them in the face of the next boondogle patch up job is the right move if they cannot foresee paying for the upkeep from the future market rates.

Short term prices that support legacy baseload power will also attract cheaper renewable power.  The more that come online, the quicker the planned scheduled cost curve will dip down.  A sharply decreasing scheduled cost curve will make electrifying cars and heat (with cheapest intermittent rates) more attractive too, which, through higher demand, will flatten the scheduled cost curve, attracting even more generation to make it decrease again.  If, for some reason, renewable power generators don't come online, then rates stay the same, but rates could still be lowered by importing from regions that do allow their prices to fall.

Every city, state, country that has made a 100% clean energy pledge needs simply to adopt this utility reform to get there.

This isn't quite a market system, as it provides near term above-competitive producer profits.  But, it is competition based in the long term.

Exporting of surplus energy
The cost of a transmission line, like a battery, depends on its use rate.  A solar or wind utility plant that produces 4-6 hours per day costs 4-6x more for transmission than a 24 hour legacy plant.  An export-purposed transmission line might only average 2 hours/day use.  Transmission lines cost between $2.50 to $0.75 per kw-mile.  Based on size.  with 400MW the smallest at $2.50/kw-mile.  3GW AC is $1/kw-mile.  Though HVDC can be as low as $0.50/kw-mile, it needs extra expensive equipment at the substations, and so the $0.75/kw-mile figure is used to standardize this.  At the equator, an east-west transmission line of 1000 miles offsets 1 sun hour.  At 45N (southern Canada), the distance is just 738 miles.  A 738 mile trade line producing at least 2 hours of traffic/day (10 am import from east, 2pm export from west) at $1/kw-mile and 10 year payback has a cost/price of $0.10/kwh/738 miles.  Much better utilization is possible if far spread out wind resources kick in in one region but not the other, and solar resources further east and further west also pass through the segment.  In fact, a transcanada high voltage trade line could get 8 hours/day of use with Nova Scotia 10am-2pm peak solar powering the mornings of the west, and BC peak solar powering the afternoons of the east.  This provides a payback price of $0.025/kwh/738 miles for electricity distributed the full length of the line, but higher profits when distributed shorter intermediate distances.  This price provides export incentive for the low to medium or medium to high rate directions, and incentive for more capacity along the transnational line... ie everywhere.

Trading transmission lines also provide resiliency value.  "Baseload" (or storage managed renewables) power operating at medium rate/balanced-demand-supply in one region can bail out a region operating in high/scarce rate conditions.  Shorter (better economics) lines can be deployed the further north they are.  High energy availability can support additional development of (northern) Canada.  Shorter east-west lines up north (with very low right of way costs) can better provide a missing continental  interconnection that supports the existing north/south trade routes with the US, more easily than providing that interconnection through the US (due to densely populated NIMBY complainers).  The resilience value can justify federal subsidy of an east/west trading line.  Resilience + export profit opportunities justify connecting your home to the grid even if you can be self sufficient 99% of the time.  It is also an opportunity to buy imported energy cheaper than available from domestic providers.  A combination of federal subsidies, "taxes" on exporter profits, hydro,geothermal, wind and USA resources pushing utilization close to 20 hours/day (this utilization rate alone is sufficient) can bring pricing down to $0.01/kwh/738 miles.  Wind typically produces at a capacity factor equivalent to 6-8 full hours/day.  With battery storage that avoids transmitting during peak solar hours, these resources can add that 6-8 hours of export utilization, and wind resources 738 miles away can have uncorelated production that allows reverse exports, and meeting the total additional 12 hours of electric trade.

Yet, it is difficult to create the trade network fully formed.  Instead, a surplus must be created in one region to motivate that regions drive for export routes.  Renewables provide bidirectional electricity trade opportunities, and it is with balanced trade that the transmission/trade costs are halved.

Hydrogen as energy export solution
Hydrogen MW-scale electrolyzers are quickly dropping in cost to $500/kw (recent sale at $477/kw), and take 44kwh DC to produce 1kg of hydrogen, which using a fuel cell provides as much vehicle power/range as 2 gallons of gasoline in regular engine.  For 7 year payback 4 hour per day production, would require a $2.15/kg premium to "profit from" for the electrolyzer.  So, solar is not a great match for hydrogen.  Wind with a battery buffer and 8 hour/day production, and accepting a 14 year payback (20+ year electrolyzer life), then only a 13.4c/kg premium need be added for low profit, if the main goal is to export energy.  With 3c/kwh electricity cost (typical PPA rate that requires AC conversion equipment and energy losses), this translates (before storage/distribution costs) to $1.454/kg.  Under $0.73/gallon-gasoline-equivalent-range.  This makes sense to dedicate wind projects, especially remote ones, to direct hydrogen production.  Settlements and industry can be created around wind projects.  Large single 6MW+  (10MW and soon 12MW options exist) near shore turbines can be tied directly to electrolyzers on barges or shore, and solve the power delivery costs associated with off shore or remote wind systems.

At 5c/kwh (target next decade municipal surplus-low rate)  Hydrogen produced at a filling station could be priced at $2.47/kg ($2.20 electricity + 27c "overhead"/profit).  Equivalent to $1.23/gallon-gasoline.  Operating at 10c/kwh rate would add another $1.10/gallon, but reduce overhead as electrolyzer would be used much more often.  Additional profit could be made with (hydrogen and battery) storage, and pricing based on 10c/kwh electricity (even if a mix of 5c and 10c/kwh energy is used at filling station).  Vehicle operating costs would still be less than gasoline, but a carbon (or other gasoline) tax, would quickly accelerate the hydrogen economy and bring costs down even faster.

For utility scale renewable projects that are grid connected, devoting some resources to hydrogen might allow them to divert some surplus production to hydrogen for the explicit purpose of maximizing the amount of electricity they can sell at the medium or high power price.  Essentially manipulating the market by diverting their production to self use.  If the market price of hydrogen rises in summer driving season to match rise in solar production, diverting more electricity to hydrogen may make sense.

MW-scale Hydrogen electrolyzers are mobile container sized (1.5MW) units that can be quickly set up, chained together,  and moved/sold elsewhere.  In addition to exporting fuel from northern summer hemisphere to southern hemisphere, seasonal trade in electrolyzers also make sense where summer energy surpluses exist.  Canadian summer solar potential, with stabilizing battery and solar trackers, can support over 10 hours of hydrogen production per day, long enough to efficiently amortize the capital costs of an electrolyzer "rented" for 6 months before it is shipped off to Argentina for the winter.

Promising near commercial hydrogen technology is SOFC cells.  This would match better with renewables, and grid connections, because an advantage is that they are reversible (turning hydrogen into heat and electricity).  Being used more hours per day increases their value, and the value of the electric transmission line they feed into, and the value of a solar/wind electric and hydrogen powered ship that can generate fuel from the same equipment as its "motor".

For hydrogen to compete with natural gas ($9/mmbtu delivered) as heating fuel, it would need to cost $1/kg.  Made from 2c/kwh electricity.  A carbon tax is needed for hydrogen to take on this role given distribution costs, though 2c/kwh or lower electricity costs from renewables are an eventuality, especially under current curtailment pricing models.  Since heating fuel is needed in winter, it would need to be imported from summer hemisphere surpluses operating on the 10+ hour scheme in previous paragraph, or with a continued substantial drop in electrolyzer equipment costs.  Hydrogen storage made with surplus electricity costs could be used more efficiently than gasoline/diesel.

Hydrogen is competitive with battery efficiency if its purpose is combined-heat-and-power (CHP).  Innexpensive, very similar to propane, generators can be run indoors without ventilation with 25% electric, and 75% heat efficiency, and free humidity.  Fuel cells are only needed when electric power is essential, though a converted natural gas plant can beat that efficiency at large scale.  Combined heat and power generally needs a distribution network though.  I believe ammonia to be the best density boosting hydrate, but there is no near term move to using it as a hydrogen carrier.

One misguided analysis of California's 2015-2018 curtailment of renewables shows that a hydrogen system that uses curtailed energy as both daily and seasonal shifting to produce grid electricity on demand is cheaper than a battery system that handles just daily shifting, assuming a 0 curtailment goal.  At a cost of $538M in hydrogen systems.  A far better hydrogen system that saves $356M from proposal is to sell the hydrogen as vehicle fuel, but if it produces too much, California's curtailment is concentrated in winter, while Canada's power deficits would also be in winter, and transmission line trade would help both.

Yet the main point of this paper is that curtailment can be eliminated for free through demand shifting.  Consumers will pay the price for equipment that facilitates shifting and be rewarded with cheaper energy, even as producers expand unconstrained.  Utilities/Government obtaining electrolyzers to handle surpluses above and beyond the matching demand shifting can cope would be a profitable way to cope with surpluses.  Especially when the current alternative is paying other regions for dumping power.  As future curtailment is constrained, mobile electrolyzers can be sold off.

Politics of  exports and imports
Complaints about the wealth generated from exports are possible when the result is higher domestic energy prices.  Quebec is a large electricity exporter (Hydro power), and their utility is very well managed.  Where export profits subsidize domestic rates is a formula for political support for exports.  High utilization of export transmission lines from steady hydro power means greater support for additional intermittent export power and pumped hydro (reverse some existing turbines) storage that can keep export lines full 24/7.

Dependence on transmission imports gives your suppliers extortion power.  But connecting to multiple regions not only ensures competition among suppliers, but furthermore lets you pass through exports from one region to another.  Where imports including transmission overhead is cheaper than domestic options, it should be popular.

The money side of politics supports enslaving you to existing expensive energy supply, limiting all new supply, and extending immediate incumbent profits no matter how small over any future social costs no matter how large.  Ontario's financial sustainability depends on bankrupting/restructuring its energy monopolies.

The power of monopolies is not limited to extortion-level profit margins.  Regulatory authorities that approve every corruptarded cost proposal allow profit inflation from the higher cost base.  Relying on the monopolies to increase supply and drive down costs and consumer prices  is also a poor regulatory model.  The distribution utilities must be entirely separated from power generation assets, and the utilities must be compelled to accept new connection projects.

The politics of a carbon tax and dividend are great because it is only the most hopelessly retarded who will listen to the moneyed opposition to such a plan.  The vast majority gain from the plan, as the average energy use (total use/popupation) is higher than the median (the 50%tile user) energy use.  Politically, a small start makes sense to prove the popular net cash gain from dividend over tax, and increases the appetite for more gains through higher carbon taxes.

The politics of aspiring to 100% (or other % target) renewable economy are pretty empty without a concrete plan/steps to achieve the goal.  It does keep the moneyed opposition silent and innactive without concrete steps to generate lies against.

A far more useful and unifying "poltical promise" is to promise specific lower consumer rates over the near and far terms through deployment of renewables that disrupt existing expensive energy systems and monopolies.  Making it profitable for new generation to disrupt legacy polluters.  Generate massive employment and tax revenue by new generation costs and profits, and more taxes and profits from exporting surpluses to neighbours and the world.  Providing cheap energy to others discourages them from making their own all the while enriching you.  Providing 120 Qwh/year to the world at 3c/kwh from your lands would generate $360B in annual revenue.  The costs can all be privatized, with government simply enabling it.

Residential/Commercial/Farm power plants - Power pyramid
This section is about engineering guidelines that allow dense urban deployment of solar power focused on geography of southern Canada and North East and Great Lakes area of US.  The recommendations could raise aesthetic and shadowing objections, but these are also addressed.

Ontario has lots of trees that go up 2 to 3 stories.  It has a solar apex of under 30 degrees in winter and over 60 degrees in summer  Solar noon in Toronto is around 12:30 EST in winter and 13:30 DST in summer.

The general principles behind the power plant design is a pyramid-like shape made similarly to lattice towers that hold windmills or power transmission lines.  The south face is at the ideal winter power angle for Toronto of 60 degrees (or 58 = 43+ 15).  In the example property, a slightly more than 7m (24ft) wide south frontage is used.  If the foundations for the base (4 corners of property) are not elevated, then 4m depth or more of "front yard" allows the pyramid to clear a 6m tall (at roof edge) 2 story house.

7:30 am (solar) March 21st view
In above illustration, the gold colour indicates solar panel locations.  2 neighbouring properties each have their own pyramid.  At the top, the front property has an outline for how side panels would be extended past the peak front.  Main scaffolding is not needed for support.  The back building shows incorrect unneeded support for a side panel area.  The red cube is a house.  The length of front facade is 29.7m, with apex of pyramid under 14.85m from front of property.  Height of pyramid is 25.7m

Because the two neighbouring pyramids have a 6m gap at the top, at 7:30am on equinox (March 21), a 2m high strip is exposed to the sun.  Enough for 3.6kw of solar panels (10m long strip) with strong incidence to the sun to generate power.  Approximately the same area down the front of the pyramid is exposed facing the sun, and the whole front of pyramid is exposed, but it is at a poor angle.
9:25 (solar time) on January 7th view

At 9am in late January, the sun sees the exact angled side solar (gold coloured) area.  This 9:25 view in early winter is chosen just to see the visible gap as the sun comes around later in the morning.  The buildings in background, are identical, but the front on their property would be on a "perpendicular street" 34m behind the apex of the front pyramids.  The top section on the back street would remain illuminated this early in the morning in early winter.

The front side of pyramids have rows of solar panels start just high enough to let winter sunshine onto the front of the house.beneath them.  In this example, the rectangular front section is 7.5m high, and would have 49 sq.m (0.5m of gaps) of panels.  The triangular/trapezoidal section has 1m width at top, so another 49 sq.m in top section, and say 42 sq.m on side section (repeated on other side for afternoon.  140 sq.m available in mornings and afternoon.  25.2kw.

Texas, summer.  Generated power by time of day.  Red dots are fixed south facing panels.  Blue track the sun's location.   Solar noon around 1pm. Post-noon production lower than symetrical pre-noon due to heat buildup during day. source

By having 1/3 or so of production on east/west face, total 9am production is 40% higher than noon production.  More panels may be cheaper than a tracking array with similar overall production.  Edge of day production allows resilience to cloudy periods (light clouds cause 1/3 power loss, moderately heavy rain clouds cause 2/3 solar loss), allows early battery charging that can permit greater than 1 cycle per day, and allow heavy heating and cooling loads to start earlier and last longer which permits undersizing the equipment.  The most important factor though applies to sharing power (next section).

July 21 10:30am
Above illustration shows summer back yard sun exposure that may support agriculture or vegetation or recreation.  Since the sun is much further than camera, The 10:30 angle is for the space between the 2 pyramids.  The right edge one is closer to 11am.  House placement provides shading/cooling for 10am to 2pm for bottom of regular height first floor windows.  The shorter support beams of right property produce a more pronounced north-east angle.  A neutral direct east angle could be obtained by sharing back support legs with neighbour property, creating a standard equilateral top section pyramid.  A standard 2d reversible 60-30 degree brace connector with 11.5-78.5 3d offset would then simplify part requirements for the pyramid.

The 5-10-15 pricing plan can be 2-6-10 in summer
A solar dominated 100% renewable economy always produces way too much power on sunny summer days.  Enough to generate 3 days worth of cooling.  Hydrogen and transmission exports are necessary, but even then a 2nd sunny day in a row will drive electricity prices to 2c/kwh or lower during midday peaks.  Even with the bulk of annual generated power coming on sunny summer days, and peak prices hitting 1c/kwh, producers can average close to 4c/kwh with battery storage.  Make more on cloudy days than sunny days.  Target edge of day and winter generation.

Seasonal mobilization of hydrogen electrolyzers  is enhanced when the right amount of renewable electricity is enough to get through winter, and seasonal surpluses/spikes create some 1c or 2c/kwh energy.

Many other applications/opportunities are generated with periodic 1-2c/kwh energy.  Another that puts a floor on energy prices, and simultaneously makes generation cheaper is LED-growlight agriculture.  The above power pyramid is suitable for pasture land without growlights, but spring and summer shading/light can enhance the growing season with peak summer midday solar output.

The key to renewable energy is multi-use of land while producing power close to where it is used.  A pyramid allows densely packed high structures with plenty of room for activities below.

Wind and other uses from the pyramid
The reason for the 1m lip at the top of the pyramid is not only to accomodate the width of one solar panel, but also to form a 1 square meter chimney.  A vertical axis wind turbine (VAWT) is placed at the apex of the pyramid.  Up to 15kw. 4-5m/s average wind speed (for region) may be enough in an urban environment, because the tower is already built.  The pyramid creates a mountain-top enhancing wind effect, and the chimney, warmed by solar panels, creates an updraft further enhancing wind production.  A faster than windspeed but self starting helical blade design seems like the best performance and weight design.  For urban environment with mediocre wind conditions (5 m/s), a 5kw VAWT tends to have current pricing advantages over larger models, and are light weight, allowing for thinner pyramid structure, and smaller electronics to support power.  For rural and utility pyramids, Horizontal axis turbines are cheaper (about half), and scale up easily, and rural areas need less consideration for noise or turbulence.

Advantages of tower design over roof mounted solar is that the tower is independent from the life of the roof, and bifacial solar technology can be used (back of panel produces power).  Snow and white painted roof should boost production 30%-40%.  Its also permits "solar fencing" on both sides (east/west facing) of the property with a single panel producing both morning and afternoon.  A 3 instead of 4 leg pyramid with the 3rd leg centered north, could use a single "shark fin" of panels on the north leg to capture both east and west sunlight.

To reduce lower structure wind load from north side light plastic cold low pressure tanks could be placed on rafters on the north side to serve as gravity feed for liquid coolant that would cool through evaporation in the buildings below.  Evaporated gas would be fed through heat pump to heat water, in system from first section of paper, and cooled gas flowing at moderate pressure back to tank(s) where it would liquify as it expands.  Vapour pressure release from these tanks could further cool solar panels boosting their efficiency another 10%.

Solving the power transmission problem with pyramid solar/wind towers
The lattice towers can be built wider and taller with more support legs.  The wider, the lower the wind load.  Cloth if shade is not a concern, or clear plastic coverings where there are no solar panels can deflect wind up towards the wind turbine.

50m above the treeline pyramid at a 60 degree slope with a 50m wide base + 4m trapezoidal top (54m total width) provides a 1686 sq.m south facing surface area.  303kw DC power of solar.  Perhaps 400kw with bifacial. With enough east/west panels, 6-8 hours/day could be generated per tower.  300kw of wind from same tower also over 6 hours/day = 4.2MWh/day if both are 6 hours each.  With 16 towers per mile, all carrying power transmission cables on their north sides = 67.2Mwh/day.  But if a full land corridor must be acquired, why not 30 per mile = 126 MWh/day.  At 1c/kwh profit over 10000 day payback period, $1260k/mile of cost deferment.  This is without any lower section that is rectangular rather than triangular/trapazoidal.

Previous section on grid transmission came up with a 2.5c/768mile transmission fee based on $1/kwh-mile capital costs, and 3000 mile transcanada transmission line.  The fee can be halved if 3GW HVDC transmission is used.  Solar and batteries produce DC.  Wind produces more if it is DC.  Power pyramids would cut costs a further 80% to 0.24c/768 mile transmission.  A 3000 mile route would generate 378 Gwh/day.  138Twh/year is over 0.1% of global energy consumption.  25% of  Canada's current electric consumption.

There are several transmission options that cost less than $1260k/mile.  But smaller circuits can't carry all of the generated power.  Even at 3GW, 300kw peak power output from pyramid would mean that 10000 linked pyramids (333 miles) would fill the transmission line.  So lower density of pyramids,  or much higher voltage/capacity of line would be needed.  Very high battery storage wouldn't help as 378 Gwh/day is over 15 Gwh/hour.  5 times higher than capacity.  An obvious option is multiple lines.  China has up to 12GW HVDC.  Quebec has significant expertise.  If there needs to be more space for multiple lines/capacity, we'll just need a bigger pyramid, or side kick extention towers.  Another option is large hydrogen electrolysis sinks along the route that would absorb any overcapacity on one edge of the line, and produce hydrogen with it, or feed an undercapacity on other edge of line.

Solar friggin roadways and solar tents
An easier structure to build than a pyramid is a tent.  Straight support legs are joined in a 2d angle.
Solar roadways have had some attention.  There is no real potential behind them due to wear, expense and low efficiency.  Building solar tents over highways and railways however has significant power generation potential.  20m length of panels on just one side of roads, at 900m per km density and just 3 hours/day production would be 10Mwh/km/day of production.

Rural electrification
In light density rural areas, (still more than one customer), delivering electricity costs 70c/kwh (lost source).   Ontario provides rural customers with subsidies at both the utility level, and as a tax credit for northern residents. Very small tent/pyramids are needed to make a home self sufficient.  Larger if EVs or electric farm equipment is needed.  An EV makes great backup power system as well.

Instead of subsidies or expensive delivery service, loan programs to provide cheap off-grid (and community organized micro grid) electricity and heating systems, would drastically reduce taxpayer, urban, and the benefitting rural customers costs.  Subsidies makes rural NIMBY scum oppose renewable energy projects because they don't realize the necessity of using all of their open space for clean energy if they get it subsidized.

Cost target of pyramids vs utility scale single axis trackers
NREL puts the total 2018 cost of 100MW utility one axis (generally flat but tilt east/west) tracked solar at $1.11/watt with 35c/watt modules.  $370/kw in structural, installation, and engineering overhead is assumed.  $30k/MW is assigned for land.  With 330W panels, this is 7 acres/MW, and so an assumed cost of $4300/acre.  NREL's estimates apply to southern US.  Probably desert, but at least unforested land.  Tracking has higher benefits in southern lattitudes and summer as well, as a result of flat angle.

 A single axis horizontal tracker has a thick central pole in deep foundation.  2 rows of panels, and 12 panels per foundation.  They have a 5-10 year service/replacement for motor and structure repairs.

Power pyramids use a total of just 4 foundations, about the same amount of metal per solar panel, and likely the best assembly technique is to build 4 sides on the ground with bracings and panels attached, then use 2 cranes to first place the steeper east/west sides then the other 2.  Alignment guides would be part of the foundation.  Followed by a bolting/bracing/laddering system manually added to each of the 4 corners.  Tension cables can be drawn from opposing sides to a foundation post can enhance wind resistance.

There's potential to standardize angles without standardizing height of the pyramid.  Top sections need less thick steel/aluminum than bottom ones, and so thicker and thicker sections are added to make taller pyramids.  2 standards to allow for narrower urban pyramids with small light wind turbine, and wider rural/utility transmission pyramids to support larger wind make sense.  Top sections should connect to either continued angle bottom sections or rectangular sections. Parts for all sections can be premade for tight shipping and easy field assembly.

The general cost optimization formula is to do the most work in factory, easy shipping, ground field work, then elevated field work.  The above involves standard measurement factory parts, and relatively simple field work except for precision piling foundation positions and height.  Perhaps some field welding over a foundation platform with a few inches of leeway is needed.

A power pyramid (or series of them) in forested area should cost less than a typical utility solar installation in desert.  At a 60 degree angle in Toronto ON, each watt of solar will generate (4.34 hours/day) 39.6kwh over 25 years.  $1.19/watt installation cost is 3c/kwh.  For a 25kw solar urban power pyramid to match the $400US in structural and land costs of utility, $10k in structural costs are needed to match.   I hope that under $6000 in steel or aluminum can be used, that 6 workers and 2 cranes can do the job in one day for $4000.  Pilings and foundations are $2000 when shared with neighbours. 

The costs are higher already, and an extra $3000-$5000 may apply.  At $1.60/watt (4c/kwh) target, from $1.11/watt utility reference, there can be $22400 structural budget, and savings exist if 10kw wind turbine is under $16k (smaller mass produced VAWTs are under $1/watt).  Electrical and panel installation savings exist from doing all work on the ground, including the potential for using larger/heavier panels.  As of this writing, panels from China are as low as 20c/watt, so $3750 in additional savings there, if importing a full container.  And, all of a sudden, $10k in savings appear to get back to the 3c/kwh-$1.20/watt target.

For residential/urban systems, the payoff is entirely measured by the ability to sell surplus electricity for cash not credit.  Though, if forced to be off grid, savings include no utility bills, and no furnace.  Society's energy prices and global warming mitigation contributions are significantly enhanced by allowing residences to produce and share as much renewable power as they wish.  Net zero billing is unacceptably inadequate.

Issues with power pyramid in urban settings
Wind turbines are banned in Toronto and many other cities.  The reason is noise and aesthetics.  The power pyramid puts the wind turbine very high up.  Not visible to neighbours and from far away, is not any uglier than a sailboat.  VAWT's are also quieter than horizontal wind turbines, and they only make noise when its windy.  So do nearby trees and windows.  Banning all noisy and stinky cars and trucks on noise issues would be more relevant, and so VAWTs very high up should not be banned.

Aesthetically, the only part of the power pyramid at eye level are the foundations.  About 2 stories high setback close to house starts solar panels.  Pyramids are generally majestic, and a front facade in shinny panels sleek looking.  Very thick expensive polished steel coming from the foundation enhance both aesthetics and sturdiness.  Stone veneer on foundations can create impressive columns, and the heavy metal connection pile driven into "cement" can have ornamental elements included on installation guide paths, and as mechanisms (spirals) for tension cables.  Matching metal gates between the columns,  and robotic gun turrets, can keep complaining HOA/neighbours in their place.  Aesthetic additions don't count towards the power production costs, but can increase home/property value, and if so, aren't an actual cost.

Foundations any where near anywhere that can have a fast driving car need crash protection.  A buffered rounded stone veneered concrete base can provide that protection.

Power pyramids do create shading on neighbours.  The tall and narrow design illustrated in this paper minimizes that shading, but the concept of solar rights should exist.  This is easily settled by those who infringe on neighbour's solar rights accept a property tax increase equal to neighbours property tax decreases.  High rises built in front of other buildings should adopt this principle as well.  Building projects usually assume their solar and view access will be permanent, and it makes sense that first movers- those who initially squatted on the solar/view access- have a higher compensation threshold when the access is lost, than those who knowingly settle in a position where access is already restricted.

Legislation that minimizes court involvement, could in addition to adjusting property taxes on neighbours might also "mandate" electricity sharing.  If there are limits to the delivery network's capacity to absorb residential generated power, then placing additional lines to neighbours from power pyramids can bypass the main grid.  For instance, if a first power pyramid assumed it would have an east solar access for eternity, an east neighbour putting up a power pyramid could buy some of the first neighbour's now useless panels, and put up a sharing connection wire to supply morning electricity to first neighbour.  First neighbour could also sell afternoon electricity to east neighbour.  If a new west neighbour' power pyramid shows up, then first neighbour gets a connection to that power pyramid, and a network of 3.  One importance of utilities providing service at a reasonable flat monthly charge, is that this network of 3 doesn't all require a utility connection.  A spontaneous micro grid can exist in parallel to utility monopoly, though it can make more sense, if utility is unresponsive, for communities to dispossess the utility of its delivery network subjugating them.  NIMBY protests that successfully block a construction proposal that does not threaten their lives/health should result in a property tax increase on the protesters for protecting something they clearly value.

Zoning restrictions for low rise buildings are principally made for density and traffic reasons.  Power pyramids do not affect these.  Power pyramids over low rise buildings can enable urban communities to power themselves including high rise and industrial power.  Allowing power pyramids directly reduces the electricity/energy costs of a community, and increases the land value of the community:  Lower property taxes on neighbours and lower energy costs increase the value of those properties more than aesthetic disturbances decrease those property values.  Power generation savings and revenue will increase the value of power pyramid holding properties more than property tax increases depress them.  In addition to energy savings, cleaner air and massive employment opportunities related to construction of power pyramids and new HVAC systems would further substantially increase the desirability of a city and its land values/property tax base.

Advantages of Power pyramids

  • Completely independent land use below the pyramid.  Can tear down and build without disturbing pyramid/power system.  Ample access beneath it.  Land use can include nature preserves.
  • More solar energy production at 45th parallel (Ottawa) per area than in southern US or equator.  
  • Supplemental wind energy. Savonius-type VAWTs can have very high wind speed (storm) survival/production rates, and generally have high torque that can be matched to a more efficient than electrical motor fluid compression engine that would pair well with a heat pump system, and be easier to integrate the full power range of the turbine.
  • Space for additional rafters to hold anything, but in particular, gravity fed (no electricity) cooling systems that rely on a cold liquid evaporating in the space to be cooled.  Offset of any building roof's weight capacity limits.
  • Reduced snow load ratings and weathering of building roofs.  Flat roof with recreation space options.
  • Sufficient power generation for self sufficient energy needs of 3 floors of any space contained under the pyramid including winter heating needs, and EV charging.
  • Sufficient surplus potential to power any community of normal density.
Mutual reinforcement of 3 policies advocated in this paper
Utilities that focus on cost/price reduction schedule with 3 price points that affect consumer and producer prices simultaneously is the key enabler for the other 2 projects:  intermittent HVAC/water energy, and power pyramid structures.

Restructuring/bankrupting those utilities that cannot offer an affordable price decrease schedule, is the best way to transform service into a utility that can.  By shedding debt related to nuclear or other legacy boondogles, and rural rate subsidies, and eliminating all power asset holdings from any influence in network power increases will put the network/utility in a position to drive down prices. The only way to bring down consumer prices is to welcome and connect all new power generation.  Pay its customers who generate more than they consume.  The proper attitude is impossible to maintain while owning power generation assets, and especially impossible to accept proper carbon taxation policies if their power generation portfolio is affected.

A pricing schedule that declines over time is great for consumers.  A slow decline rewards early adopter producers who can rake in high early year, especially daytime, profits.  Expansion of the power generation network occurs without utility capital investments in power generation or promises to generators, other than their long term rate schedule.  It is permissible for utilities to own power pyramids on their transmission network, because they require suppliers on the same network to justify the transmission network.

A significant gap between low mid and high electric rates incentivizes storage, including HVAC systems that match the intermittency of low prices.  Increase the value of EVs who will be able to arbitrage between rates, likely to the point of making more than their fuel costs.  

The availability of cheap intermittent rates will spur hydrogen infrastructure (essential for heavy transport and industrial heat) and electricity export/trade routes where if trade partners can either match renewable production expanding both partners' resiliency or submit to dominance by the renewable power center.

Society at large will see, through lower rates, rather than mitigation of climate destruction, the advantages of  decarbonization, and be more welcoming/understanding of the need to permit more generation in cities, and more transmission lines.

Denialism of climate destruction, is a discussion avoidance tactic, but the real issues that don't get addressed by climate scientists when a discussion does occur, is that the side that wants to keep you enslaved to existing expensive dirty energy supplies will lie that measures to keep the planet habitable are a threat to the economy or jobs.  While the jobs can change, disrupting expensive dirty energy with cheaper cleaner energy is economically constructive.  So is a carbon tax and dividend to accelerate the disruptive investments to free you from monopolists.

The winning argument for climate change is a winning economic argument led by a utility sector (or more likely their regulators) that provides a declining energy cost roadmap.

Thursday, December 13, 2018

Deficit adjusted GDP

This post describes a fairly simple economic concept that can be abused for political gains.  Ignorance of the concept can be leveraged to break democracy through economic illusion:  At a bear minimum, any increase in deficits, should normally have a direct immediate increase in GDP equal to the deficit increase, but I will argue here that a 2x effect on GDP should be considered "par" or possible.  The political abuse from deficit increases is (self) praising the deficit inflictors for the GDP increase, and using deficit increases for the intentional destruction of the country for benefit to the destructors.

Scenario:  Increase GDP 100% with $20T increase in defense prices paid.
If the prices paid for military equipment were raised 30x or 40x for just a single year, then the US government would spend an extra $20T, and this number is automatically added to GDP, producing a 100% GDP increase.  (A good year for US GDP growth is 3%-4%)

The result of such policy would be no job gains in the defense industry, since more product is not being sold.  Only profit increases to those companies.  Out of gratitude (not quid pro quo since that might be illegal), defense companies would buy much of the massive debt required to finance their gifts, and political contributions would likely increase substantially.  Defense contractors would also be empowered to purchase/take-over the largest non-defense public companies.

The only effect on employment in the broader economy of this policy would be political spending resulting from increased donations, and the very low spending increases that result from stock price increases gifted to the wealthy.  Stock price increases generally trickle down to housing price increases.

The following year, when the deficit is decreased by $20T as an end to the defense contractor giveaway, there is a 50% decrease in GDP, while a permanent $600B increase in annual deficits compared to pre-policy levels, if interest rates stay at 3%.  A higher permanent increase in deficits if interest rates rise, and an ever increasing one as interest compounds.  This permanent debt servicing increase has 0 economic benefits as banks and other rich debt holders generally roll over investment profits into new paper assets.

The extra $20T in asset values (perceived as wealth) would slowly wither away if it is not put to productive investment use, and instead stays parked unproductively in paper assets.  The $600B+ in extra annual debt service will either borne by asset holders, or diminish "ordinary people"'s capacity to acquire the assets reducing their value.

As bad as defense contractor giveaway is, tax cuts for the rich have even less GDP impact
Deficits that are increased as a result of a tax cut have no direct (accounting) immediate increase in GDP.  It is only through higher spending from people, and direct real business investment (buying stocks or other companies doesn't count), that GDP and employment increases.

Furthermore, when a tax cut is a tax rate cut to businesses, it directly reduces business investment as the after tax cost of investment is increased, as is the risk of investment.

The GOP tax reform plan has most of its deficit inducing effects as a result of corporate tax cuts, and rates on the top personal incomes.  But it also reduced rates on the lowest income levels, mainly through a higher basic (standard) deduction.  Political gratitude also motivated PR stunts of bonuses.  Tax cuts and bonuses for the poor/working class do have a positive GDP impact because the poor spend all of their money/income.  Because that market spending is not all pure profit to the sellers, it supports "multiplied spending" and additional employment, before eventually terminating on top of rich individuals' and large corporations' savings hoardes.

Modelling multiplier effects

  • The poor and the government spend all that they receive.
  • The working class has low savings rates as well.  Regardless of income, if your monthly bank balance ends at the same level, then your multiplier contribution is based on your paycheck frequency.
  • Companies who channel profits into real assets or generate losses or little profits are also pass-through economic entities.
  • Companies/industries that regularly go bankrupt eventually recycle their profits into the economy.  This can be on a 10 year scale, rather than a monthly scale of working class people.  Autos, industrials, airlines, consumer goods to some extent fall into this low profitability or prone to bankruptcy category.  Can also be labelled the 1.0 economy that creates intensive employment.
  • Debt is generally neutral to the multiplier.  Pulls spending forward, allows spending greater amounts, but interest profits go to hoarders.  Defaulted debt brings money from hoarders into the economy only by destroying it but taking advantage of previous spending without repaying hoarders.
  • Insurance profits are similar to debt.  Profits from premiums go to hoarders, while claims add fuel to the economy.
  • Middle class retirement funding and home equity when it results in a small estate that funds purchases by heirs is a 30-40 year withdrawal from the economy.
  • Generational wealth can create 100s of years of economic withdrawal, and income earned by this group has most of it not affect their spending, and instead adds more years of economic withdrawal.
  • Ultra profitable companies similarly siphon off money out of the economy, on a continual process.  Payments to investors are simply transfers among hoarders.
These comments have been more in the context of withdrawal of money/spending rather than the spending multiplier which is quantifiably tracked on a macro scale as GDP divided by money supply.

Since quantitative easing after the financial crisis of `08, the multiplier has dropped to record lows.  The dominant explanation is that Federal reserve's printed QE money went to hoarders.  Money/wealth does not trickle down.

Deficit policy that can hope to break even
Policy that spends social funds such that an amount greater or equal to those funds + interest is returned as social revenue (taxes) is great policy.  High tax rates, investment incentives, working class and poverty relief, employment creation are all essential aspects to policy that can hope to break even.  Natural tax policy and basic income can effectively accomplish that social payback.  Infrastructure has the added benefit of creating something socially useful and potentially lasting.

Policy that simply grows GDP (another measure of society's income even if it does not go to the social fund ) rewarding a few hoarders with revenue and profit, funded by other hoarders who will profit from the interest on the debt cannot be calculated as a social benefit.

A formula for break even deficit policy is provided at the end of this paper.

Framework for deficit adjusted GDP analysis
As discussed in the opening section it is the change in deficits that either provide a boosting (if deficits are increasing) or contracting factor on GDP.  There are 2 analysis factors that need consideration:
  1.  How long a time frame between government spending and a multiplied impact on GDP: An increase in government spending should have an immediate impact on GDP as it is spent by the government, but any recipient of that spending can take several quarters to respend their "government gift".  A tax cut for kleptocrat hoarders will take lifetimes to be respent, but tax cuts for the working class can take less than a quarter.  Given that kleptocracy pretends its policy moves will pay for themselves through investment, a fair PAR scoring is to allow for a 1 quarter (3 months) lag between the deficit increase (that should have an immediate 1x benefit on GDP:  the initial spending itself) and the multiplied respending.
  2. Measure deficits as the accounting report, or the increase/change in total debt over the period:  The accounting measure of deficits exclude the raising of cash, and transfers to social security and other government trust funds.  The raising of cash can be needed because the executive branch has high brinkmanship games over shutting down the government with congress, and so, can only blame itself if it must mitigate risks that it is creating.  While social security funding can be blamed on past government commitments, it is within government policy whim to liquidate the fund in favour of funding basic income and ending pension ponzi schemes.  Another source of discrepancy between accounting deficits and debt levels is intentional fudging of expenses/spending and deferring them into another period.  Some of the largest issuances of debt occur the day after quarter ends.  Some military spending has been conducted off budget.  Therefore, there should be a strong preference to measure deficit changes as changes in outstanding debt instead of the accounting numbers, as the debt reflects actual cash use, and the US's detailing of public debt further allows excluding the effect of trust funds on operations.
Another substantial effect on GDP that is disconnected from economic health can come from insurance payouts related to natural disasters.  Hurricanes and forest fires result in large auto and home insurance payouts that stimulate both  of those (home and auto) industries.  Natural disasters furthermore stimulate spending from savings even though some day to day expenses and revenues are disrupted.  The net contribution to GDP is substantial, and both 2017 and 2018 have incurred significant contributions from the insurance sector.  1% of GDP in these years being attributable to public and private insurance/relief aid payouts surrounding natural disasters.

Tariffs in early/mid 2018, created a lot of economic activity as they were announced 60 days ahead of time, with a long threatened period, and so significant economic activity was pulled forward in order to trade ahead of tariff dates.

Stock and other financial asset performance does not count in GDP, but the $30T value of US stocks (close to $20T in gains over last 10 years), and the $40T bond market is a growing pool of money that could easily be used to open restaurants or machine shops if those opportunities were seen as attractive.  Properly taxing those investment gains and other policies could put the unproductive hoarde to use.  The supply side klepto-oligarch lie is proven by how little economic effect the massive store (and growth) of wealth creates.

PAR performance of deficit increases
Par is a golf term referring to a score expectation on any hole.  If you score par, you did ok.

A deficit increase that just grows GDP by that same deficit increase is a 1x multiplier.  The first section's example of simply increasing hoarding defense company profits achieves a 1x increase in GDP.  To use another golf term, surely this is a BOGEY underperformance of policy.

If a deficit increase is spent in such a way that there is a 50% respending rate of revenue (suppliers, employees, reinvestment, and taxes), with each of the respending recipients also respending at a 50% rate, then this creates a 2x multiplier (the infinite series 1 + 1/2+1/4+1/8.... = 2).  This is a good candidate for a PAR definition as boring historically professional policy can easily achieve this.  The other 50% that is not respent is kept as financial paper/cash or paid as dividends and share buybacks, or invested out of the country.    2x multiplied deficit increase is an easy candiate for PAR.

3x or more multiplier is fairly easy to achieve when deficit increases are spent on people in need who spend all of their income, or at least all of the benefit, and then subsequent recipients respend at a 50% rate.  Much higher multipliers are possible through universal basic income programs because they reduce the need for savings (ie. future UBI payments count as savings to citizens, and enable the support of safe low interest loans to people, and allows for the liquidation of retirement trust funds and public pensions).

US debt growth highlights
The US treasury publishes daily debt to the penny accounting:

From Sept 8/17 to Nov 30/18, US debt grew by over $2T, while GDP grew 1.3$T from June `17 to Oct `18.  Only $314B in intergovernmental (trust funds) debt growth since december 2016.  The rest ($1.7T) will show up as on-budget deficits soon enough.

Interest costs to the US has risen $65B in fiscal year `18 (ends in October) over `17 to $523B/year.  Average interest outstanding has risen 30 basis points to 2.52%.  Well below current market (reissuance) rates.  The near $22T in debt reissued at 2.8% will cost $616B.  3% of GDP, and 20% of government revenue.

Reasons for the high debt additions (deficits) include the tax reform bill effective for all of 2018.  The single largest debt increase ($500B) was in September 17, and was likely related to preperation for a $700B defense appropriation which passed later that year.  Hurricane relief may also have played a significant part in 4Q 2017 deficits which totalled $687B.

March and April 2018 saw $625B total deficits.  This coincides with a $1.3T spending bill with customs/ICE increases as its highlight.

Since August 2018, monthly debt increases have averaged $140B without significant spending news, other than accounting deficits remain on track to be over $1T for fiscal 2019, most likely the result of general revenue loss from tax reform.

US Deficit adjusted GDP growth


  • date and debt:  total debt retrieved for first day of month from debt to the penny site.  In billions.
  • deficit:  the increase in total debt over previous month.  Suplus negative deficit numbers are preceded with _ .
  • 3mdef:  3 month rolling deficit for current month and 2 previous.  This is used as the basis for deficit increases as it is smoother than single month changes.
  • incr:  increase/change in 3 month rolling deficit.  This is the basis for adjusting GDP as if it would be without a deficit increase.
  • GDP:  Monthly GDP interpolated from quarterly federal reserve data.  The 12 month rolling GDP at the end of the month.  In billions.  Q4 2018 GDP is assumed to be equal to Q3 GDP.  This would be reported as a 3.7% (12 month) GDP increase, and this is higher than most current professional estimates.
  • gdpinc:  The month over month increase in GDP.  Interpolation results in 3 equal increments pe quarter.
  • adjgdp:  Adjusted GDP monthly increase.  Adjusted by the deficit increase (incr column).  A 3 month rolling deficit that increases by $20B adjusts the "potential/core"/private sector GDP down by $20B.  This uses the 1x BOGEY effect on GDP.
  • cumAgdp:  Cumulative adjusted monthly increase.  Total adjusted GDP increases relative to december 2016.
  • 2xstim:  If the deficit stimulus resulted in a 2x impact on economy.  The number for each month is calculated by adding the deficit from 2 months ago into the 3 month rolling deficit (thereby double counting the 2 month prior deficit).  The 2 month prior number was chosen because it may have the most impact on monthly GDP.  A government that budgets its spending may for safety reasons issue debt 2 months ahead of spending needs. 
  • 2xgdp:  GDP adjusted by a deficit/surplus multiplied by the 2x factor in previous column.
  • cum2xgdp:  Cumulative 2x deficit adjusted GDP relative to december 2016.

Notes and conclusions:
(generously projected) Nominal GDP rose $1.7T since 2016 at the end of 2018.  $1.1T since September 2017 which is the start of the recent $2T debt ramp up.  If deficit spending were as effective as providing cronies with profits on infrastructure projects (a 1x multiplier), then the deficit adjusted GDP for the 12 months at the end of Q3 2018 is $697B and flat to 4th quarter instead of $1.1T. This would be a bit over 3% growth.

If we assume government policy is competent in directing growth, then the real/core economy would have contracted by $395B over 2016 levels by the end of 2018, and by $1T since Sept 2017, without the policy injections.  If instead we assume that the Republican government has been incompetent, then the extra growth achieved by an additional 1x multiplier (whatever effect existing policy had) would be  $1.7T (1.33T - _395B).

A basic economic point, and simpler analysis, is that with $1T/year in deficits, eliminating such an annual debt increase, with a 2x multiplier would result in a $2T drop in GDP.  About a 10% contraction.  The act of changing deficits from $500B to $1T creates a $1T economic adjustment. 5% change in GDP.

Its hard to link a debt increase to a month of economic activity.  From the data, GDP grows at around $60B/month when there are no debt increases, and the large spikes in new debt do coincide with GDP spikes.  But those spikes are well below the debt spikes.  In the 4 months leading to the end of Q2 2018, debt increased by $589B while GDP increased by $370B, but $180B+ of that GDP increase would have occurred anyway, and so $589B was spent to grow GDP only $190B.  A 0.33x multiplier, well below what (1x multiplier) can be achieved with deficit increases spent on corrupt cronyism.  Corrupt cronyism would be 3 times more stimulative than current US government policy.

The 2017 GOP tax plan
I've called that bill the destruction of America plan before.  Tax cuts for hoarders has no multiplier bonus, and therefore no benefit, to economic activity.  The $1.5T budgeted cost of the tax plan over 10 years is significantly underestimated because the deficit impact is wrongly assumed to behave like growth expanding infrastructure spending, with a delusion that the rich and profitable corporations will invest the extra profits in something productive instead of financial paper. Stimulative policy for the future is compromised by starting with an extra $4T in debt in 2020.  At 3% interest, that debt will cost $120B/year until the debt is abolished through default, and where the time frame for collapsing default is accelerated without immediate or lasting benefits.

The context of universal basic income
UBI is a refundable tax credit (equal for all) that can be structured/funded such that 90% of resident citizens receive a net tax cut, with a much larger net cash benefit to those with little income than those with more income. Unconditional Loan Income (ULI) can be a citizen-only program where a lifetime allowable loan balance can be withdrawn in annual/monthly chunks, and repayments are royalty-based portions of income like current distressed student loan arrangements, but where repayments extend future withdrawal balances, and unlike student loans, the cash from the loans can be used as pleased.  ULI is a version of UBI that is individually accountable.  Your own future success funds your past basic income.  Public-private partnerships can fund any deficit (unrepaid loans less interest earned) in the program, and they can be structured such that the central bank can hold them.

Because UBI and ULI are progressive tax cuts with largest benefits to the poorest, they can be funded with regressive-ish taxes such as a carbon taxes, flat income taxes, sales taxes (not my preference), elimination of standard deduction.  On the business side, an income tax equal to the flat personal income tax.  On the investor side (they benefit from UBI too), surtaxes on investment income while making dividends paid by businesses tax deductible to those businesses.  Replacement of payroll taxes with equivalent income taxes (but uncapped).

In the context of multiplier effects, UBI (and universal healthcare) reduces hoarding.  Individuals need to worry less about saving for their children's education, their spouse can always contribute financially to the relationship.  This encourages families and less needs to be put aside for emergencies.  The rich still exist, and hoarders will be encouraged by the spending power of people around them to invest and hire in projects designed to take those people's money.  Everyone who wants a job, or who will listen politely to generous offers requesting their help, can get a job, or pursue the same opportunities as hoarders have on their own projects, including partnering with others who all have the freedom to fail if their spent time/energy is ultimately unproductive.  All of this energy is expended freely through fair markets, that even if competitive can be more rewarding than harsh power imbalanced markets.

High tax rates and redistribution creates high multipliers on the economy (taking from hoarders to give to spenders) and encourage investment by hoarders to take money back from spenders.  Tax cuts for hoarders encourage harvesting and cost cutting, and in addition to no initial impact on GDP of the created deficits, reduce the multiplier further by accelerating collapse through more hoarding to prepare for the collapse.

Formula for break even deficit policy
Borrowing to spend may create a benefit in addition to a cost:  A bridge has commerce-building and personal time value.  It may have property appreciating value.  The value  may be monetized through user fees or property tax increases (or privatization).   Costs need to include interest on the borrowing.  Breakeven must be measured relative to social treasury, effectively meaning that an extra debt level is temporary.  Socializing cost to reward a few is a political theft.

Formula elements within context of suggested natural taxation principles and rates
  • Tax rate on productive income: 33% Personal and business tax rates equal.  Improved deductibility of business losses to encourage investment.  There are no personal deductions with basic income.  Productive income is defined as income that is (re)spent.
  • Tax rate on income that is (or likely enough) horded:  5% personal surtax on incomes over threshold ($100k, but arguably as little as $50k threhold), and 10% on investment profits.
  • Change that policy can have on the hoarding vs spending rates, and specific type proportions benefiting from policy:  Natural taxation encourages investment, basic income encourages entrepreneurship, and reduces need for savings.  Republican kleptocracy encourages hoarding and cost cutting.
  • Additional cumulative growth in dollars created by project/policy.  Can be very hard to predict.  Kleptocratic policy is certain to feign advocacy claiming high growth.  
  • Normalization to present or future value/cost.   Can depend on long term interest rates, or assume a fair safe foregoing of immediate consumption return of 5%.  Still policy can also affect interest rates.
  • Normalization for real vs nominal costs.  Inflation adjustment that affect interest rates. 

To untangle the US's tax code into productive and hoarding tax rates is difficult but can be approximated by the tax rate on GDP, capital gains tax revenues as percentage of major asset increases, and through income concentration/inequality.  Some broad notes on US finances include 6% of GDP is collected from payroll taxes, 8% from income taxes, 1% from corporate taxes, with 16% of GDP in total collected.  Corporate tax revenue is down 33% from previous year while other categories are unchanged.  While the kleptocrats frequently publicize that the top 1% pay a significant share of the income tax revenue, payroll taxes are paid only on wages and only the first 128k in wages.  A decent approximation of productive vs hoarding shares of GDP is that the 15% of payroll taxes on low and medium wages providing 6% of GDP in revenue, means that 40% of GDP goes to the productive while 60% goes to hoarders.

Under natural taxation, the long term productive tax rate is 33% of consumer and government sales, and hording tax rates of 5% surtax on wages and bonuses above $100k, and 10% on investment profits.  Consumer, government and residential construction are 85% of GDP.  Investment gains from stocks/bonds are not included in GDP.  With 2012 statistics, 56% of GDP is wages and bonuses, 27% business profits, and 17% is rents.  About 6% of 2014 households earned over $200k and 25% of all income.  Using an arbitrary guess as to the proportion of high earner's income being wages, 20% would mean that 51% of GDP is productive wages -33% tax rate, 5% is high wages (subject to 5% surtax -38% tax rate ), and 44% hoarder destined income subject to 10% surtax - 43% tax rate

In a $20T GDP economy, natural taxation raises $6.6T as base + $50B from high income surtaxes + $880B hoarding surtaxes = $7.53T.  $4.2T more than current revenue.  Enough to pay a basic income to 300M adult Americans of $14k/year.  A household with 2 earners of $100k each would pay a 19% effective tax rate (including $14k refund) including payroll taxes, and so effectively 12% income tax with current payroll taxes.  They would further be entitled to a 7% pay raise as their employer would no longer be penalized by having to match their payroll taxes, and so even with a 38% tax clawback on that $7k raise, and extra 4.34k after tax raise, and a 7.66% income tax rate apples-to-apples compared to current tax rates.  Furthermore, hoarders would pay $3.78T of the taxes.  All of the UBI funded by them and high earners, and not yet considering government program cuts.  The $4.2T in UBI funded by hoarders means $4.2T in higher spending (if all UBI spent) and GDP which could be split 50/50 in productive vs hoarder benefits.  At an average 38% tax rate, it means $1.6T in tax revenue, $1.6T in productive earnings and potential consumption, and $1.2T in additional after tax hoarding profits.  $3.2T of that $4.2T is a further increase in GDP and potential UBI and spending and additional profits to hoarders.  A 37% increased in GDP with just the rounds so far, and since all of it gets spent until it lands into a hoarder account, $7.4T in additional profits gained for $4.2T hoading taxes paid.  A very substantial benefit of UBI even to hoarders, and the calculation excludes the profits from asset/stock holdings that appreciate much more than the current earned profits.  In addition, lower crime lets hoarders park their lambo in any neighbourhood, UBI lets their kids fund their own education and projects, and their spouses fund their own divorce, and so lets other hoarders spend more of their hoarde which further enhances your personal hoarding.  Its this fact that makes the only objection to UBI the necessity of misery and a harsh environment that forces desperate submission on people because of the belief that the only way you can earn profits is from their exploitation.

Actual Formulas
The effect on GDP of a social project  where all collected tax revenue (directly related to project expenses + multiplied growth) is spent again and where the project's initial distribution between the productive and hoarders is the same as the proportion shared in broader economic spending is simply Project cost / (hoarding rate * (1 - hoarding profit taxation rate)).  For example a project costing $1 with a 40% economic hoarding rate and a 20% tax rate on hoarders will generate $3.12 in GDP (not necessarily all in one year) as long as all tax proceeds are respent.  It will also generate $3.12 in total hoarded wealth.  The lower the hoarding rate and the greater the tax on hoarding profits, the higher the multiplied benefit of a project.  When a project involves giving cronies high tax free profit margins then the project cost element in formula is replaced by proportion of project cost going to non hoarders.

When, instead tax revenue from any multiplied spending should go to repaying the deficit caused by the project then the government joins the hoarders as the drain  on the system.  2 formulas are needed.  First the multiplied GDP impact =  (after tax cost of project - hoarded portion of project) / (1 - (spending rate * (1 - tax rate on spenders)) where the after tax cost of project includes any immediate tax clawbacks on the hoarders and spenders directly benefiting from the project.  For example, if a $1.20 project will generate $0.20 in tax revenue then the after tax cost of project (and deficit increase) is $1.  If the project has no direct initial benefit to hoarders, then 1 is the numerator.  If the project offers a 50% profit margin to political cronies, then the numerator decreases to $0.50.  Multiplied GDP impact is increased with higher spending rates, lower (the inverse) hoarding rates (both initial and economy wide), and the lower the tax rate on spenders.  Increasing the tax rate on hoarding, and encouraging investment tax deductibility (both decreasing hoarding rates) is the easiest way to optimize these parameters.  Under natural taxation, there is a high business tax rate, but also 0 expected taxes paid by businesses.  They can bring tax liability to 0 by paying all profits to shareholders as dividends, or by reinvesting in growth.  They can go back past years to collect refunds on taxes paid for kept surpluses, if they dip into that surplus to pay dividends or investment.  The hoarders receiving dividends if yields are 6%-8% instead of today's typical 3%, are more likely to view dividend payments as "beer money" and increase their own spending rate.

The 2nd formula is Multiplied Tax collection =  multipied GDP impact * ((spending rate * spender tax rate) + (hoarding rate * hoarding tax rate)).  This is the tax collection from a single round of spending times the multiplied GDP impact.  The multiplied GDP impact includes any initial project spending (but would not include it if the project is a tax cut rather than a spending increase).  Maximizing tax collection is most easily done by raising the hoarding tax rate which simulatenously (and by other potential means) lowering the hoarding rate.  Some spender tax rate is also needed but raising this also lowers the multiplied GDP impact which is also a major factor (higher is better) for tax collection.

As a base example, a 60/40 split for spending/hoarding, with 15% effective tax rate on both generates  for a $1 project, a 2.04 (MGI) multiplied GDP impact with 15% initial round collection and so a 30.6% MTI (multiplied tax impact)  $0.306 of the project is recouped in eventual taxes.  The breakeven MTI excluding interest costs is $1.  The current economy spending/hoarding split is closer to 50/50 (worse), and that generates a 1.74 MGI and 26% MTI.

If a 60%-90% business tax rate, and investment incentives were applied such that the hoarding rate could be dropped to 10%, and a 43% tax rate on dividends and other hoarding income (hoarding tax rate), then with a 33% tax rate on spending (STR), $0.856 MTI is recouped.  A 15% STR, recoups 75.7% MTI.  Bringing the hoarding rate down to 20% might be the maximum possible, as most rich/persistently high income people will always have more money than they know how to spend. 20% hoarding rate, 33% STR and still 43% HTR, created recouped MTI of 75.4%.

The maximum possible MTI approaches 1 as tax rates approach 100%.  Only the HTR needs to approach 100% to come close to 100% MTI, because all money/spending flows up to hoarders, and the HTR mainly determines how hoarding income gets split between hoarders and government/society.  The implication is that there is no financial only considered full breakeven from multipliers.

In the last example, if natural taxation can accomplish a 20% hoarding rate, then a 75%+ MTI is achieved.  2.15 MGI split as 0.43 higher hoarder pretax income and $1.72 higher spender pretax income.  After tax, hoarders get $0.24 and spenders get $1.15, and so broad economic improvements are achieved even without treasury break even occurring.

Previously, I considered the theoretical (joke) possibility that a government spending project could have some intrinsic value.  With a 75% MTI, the value brought by a project need only be 25% of the cost.  Current taxation policy of 26%-30% MTI, means that perceived value must be 70%+ of the cost.  For instance a bridge or airport may have the additional 25% cost funded by property taxes and justify residents appreciation the value of personal enjoyment, time savings and freedom provided by the infrastructure project, and then any increased commerce/tourism/jobs enabled by the infrastructure is tax and personal revenue above and beyond the break even level.  When the value hurdle is 70% of the cost, much fewer projects pass the rational appreciation mark.

Policy implications
  • Sales/VAT taxes are a terrible idea because they lower the spending rate.  Encourage more hoarding.  Better to raise income tax rates.  Andrew Yang is the best 2020 presidential candidate for championing UBI, but a VAT revenue approach is flawed in comparison to natural taxation.  Black market activity is best addressed through legalization of the products involved.  It brings substances/services into the taxable market.  Black market transactions are equivalent to hoarding.
  • Business and hoarding tax rate cuts are the worst possible policy direction.  The lower the business tax rate, the more incentive to cut costs and workers, and the greater incentive to avoid expansion investments and instead harvest profits (high tax rates mean high tax deductions for spending and investment).  It further lowers the value of troubled companies with accumulated losses, hastening their total shut down.  Unlike spending increases, deficits created by tax cuts do not have a direct GDP impact (no initial 1x multiplier that is added upon by further MGI).
  • A negative VAT/sales tax can be considered for goods that should be encouraged.  For example, education and renewable energy products.  If a 5% subsidy/cash back can increase private sector consumption of those goods by 10%, then with a 75% MTI, the cost of the program on original sales volume is 1.25%, but the benefit on the extra 10% is (7.5%*0.95 = 7.13%).  With just 2% higher sales from private sector a breakeven is surpassed.  MTI increases tax revenue the same for spontaneous private sector spending and investment as it does for deficit financed government spending with the added bonus of not requiring socialized costs to recoup.
  • Wealth taxes are a bad idea because they encourage leaving and decrease the money supply when emigration of wealth occurs.  There is no reason to leave if you make $1M+ where you live regardless of the tax rate.  Another feature of natural taxation is offering businesses tax refunds for local production and not taxing their export sales (negative local profit), but taxing imports at their full sales value (not allowing offshore production costs to reduce taxable profit).
  • Financial transaction taxes are a bad idea.  Even if asset speculation is entirely a hoarder activity with minimal economic value, that minimal economic value is assisting the maintenance of liquid and stable markets.  Those who make 1000 transactions per day help more than those who make 1 per day.  A very good revenue enhancement idea, in addition to the normal hoarding surtax rates part of natural taxation that encourage asset speculators to apply their talents to a "real job" instead, is an additional profit surtax on financial businesses/institutions.  5% is suggested.  These taxes have no interference in trading frequency, and there is no fairness for being taxed for selling for $1 what you bought for $1.
  • To the extent that climate catastrophe is 10+ years away, the benefits of immediate climate action are potentially enjoyed by future generations, and so inflicting an accompanying debt burden on future generations can be a fair offset to the benefit provided to the future.  A carbon tax and dividend is a revenue neutral, and best possible, and only genuinely effective, climate policy.  Due to dividend, a higher carbon tax can be politically supported.  A downside in the policy is that the dividend decreases as the private sector rapidly exterminates the fossil fuel sector, and cause less carbon taxes get collected.   One/best way to eliminate this downside is to offer a fixed dividend, essentially a part of UBI amount, that remains regardless of how much carbon tax revenue falls as a result of fossil fuel extermination.  The incurred budget deficits are justified by the current economic spending stimulated and future benefit of rapid decarbonization.  Decarbonization as rapidly as possible is a planetary benefit, and temperature targets of 1.5C or 2C are in of themselves meaningless, as are promises/commitments in the far enough future (30+years) for total decarbonization.  Atmospheric carbon is permanent. Hurricanes and forest fires are already bad enough, and current temperatures are enough to cause summer arctic soil and sea bed emissions, and to steadily melt land ice.
  • QE (money printing buy buying bonds from the rich) as has been recently practiced by central banks of US, Europe and Japan are horrible policy except for the maintenance of the financial sector and overall support for asset prices.  The beneficiaries of the increased money supply are 99%+ hoarders, as it is only the very rich who play in government bond markets due to their capital preservation features.  They don't invest their fortunes in lottery tickets.  QE provides a surefire way for the rich to get richer.  Using central bank policy to fund a portion of UBI or ULI (unconditional loan income), instead, provides similar benefits to hoarders and the financial system without directly giving the latter ownership of the increased money supply.  The banks and rich get the funds indirectly/eventually, but after it benefits spenders.  The benefits are created without socialized debt.
  • To expand on the negative VAT for education, primary and secondary education costs an average of $12k/pupil/year.  A $10k UBI per pupil and a 20% cashback/subsidy on education spending would be budget neutral for the treasury and education departments with status quo behaviour and operations.  But education can be vastly improved and personalized, and making the students/parents agents in the purchase of education.  The gifted (possibly the greatest potential for future economic contributions) and challenged can benefit from more personalized curriculums than one targeted for the average age-capabilities.  Some education success is attributable to financial stability in the home and nutrition, and a higher UBI may increase educational outcomes even if most of it is spent on non-direct-education needs.  Computers may be worth more than classrooms.  In the DC area, the average taxpayer cost per pupil is $30k/year.  Either there is a very large administration system for the school board, or outrageously high security expenditures are made.  If it is the latter, then we are paying to force students who don't want to be in school to attend, in a way to forces poor outcomes on all of the students.  Another source of education efficiencies is smaller administrative boards.  Giving parents agency lets them choose a particular education philosophy.  Lower school board expenses can directly translate into smaller class sizes for the same budget, or larger football stadiums if that is what the parents/students value.
  • A 75% MTI means that programs such as UBI (funded with surplus tax collections) cost only 1/4 of the amount distributed.  Reductions in crime and healthcare, lower hoarding rates, increased wages, stability to form families and attempt entrepreneurship all contribute to making the MTI that high or higher, but furthermore support program cuts and reallocation of government labour to a private sector demanding large increases in workers.  All of which are great quality of life improvements that make a jurisdiction a fantastic place to live in, raising property values and that taxation base.  Fulfilling conservative desires to reduce the size of government.  Multiplied surpluses can increase UBI further and reduce public debt and interest costs instead of reducing tax rates which are set to maximize MTI
  • Public healthcare is more justifiable than public education.  Giving the consumer agency in healthcare is not helpful if all of the information is provided by the healthcare provider.  The transactional layer adds a level of confusion cost time and decision that may not be of value.  At the margins, a private healthcare sector that offers supplemental options to a public base healthcare sector can provide value.  Universal healthcare has the same core justificiations as UBI.  Your lifetime anxiety levels are significantly improved if your healthcare expenses are covered, and unconditional fixed insurance payments do not count as anxiety reducing.  But, almost as important as stress reduction benefits, are cost cutting/control opportunities/benefits.  The US healthcare industry has a very high hoarding rate protected by lobbying.
Comparison to Keynes work
The Keynes multiplier formula is identical to the first formula in my formula section with the exception that hoarder/spender tax rates are distinguished, and I ignore the propensity to import.  There is no famous equation for MTI = returned tax revenue as a result of the multiplication of fiscal policy.

The case for ignoring the propensity to import:

  1. In a global economy there are no imports.
  2. A rich nation with high imports raises the standard of living in exporting which accomplishes:
  • Creates export markets for food energy and commodities (at least) and potential demand for domestic finished goods and software.
  • Gives poor people in those nations employment opportunity which prevents resentful sentiments if they were to immigrate to your heaven.
  • If your importer nation is a hedonistic heaven and the exporter nation a shithole, then the hoarder class from the shithole may want property and education services in your heaven.  There exists a massive private infrastructure opportunity to develop empty land so as to provide housing for all who want to come to your heaven, and an even better opportunity when they are rich hoarders.
These points guide appropriate housing policy that is a great departure from current terrible policy.  First, the socially optimal housing policy is one that maximizes total land value.  The simcity game formula.  A contrary force to this policy is that hoarder land owners want to maximize their/average developed property values, and doing so means opposing all other development so that those who want to move here are forced to outbid each other for the land owner's property.  Policy that is utterly devoted to hoarders who vote, while doing stupid things to appease the poor's (who vote less) misinformed concerns is what is pursued.

Gentrification, the rise in existing property values, of a neighbourhood is always a good thing for society.  One way to fight/counteract gentrification is to increase the number of stabbings, muggings, burglaries, shootouts, vermin and zombie-themed cannibalism.  These are bad things, but will decrease property values.  Affordable housing through subsidies is an expensive program that always creates a lottery where a few lucky winners who would use market housing instead are given subsidized housing, and often housing mismatched to their needs.  If they luckily get cheap housing larger than they need, this wastes the total subsidized housing stock.

The right housing policy in expensive markets is to let the private sector build to the most profitable high end demand, while the public sector overbuilds market affordable housing that is affordable because it is small and dense, with potentially shared ammenities, rather than zombie infested.  UBI is a massive enabler to expanding total property values. There is no obligation for public sector construction/activities to use "overpaid" union labour and oversight processes with heavy reporting layers.  Public sector construction could double as apprenticeship/training services that provide experience to enter private sector construction.

The point is that construction is a massive economic opportunity for expanding population, and transitioning to a renewable energy economy.

Going back to Keynes, times have changed since his work for kings and the genesis of the new deal.  There are political forces that embrace every deficit project as though it is a massive employment program in a high unemployment economy for its Keynesian effect, and use this as cover for kleptocracy.