tag:blogger.com,1999:blog-24679284927937190772024-03-14T00:30:11.766-07:00Natural Finance - 21st century venture capitalNatural Finance can provide venture capital less expensively, serving management's freedom or communal ambitions, and investors' desire to actually be repaid independently of management's future ambitions.<br>
Natural forces lower financing costs to the most appropriate (natural) level for any project.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.comBlogger124125tag:blogger.com,1999:blog-2467928492793719077.post-84430157840415710372022-11-07T07:34:00.022-08:002022-11-17T06:59:56.824-08:00The invention of truth<p>This paper proves the existence of God logically... And everyone will agree this is a terrible thing. A more accurate description of the paper is that it proves a constraint on God, and constraint on the will of God, as a corollary to the axiom: if God exists, then God is good. Theoretically, this should only make evil people angry, but stubbornness of beliefs has an emotional attachment.</p><p>The title is an homage to The invention of lying (movie by Ricky Gervais). There will be a part 2 with film and culture references, but this paper will try to be more strict/serious.</p><p><br /></p><p><b>Blaise Pascal and the economics of God</b></p><p><a href="https://en.wikipedia.org/wiki/Pascal%27s_wager#:~:text=Pascal's%20wager%20is%20a%20philosophical,either%20exists%20or%20does%20not." target="_blank">Pascal's wager</a> is fundamentally that if loyalty to Church (different from loyalty to God) costs very little, and the payoff is potentially eternal reward. The economics of God definitely exist. Other rewards from loyalty to Church include feeling hope, experiencing the joy of spiritual fulfillment, overcoming fear of social disapproval for insufficient Church loyalty, and enjoying group community/identity for a group superficially supportive of the general good. These describe the economics for buyers of Church adherence.</p><p>The economic sellers of Church adherence are a hierarchy of Men serving Church interests. Capturing your soul is a monetizable/asset, while the liabilities of providing ponies from prayer and eternal mansions are shifted to an invisible sky fairy. The economics of selling Church adherence incentivize scamming where the Church, as an intermediary, replaces/pretends to serve God with service to, or actually aiding, demonic influences of oligarchs and ruling classes. When you sell your soul/loyalty to the Church, you empower it to Churchsplain your suffering as being caused by a mysterious God's will. There is massive scamming opportunity for the hierarchy of Men controlling a Church to serve profitable rulership interests at the expense of their adherents.</p><p>Pascal's wager risks the small cost of your loyalty/soul for no benefit. But instead risking the further cost of eternal damnation instead of eternal reward. Whether or not you are responsible for your own foolishness in adhering to demonic evil, your soul has been pledged, nonetheless to Satan, by the Church brokers. Not that the existence of a devil is needed to explain evil in our world, but the greatest trick the devil ever pulled is deceiving society into believing that he is God. The business model of delivering your soul to an evil order is much more profitable than valuing humanist freedom. There is only money in selling slaves. No direct money in freeing them.</p><p>Media that promotes a nationalist order is a modern and more effective replacement for the Churches' selling of souls to the nationalist order. Even when left and right perspectives are balanced, and the democratic framework extolled, a nationalist order where things will stay the same is ensured. Media serves evil, by demonically framing national opinion within evil alternatives.</p><p>The proof of God in this paper fully recognizes providing an economic payoff to God. The payoff of God is providing heaven on earth, low scarcity world with ample easy opportunity for all humans rather than just a heaven on earth for ruling elites, and hell on earth for the rest. Any eternal extra planar/dimensional rewards are a bonus cherry only available to those who adhere/support policies that a good God must want for humans. There is no need to prove the existence of the bonus cherry prize to prove God's relevance (relevance implies existence). The God being proven is a supernatural force that guides towards good and against evil actions independently of the human consequence of being caught or the PR value of public acclaim. The following 4 sections define God in a clear definitive structured-hierarchical-mandate way, whose consistency could not be reconciled with 20000 sentences from scripture. In the end, God is presented here as a more consistent expression of human love than spiritual hope and joy given to those who abstain from sin, and an economic rationale is proposed to accept this God as the only possible one true God.</p><p><b>Truth</b></p><p>Ethics must be in the form of a mandate hierarchy. The top mandate must be absolute. The 2nd mandate must be absolute while never violating top mandate, and each subsequent mandates are absolute as well, while subservient to mandates above them.</p><div>Truth is such a primordial ethics mandate that God himself must be identical/slave/bound to truth. If God is not evil, then he must demand truth, and be truth. If God is evil, or wants us to be evil, then he is not worth respecting. Any loyalty placed above a loyalty to truth is a loyalty against God, and a necessarily, loyalty to evil.</div><p>Implications of common violations of these axioms:</p><p>"God blesses our tribe" (no matter what lies/evil our tribe commits is direct corruption of God)</p><p>Loyalty to a Church that includes a mandate to deliver souls to demonic lying Conservative/Republican rulers that serve an evil oligarchy is a loyalty against God.</p><p><br /></p><blockquote><p><b>Humanism </b>is maximizing the sum total of all individual humans' happiness, including the sustainable happiness of future humanity. An act that improves any small/single subset of humanity is humanist as long as it doesn't disenfranchise another human.</p></blockquote><p><br /></p><p><b>Humanism</b></p><p>Humanism defines Good, and what good God wants for humanity. Truth/God eternally transcending through generations means Truth/God will still be relevant in future. Environmentalism is an essential component of human sustainability, but humanism must trump environmentalism as priority. Humanism must trump tribalism. Humanism is the 2nd prime loyalty (after truth) to God. Loyalty above humanism or truth is loyalty to evil.</p><p>Individual acts of humanism include self actualization, employment, consumption, production, kindness, having/raising children, and helping structure the world to be more conducive to human prosperity and sustainability.</p><p>Structural/social humanism is a world that provides all of us opportunity to "easily" thrive. A world/society that supports you in meeting your "goodness quota" of 28 pregnancies with octomom fertility treatments = 224 births, is a humanist world the result of concerted social action to make the world more humanist. While a 224 children quota is extreme, and difficult to expect sustainability if all women quickly adopted it, a world that is too harsh to consider the effort needed to raise some children is a world that is too harsh, and perhaps lacks the technical progress needed to sustain higher population. A world that lacks the hope for opportunity that will affect parents and their potential children.</p><p>The most demonic anti human acts are manufacturing war to coerce arms sales and profit from food and climate destroying energy scarcity. Such evil seeks/claims blessing from God, but we/humanity should not tolerate such victimization.</p><p>Humanism is the answer to the question "what policy is truly good?" Tribal rulership striving to diminish others/humanity through economically destructive action/proxy war that even harms their tribe, is an obvious distortion of humanism for tribal rulership gains/power. The importance of humanism to God is primarily in binding rulerships from evil. Where Church/Media encourages/unopposes the evil, they participate in the evil. Tribal enhancement policies are entirelly humanist where they don't depend on opposing tribal diminishment.</p><p>If you love God, you must love humanity and society subsets of humanity and its sustainability, because God loves humanity. God cannot just be concerned with only your narcissist prosperity. If you already respect humanism, independently of a faith/certainty of God, then you are already good. Humanism as the clear definition of good, under God or not, is a basis to provide a clear definition of evil, and actionable opposition to evil.</p><p><br /></p><blockquote><p><b>Freedom </b>is a non-pejorative synonym for selfishness. The right to choose self-interested behaviour.</p></blockquote><blockquote><p><b>Freedom under God</b> is selfishness constrained by truth and not harming other people. Including not preventing social structure that improves freedom of others. Those born on 3rd base, 2nd base, or first base, do not deserve additional privileges over those whose lesser opportunities require taking an "at bat". Those who have seized the opportunity to start on base, need not restrain the opportunities of those at bat to bring them to home/increase their own prosperity.</p></blockquote><p><br /></p><p><b>Freedom</b></p><p>As good is defined as humanism, neutrality is freedom. The right to refuse maximal humanist productivity efforts is necessarily humanist, because the alternative is coercing productivity, and the coercion is harm. Neutrality of freedom under God means that every action in between doing nothing (neutral) and doing good is permitted.</p><p>Valid reasons to refuse coercion for good/productivity include an unfair world where evil prevails. A world structured to threaten you with starvation and cold if you do not find a sufficiently kind master to submit to. A world that cannot sustain sufficient hope for parenting endeavors. </p><p>Freedom under God prohibits shaming those who are on the neutral-good spectrum for being insufficiently good/humanist. Behaviour that is respectful of God, is defined as not evil: ie. behaviour on the neutral-good spectrum. Equaling/synonymizing freedom and selfishness, and encouraging humanist behaviour through raising the awareness of social and personal benefits of humanist behaviour is the acceptable action for promoting humanism. Condemning/shaming selfishness that imposes no evil on others, is an act of coercion, that cannot be humanist, even if real humanist progress could be achieved through the coercion. </p><p>Financial independence is also a fundamental definition of freedom. If we took a survey for the question "Would you like to be employed in a function that serves to defraud consumers or investors, or secretly pollute the world killing neighbours or future generations?" The only other non-demonic reply than "no", is "yes, if the position pays a lot more than non-evil work." The reason that this is possibly a non evil/demonic answer is that financial desperation makes survival trump God. The selfish need to survive is an understandable violation of God/humanism. Even a wealthy individual can depend on the financial assets/income of a business. That greed/dependence requires obtaining sycophantic minions to fulfill the wealthy business owner's dependent financial needs.</p><p><br /></p><blockquote><p><b>Demonism</b>: The advocacy and pursuit of evil Justifying/implying it as good and necessary.</p></blockquote><blockquote><p><b>Indignity/Undignity</b>: Service to evil. Balanced between: The freedom to say no, the awareness of harm done to others, and the rewards for doing harm. Dignity becomes not the lack of indignity, but the pride of doing good.</p></blockquote><p>A root of most evil is undignified sycophancy to organizational hierarchies that do harm. The lack of individual freedom to say no is necessary for this evil. Democracy has so far been ineffective in stopping "evil prevails".</p><p><b>Minimizing disorder</b></p><p>Property rights are necessary for prosperity/flourishing. Constructing and believing violence, theft, fraud, and pollution are wrong and should be structurally deterred is unanimous. A professional police force serving that deterrence is a viable path to maintaining civil order, and preventing disorder. Food, healthcare, emergency security are important security too.</p><p>Rulerships require masses of "balanced" desperation in order to ensure a supply of soldiers and other slaves to enhance the strength of the rulership. Democracy has so far been ineffective in limiting rulership evil because the prize of political victory is greater, the greater the rulership power. Divisive championism (elect me and your special interests will be promoted) is the only basis for political war because political war requires effort and support, and championism can promise payoff.</p><p><br /></p><blockquote><p><b>Corporatism</b>: The supremacy of business interests.</p></blockquote><blockquote><p><b>Capitalism</b>: The supremacy of the investor class and capital. Corporatism has significant overlap with investor class interests. </p></blockquote><p>It is the supremacism of capitalism and corporatism that is evil. Not the investment and production it funds. More production and investment is motivated instead through consumerism derived from less oppression. </p><p>God is defined by principled hierarchy of Truth-Humanism-Freedom. Diminishing the evil inherent to powerful rulership hierarchies is the principal act of devotion to God. Security cannot be overlooked, including demonic manufactured instability/divisiveness made against God. Where political battles over rulership control manufactures divisiveness and hate, it in fact manufactures disorder. </p><p>Minimizing disorder, as this final clause of the God mandate hierarchy, is the necessity to significantly weakening current rulership power, without eliminating the peaceful stability of society. Peaceful harmonious social stability is the goal of society. Oppressive warmongering/thieving rulerships are not.</p><p><b>Unconditional Income (UI)/Freedom dividends</b></p><p>Also called Universal Basic Income (UBI) and Social Dividends. UI is social policy consistent with/devotion to God.</p><p>UI eliminates poverty and homelessness. It eliminates crimes of desperation. UI provides the freedom to say no to underpaid or evil work, and lets those who are eager to say yes to work, to find well paid work easily. The consumption boost of UI provides more work and more rewards to share between those who provide and own the work. Instead of a school to prison pipeline, youth can hope for a bright future. UI provides family planning optimism, including your children having a future where they will receive over $500k in their lifetimes. UI provides everyone the ability to afford academic or vocational training, including relieving parents from funding young adulthood. UI is far more conducive to production output than welfare systems by not rewarding the poor/disabled/old only if they stay poor.</p><p>Financial stress amplifies mental health harm and mental deficiencies that amplify harm and abuse to self and others, including harming family and child development. It drives people to crave outrage media and to limit others' freedom. Financial stress or constant mental state of outrage at everything, distracts from the evil and misery inflicted on people by rulership, politicians, and oligarchs they serve. The subservience and devotion to evil is manufactured by a harsh world that people are manipulated into serving.</p><p>An annual certain UI reduces the need for personal savings. Extra spending from the near wealthy means that the very wealthy get richer through their consumption, or good investment opportunities are available to the near rich. More spending, less savings is awesome for investment environment. Lower risk for landlords, banks, and other creditors, and lower risk for theft insurance all significantly reduce parasitic pressure on people from those sectors (who need to be paid more for higher risk).</p><p>Freedom dividends are easily affordable, by e<a href="https://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.html" target="_blank">qualizing business, investment, and work income taxes</a>. Work income taxes are lowered compared to today by this process, encouraging everyone from investor class to entry level employees to earn more from work. Funding from program cuts diminishes rulership evil, and false championism of politicians who will be bribed or berated out of fighting too hard to apply the inconsequential band aids to oppression they falsely champion as a cure. Funding from carbon taxes accelerates human sustainable survivability transition while still keeping fossil fuels affordable at any tax rate. (A $10/gallon gasoline tax, with US consumption of oil at 1000 gallons/capita would fund $10k per person/family member in UI/carbon dividends, and by reducing gasoline demand, would bring the pretax cost of gasoline down to $1/gallon. Saving the average user $3000-$4000 in surplus income. Huge opportunities to save more by using less gasoline.)</p><p>A society that funds social dividends/cash to citizens first over rulership programs/power, provides a perfectly self-adjusting collective and individualist balance between growth/work, leisure, and inflation. Social dividends allows pragmatism to prefer $2000 additional cash/year to tax payers over $500B in defense budget items.</p><p><b>Scarcity</b></p><p>A sufficiently heavenly paradise is the blue lagoon (film). The work requirement to hunt and gather for survival is not a burden when resources are ample and sustainable. The permissionless freedom is heaven. A mutually beneficial relationship with a compliant and adoring spouse is heavenly and possible too. But compliant slavery in service to all your needs is also sufficiently heavenly, for you. Heavenly lifestyles on earth are available for those who can afford to buy compliance and buy/sell permissions.</p><p>The joy and hope instilled by hoping devotion to God/Jesus/Mohamed will lead to a low scarcity after life is a permissible hope for additional payoff for the devotion. God just demands that following/idolizing your Church's promises of afterlife is prioritized below Truth-Humanism-Freedom.</p><p>A low scarcity world is easily achieved through technology/automation progress. Clean renewable energy is the possibility to manufacture unlimited energy. Industrial policy that makes such energy abundant means cheap energy for society, compared to protecting climate terrorist oligarchies that depend on energy scarcity for profit and power. US rulership manufacturing Ukraine proxy war against Russia is manufacturing scarcity and climate terrorism. Denying China technology access is a significant scarcity promoter (and prelude to further calamitous war against China), destroying technology's advance by limiting revenue/production capability.</p><p>US rulership power, and their weapons and fossil fuel oligarchy control, is directly terrorizing Americans and the world into a path towards hell on earth scarcity. Blaming US rulership power for being the worst rulership among all rulerships is the natural answer, because it has the most power, and the most power to restrain its evil in exchange for requesting others' restraint of evil.</p><p>Strong absolute US/Global rulerships will turn post-scarcity advances of automation into extermination of the slave/serf classes, using divisiveness to have the slaves exterminate each other. Automation replaces the need for slaves and their existential lives. Only democratic ideal power, nominally held by the slaves, can prevent the masses from elite controlled rulership extermination and hell on earth. Continued absolute rulership sets a direct inescapable path to Robocop managed ghettoization followed by extermination.</p><p><br /></p><p><b>Nationalist/identity hate </b></p><p>Conservative political support requires manufacturing hatred and enemies. "The real patriots support a war on sinners and minorities". Victory is measured in harm achieved and normalized, regardless of (LBJ's) pocket picking costs to the minion zombies. It is easy to add nationalist hatred points as a layer on other hatred. The oligarch/elite demonic sponsors of conservatism do so to protect their financial/power empires, prevent innovation, and sell war.</p><blockquote><p><span face="verdana, arial, helvetica, sans-serif" style="background-color: #fafafa; color: #222222; font-size: 14px;">“The national government will maintain and defend the foundations on which the power of our nation rests. It will offer strong protection to Christianity as the very basis of our collective morality. Today Christians stand at the head of our country. We want to fill our culture again with the Christian spirit. We want to burn out all the recent immoral developments in literature, in entertainment, and in the press - in short, we want to burn out the poison of immorality which has entered into our whole life and culture as a result of liberal excess during recent years.” - Adolph Hitler, 1933</span></p></blockquote><p><br /></p><p>Ukraine nationalism has fanatical roots in anti-Soviet identification, morphing now into anti-Russian fanaticism. The US empire is first a foremost managed by an unelected US weapons marketing team, funded by conservative/nationalist oligarchs profiting from the only way to sell weapons, and supporting both political parties harmonious weapon sales delivering power. Funding nationalist fanatics to provoke and perpetuate a globally devastating war. EU members, as US puppets, further allocate their unelected EU representatives on the basis of their devotion to NATO/US loyalty. Media service to US empire is further disenfranchisement of the world, including the golden billion citizens. </p><p>Nationalist hate is anti-God in that anti-human fanatical strength "deserves" power and rule over disloyal slaves captured within a border. That this is a useful tool for US empire to sell weapons to other CIS states, or facilitate a path for war on China, is not a humanist God endeavor, and incompatible with a manifest destiny blessed by God.</p><p><br /></p><blockquote><p><b>True Liberalism</b>: The freedom and equal opportunity for all. A centrist value approved by God.</p></blockquote><p><b>Labourism, Zionism and Feminism</b></p><p>While capitalism and corporatism are categorically evil for their supremacism, oppression, competition/production and innovation stifling, and specifically for its control of rulerships to advance evil war as marketing operations, Labourist supremacism is not the answer. Higher taxes, rulership program cost cutting, and social dividends is the answer. Unions may improve the life of their members, but they do so by limiting the number of members. Unions can also have enough power to gain "house slave" status from regulations/programs that make union membership more appealing to the "field slaves". An example of this is Unions in NY state blocking universal healthcare for that state. The freedom of social dividends is better labour empowerment than socialism/unionization's fight against capitalism.</p><p>Feminism and Zionism (defined with same parameters as capitalism above) are supremacist movements, not only for going above/beyond equality and social justice pursuits, but controlling the absolute supremacist power of being protected from criticism. Apartheid, terrorist state, Israel, pursuing a final solution on exterminating Palestinians with bipartisan deep state political control of an approving US condemns criticism as anti-semitic. Believing every woman's abuse complaints as incapable of lie, or preferring women for job and academic applications is supremacist evil whose criticism is deflected as misogynist. Capitalism and warmongering murder also have evil speech protections where criticism is dismissed as Communist or paid Russia advocacy. God does not permit this supremacism.</p><p>Oversensitivity/sensitivity laws/structure protects the supremacist powers that has achieved immunity from criticism. Creating sensitivity safe spaces, and laws to enforce them, privileges those who are permitted sensitivity assertions. It further empowers disinforming governments to crack down on "misinformation" that criticises them. While demonic Republican evil serving corporatist oligarchy climate destruction needs to animate misinformation and hate as a populist distraction to destroy America and the planet, their political opposition must champion their own supremacists, while still taking funding from the same or opposing oligarchs.</p><p>Diversity as tokenism provides valuable societal/organizational diversity of perspective. Racist/sexist exclusion of qualified opportunity is evil both in preventing tokenism diversity, or in seeking equality of outcomes, through suppressing the most talented from opportunity. Academic admissions should be 42% female instead of 60% if an IQ of 115 is a gatekeeper. Feminist supremacism should not influence academia. If the top 0.6% (iq of 140) of intellectual talent are to have the opportunity to help humanity the most, then 29M of those 40M are male. Blocking them from employment opportunity, or forcing hostile/sensitivity work environments on them, harms humanity. The UBI/high tax model ensures that fortunes that are made either helping or harming humanity are taxed enough to help the rest of humanity/society's opportunities and freedom. Opportunity means talent is set free to maximize humanism. Taxes/freedom dividends just ensures that the benefits of humanism are shared, and the talented cheered on.</p><p>Corrupt democracy and corrupt liberalism form a basis for justifying warmongering murder for corrupt and evil objectives. Justifies sycophancy of similarly corrupt allies to evil warmongers. People are too easily hypnotized in picking a good side in war, ignoring the necessary evil of "the good side" manufacturing/insisting on the war.</p><p><br /></p><p><b>Proof that Church and Media serve evil</b></p><p>The product of both Church and Media is the flock it controls. Delivering fleecings and meat to demons is a more profitable, sustainable organizational model, than delivering freedom and happiness to the flock. Serving "Satan"/lies to the flock is much more probable organizational mission than Truth or God. The clear incentive to serve evil while pretending that it is God is the evil being blessed.</p><p>Judaism and Church-allied Nationalist hate share the same fundamental evil of dangling a promise land for the in group, and permitting all evil against the out groups. It relies on an absurdity of an evil god willing to Champion evil against its human creation because he's adopted a culture/sports team to cheer for, and war is entertaining for him. God championing your tribe is purely and simply rationalizing your evil by lying that it is good/blessed. </p><p>War is ultimate disorder. Church and media supporting its manufacturing and legitimacy is evil. Media, as Church, should have a responsibility to Truth, humanism, and freedom instead of being an agent of rulership power in its destruction.</p><p><b>Truth-Humanism-Freedom as a higher force</b></p><p><span style="color: #222222; font-family: inherit;">Principle because it is principle, is circular. "Murder is wrong because murder is wrong" is a proof of God. The circular aspect needs a higher force to validate it. The alternative escape of God is "Murder is wrong, because that is the right thing to say, and saying so will bind you and protect me, and you better not fall asleep, and if I kill you, please God, protect me from revenge/investigation." is appeal to lowly, unprincipled, social forces to protect manipulative evil lying power to protect the liar without binding them.</span></p><p><span style="color: #222222; font-family: inherit;">The answer to why principle (universal equal binding for equal protection) is important, is that it is important because there is a higher force that makes it important. </span><span style="color: #222222;">The higher force is stronger the more people believe/respect the higher force. The force is omnipotent and eternal. Truth is omniscient.</span></p><p><span style="color: #222222; font-family: inherit;">People tend to want to accept or reject God as a being with full telekinetic control of every atom in the universe. They are all angry that proof of God as a being is not the claim of this paper. If God created Gravity, an omnipotent, eternal force that never rests or needs refueling, this is still a supreme being creating a higher force. Creating the higher force of Truth-Humanism-Freedom, is an eternal omnipotent force, even if like rockets or jumping can escape gravity, lies are an effort that can escape truth.</span></p><p><span style="color: #222222; font-family: inherit;">Proving God as a Being is impossible. </span><span style="color: #222222;">There is a higher force for Truth-Humanism-Freedom. It is a force I, and believe most others, feel despite potential profit motives from lies, coercion, murder, and theft. The existence of the higher force is enough to prove God, even without evidence that God is a being. The force is entirely consistent with God, if he were a being. If faith or absence of faith determines for you that God is or is not a being, it doesn't negate the higher force that exists. Response to guidance prayer from a being or not will still be according to the higher force of Truth-Humanism-Freedom, if there is a God listening. So, understanding the being of God is enhanced by understanding Truth-Humanism-Freedom, and protecting yourself from demons who give you a different understanding.</span></p><p><span style="color: #222222;">The proof of God being offered here, is that independently of any supernatural powers of a being-God, or eternal gifts promises, the higher force of Truth-Humanism-Freedom is the true reflection of God's principles. The higher force exists, but disproving God involves proving a better principled higher force. A terrible, reprehensible, candidate that currently holds the Church-gatekeeped understanding of God in the US is US-Empire-Manifest-Destiny-ism as God's principle/blessing. Placing it above humanism, and any freedom to escape the rulership's ambitions. Diminishing Russia and China may greatly enhance US rulership power, but also cause massive human economic destruction, including a diminishment in American prosperity through recession and housing crash of higher interest rates. Americans further risk nuclear weapons attack. Truth-Humanism-Freedom is about enhancing Americans' prosperity through peaceful honest means that likely involves enhancing global prosperity instead of global destruction. The principles that permit civilized peace, and better civilized peace once a path to low/post scarcity can be understood, is the human growth/prosperity that God wants for humanity. God, as a being or as the eternal force of truth, does not want unprincipled tribal supremacy to destroy humanity. God has already been constructed. The relevance of the construction of God, completely independent/irrespective of the actual "physical" presence/being, must respect the will of God as if he were a being that wants good for humanity and not evil.</span></p><p><b>The US Republican party is demonic filth</b></p><p>Subhuman shitstain, Mike Pence, by declaring that Americans have "no freedom from religion" is saying that Americans should be punished for not obeying his Satanic death cult. It invalidates the freedom OF choosing a non-Satanist death cult as an observance of God.</p><p>Demonic anti-human, genocidal American/Human baby suppressing, climate terrorist fossil fuel oligarch extortion supporting shitstain, Tom Cotton, by denying global warming, and vowing the supremacy of fossil fuel profits and climate destruction for our lifetimes, wants to doom humanity while extorting them to their last breath. The entire Republican congressional delegation blocking renewable energy expansion is them blocking the nearly limitless energy path that saves the planet, and blocking energy that can displace fossil fuels and so make them cheaper.</p><p>If you vote for Republicans in 2022 because of high gas prices or outrage over crime/immigration/trannies, then you will have high gas prices and outrage in 2024. The oligarchs that enslave you will keep funding your enslavement. There is no economic reason to invest in more fossil fuel development if its uses are rapidly dwindling. There is only economic incentive to maximize extortion, while whining in order to support an extremist evil oppressive party who will provide subsidies for more oligarch and capitalist extortion.</p><p>Excommunicating, ostracisizing, and demonizing the Republican and conservative parties that share their evil, such that they are exterminated from public policy relevance, is needed in order for constructive political/social reform. Nationalist/Religious hate groups allied with Republicans actively demonize hatred of liberals. It is the wrong response to be defensive or dismissive of such attacks. It is also the wrong response to let "Republicans own the construction of God"</p><p><b>Proof of God conclusions and attacks</b></p><p>Good must be defined as social/humanist outcomes, and good is only possible with freedom. Deceiving the slaves/oppressed into an illusion of freedom is not freedom. Freedom/abundance of opportunity motivates good/production. Oppression/scarcity motivates evil and rebellious disorder. Where strength trumps Truth/God for self justification, then all murder/theft/lies/evil is justified merely by winning, including the disorder of harming the current winners. </p><p>God focused on social/humanist sustainability, progress, and happiness is consistent with an eternal god for all. An individualist/sin based God is a manipulation technique to bind the sheeple from murder and theft, while protecting the rulership (without binding them). The only necessarily evil sin is wrath. The other sins are falsely used as slavery production justifications. Mother Theresa may have been motivated to do good by the vanity and pride of canonization, envying the other saints. An athlete/business engaging in fair competition, will train/work hard with greed to win all competitions, perhaps to fund their gluttonous ice cream addiction and lustful dating ambitions. Sloth/envy allows us to choose consuming others work/entertainment while further benefiting them by not competing against them. Where Church can successfully market religion as an individual battle against sin, they can only attract psychotics who despise their nature and seek absolution by signing up.</p><p>An attack (Dostoyevsky + evil) on freedom is that most people have a need to follow and serve. Following/serving good is a more attractive option than following/serving evil. Evil justifying the deception of their minions as "natural dependence" is simple evil. For anyone who prefers obedience/service, the freedom of others enhances the value of your service to those needing to buy your loyalty. Similarly, "meaning of life requires suffering" justification for suffering would be greatly enhanced through the maximum disorder of deconstructing property rights, and 99% income tax rates. Protecting rulership elites from suffering is inconsistent with "suffering as a principle".</p><p>Instead of sustainable humanism, it would be a possible ethical position to <a href="http://www.naturalfinance.net/2012/09/should-we-vote-to-end-civilization-in.html" target="_blank">democratically destroy civilization in say 2100</a>. It would satisfy truth and democratic will to inflict anti-sustainable despair on the future birth slaves. Despaired disordered hellscape would be likely well before 2100, but after most older voters life expectancy. While there is an ethical basis for choosing this only with honesty, it is still evil, and clearly against God. Anti-sustainable evil of energy and other scarcity and march to war with Russia and China will be done with lies instead.</p><p>A probable truth is that slavery can produce more economic/birth output than freedom. Total human output increased, but for the benefit of a few. Calling slavery consistent with God is consistent with all disorderly chaos involved in counter-rebellious insurrection to enslave/eat the oligarchs. Only principle is consistent with God. Slavers claiming God to bless their ownership/position/victory because they are special individuals worthy of ruling invites the same unprincipled claim by whoever topples them. Should God be a fate that punishes you with pregnancy and economic suffering of child obligation for lust?, or should God be a force that promotes society to want, including the sustainable economic empowerment of people, to have children as the greatest expression of individual and humanist wealth?</p><p>Constructions include marriage, rulership legitimacy and fiat money. God exists as a Truth-Humanist-Freedom hierarchy. Religion constructs God independently of his nature/existence. Where religion allies with evil in making a construction of God that has loyalties higher than Truth/Humanism/Freedom, those religions' legitimacy must be deconstructed/destroyed. Where this paper is a messiah/2nd coming of Jesus/Mohamed, an expectation that the 2nd coming would congratulate all the religious on their perfectness, perhaps with the only advice to buy more idolatrish crucifixes and rosaries, was not reasonable.</p><p>If God does not materially exist in any dimension, constructing it still happens. A construction of Truth-Humanism-Freedom is the rational economic construction that brings abundance and prosperity to earth. Atheists and Agnostics should participate in the construction rather than throw away their democractic right to influence the construction. Letting only evil vote is an evil corruption of democracy. For those who love Jesus, a Truth-Humanist-Freedom-Messiah hierarchy is the only valid possible interpretation of the Messiah's speech, and only path to heavenly eternal paradise is to subjugate your adoration of the Messiah to its appropriate priority. An earthly future heaven of abundance is an earthly hope to have children, and if reincarnation is an adventure option within heaven's <strike>kingdom</strike>, then a more pleasant eternity of more abundant options.</p><p>Economic rationality is truth. It is not an imposition of freedom to impose economic rational solutions that benefit the whole of society even if individuals are too stupid or possessed to understand their benefit. Under <a href="https://en.wikipedia.org/wiki/Original_position" target="_blank">veil of ignorance</a>, "thou shall not kill" binding you and everyone else, protects you from everyone else, saving you ultimate cost in that protection while binding a small cost in your freedom to do evil. Freedom dividends paid from income taxes, binds a cost on those who freely choose/achieve success, provides a net transfer to those who are less successful-- a greater benefit to them than the cost to the successful -- while enhancing the success of the successful as money will flow back up to the working/rich as the poor spend all of their money/wealth. UI further constrains rulership discretionary power/evil/spending. It is not an imposition on freedom to impose a construction of true God that leads to prosperity, abundance, freedom and harmony.</p><p>Demonism exists independently of God. It is the nature of evil to use all tools to enhance their evil including distorting God to bind their victims. Accepting your suffering as fate while searching for meaning in/pleading your suffering to an invisible sky fairy, is the evil behind your suffering controlling you. It is acceptance of demonism. Demonizing demons is as important as accepting God to limit/eliminate the prevailing of evil. If a construction of God can never satisfy those who refuse to consider God, demonism as defined here, exists pervasively without need for any construction. Opposing demonism, or appreciating that it is unhelpful/unwelcome, is identical to accepting God.</p><p><br /></p><p><b>Path for society's freedom and elevation of God</b></p><p>Lobbying Churches to accept God as Truth/Humanist sustainability/Freedom/insert-here hierarchy will divide them into God and demonic agents of rulership evil. Excommunicating Republicans who corrupt God will disempower corporatist/capitalist oligarchy from oppression's legitimacy. Judaism can be made inclusive of humanity in quest for promiseland. Islam can delegitimize their rulership's power and their rulership's alliance/tolerance for US/Zionist empire.</p><p>Media needs to respect Truth more and US empire less. Needs to avoid humanizing and platforming Republicans. Needs to highlight the economic destruction caused by Ukraine proxy war on Russia. Needs to highlight pragmatic needs of citizens over the rulership's ambitions and control. There is a natural media self interest to promote citizens freedom and prosperity through UI, because advertising demand would shoot up as business would need to inform a broadly wealthy consumer base how to give them their money. Media that needs sponsors to oppress citizens to their rulership masters is vulnerable to sponsors not wanting to be associated with evil.</p><p>Misinformation handling is difficult. Trump lied/lies constantly. So do all governments. Well funded political misinformation is programmed to reach/outrage the right bubbles/filters. Programming people is "a science". While much misinformation is disorderly, divisive, and purely intended to destroy society, the empire's disinformation is theft and oppression. Empire/rulership subservient media determining misinformation can be disinformation. Censorship is an inappropriate means to deal with misinformation, because the censorship can be disinformation. Accusing misinformation of being misinformation is the best/only free path. God (truth/humanism/freedom) and the intolerance for demonism can help.</p><p>Tech companies, and the vast majority of business and consumers, and all labour all benefit far more from widespread prosperity than from slavery or empire. Very few non-government/church institutions require desperation to prosper. Tech companies, specifically, were born in a culture of "don't do evil", yet have become arms of the US empire. Established tech companies may want to gatekeep innovation, capturing employees who have no other prosperous future than to submit to them, and so oppose UBI on that basis. At the same time, UBI means massive sales growth and massive leverage opportunities of existing and growable talent pool, whose mothers will always be proud if their child is hired by tech giants. US Empire's desperation war on China is a massive limitation to global progress and innovation, amplifying the global economic destruction of the proxy war on Russia. It is critical for everyone who doesn't want poverty, collapse, violence and death to disempower rulerships before they cause collapse as a means to maintain empire.</p><p>The Forward Party, led by Andrew Yang (supporter of UBI, but lacking the full passion/understanding that UBI deserves), has the very sensible immediate priority of reducing divisiveness through election reform and unified political primaries. While having more moderate candidates lowers the fear of fascism, and then lowers the left's need to rally behind the most neo-con warmonger candidate in order to achieve victory over domestic hate and fascism, moderate candidates can still bring problems. Moderate republicans will still vote for climate destruction and energy scarcity. Moderate politicians in general are more likely to support the Empire's strength and only listen to weapons manufacturers and capitalist supremacy lobbyists for policy ideas. The centrism of populist/humanist UBI is not the same as the centrism of Oligarch serving empire strength, and moderate politicians still need a massive war chest to win. If the Forward party adopted God, it would be very forward of them.</p>Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com3tag:blogger.com,1999:blog-2467928492793719077.post-6808132750415729372021-03-31T06:47:00.000-07:002021-03-31T06:47:03.860-07:00Bitcoin is a better investment than bonds or gold -- new charts<p> Quicker post than usual confirming my <a href="http://www.naturalfinance.net/2017/12/bitcoin-is-worth-more-than-gold.html" target="_blank">early 2018 post on the promise of bitcoin</a>. The title was confusing because unsophisticated readers would understand only 1 bitcoin vs 1 once of gold, though "worth more" was a reference to the value of all of the bitcoin compared to all of the gold. All of the major arguments for bitcoin were made then and are still valid today.</p><p>The major thesis of this paper is that for the next 70 years, bitcoin value will at least double every 4 years. This schedule is premised on the mining reward adjustment (halving) that takes place every 4 years, that value equals utility and technology and adoption increases utility and value.</p><p><b>Charts and graphs</b></p><p>The charts in this paper are calculated from daily data provided at <a href="https://www.blockchain.com/charts/market-price?showDataPoints=false&timespan=all&show_header=true&daysAverageString=1&scale=0&format=csv&address=" rel="nofollow" target="_blank">blockchain.com</a> from August 20,2010 to March 28, 2021. A price of $0.01/btc is added for August 19. Most of their data points are separated by 3 days. The highest price in their data is $57,665 on March 12, and last price in data, $55863.</p><p><br /></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-j2GBZ7tmyD8/YGOmEweDslI/AAAAAAAAAQk/tnMSBzPuq5YPeV4NxciDqmPVWwp-AFNNwCLcBGAsYHQ/s656/bitcoin%2Bhistory.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="346" data-original-width="656" height="266" src="https://1.bp.blogspot.com/-j2GBZ7tmyD8/YGOmEweDslI/AAAAAAAAAQk/tnMSBzPuq5YPeV4NxciDqmPVWwp-AFNNwCLcBGAsYHQ/w640-h266/bitcoin%2Bhistory.PNG" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Bitcoin Price History</td></tr></tbody></table><br /><div>The x axis ticks in these charts each represent 1 year from the start of the data. The x axis numbers are days since day 0 (august 19, 2010). Y axis, price in USD.</div><div><br /></div><div><br /></div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-VzuANFKx_L0/YGOsdxNWrXI/AAAAAAAAAQ8/LIIa6zgK1fg_fwKUXRE-ycxlqqePz3cngCLcBGAsYHQ/s754/days%2Bfor%2Bbitcoin%2Bto%2Bgrow%2B900%2525.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="580" data-original-width="754" height="283" src="https://1.bp.blogspot.com/-VzuANFKx_L0/YGOsdxNWrXI/AAAAAAAAAQ8/LIIa6zgK1fg_fwKUXRE-ycxlqqePz3cngCLcBGAsYHQ/w640-h283/days%2Bfor%2Bbitcoin%2Bto%2Bgrow%2B900%2525.PNG" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><div class="separator" style="clear: both; text-align: center;">Number of days it took bitcoin to increase 900% in price</div><br /></td></tr></tbody></table><br /><div>Not apparent due to scale of first chart, but bitcoin price increased by 10x (900%) very quickly in the first 2 and half years. Averaging under 1 year from any date. In 2013, it would take up to 4 years before a 10x price increase from some dates. This fell back under 1 year for some dates in 2017 and 2020. The data has been stripped of dates where a 10x price increase has yet to occur. The 2017 high will require a $192,000 bitcoin price in order to hit its 10x increase on that date. The very straight line segments towards the right of the graph indicate interpolation between missing (yet to be achieved) and real 10x achievements.</div><div><br /></div><div>The sawtooth pattern in the graph underlies the exuberant/fast value increases that take place every 4 years mostly as a result of the mining reward adjustment. Bitcoin's history of volatile crashes is publicized more than the point that it has grown 10x+ over any 4 year period. Better shown in this next chart.</div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-lXCl4oCZVhg/YGOyqxY-vcI/AAAAAAAAARM/xugyjPcd-igtwBuIVGxzrKzXSf419pliwCLcBGAsYHQ/s594/4%2Byear%2Bbitcoin%2Breturn%2B%2528xtimes%2529%2Bby%2Bdays%2Bsince%2Baugust%2B2010-2015%2Bstart.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="594" data-original-width="563" height="640" src="https://1.bp.blogspot.com/-lXCl4oCZVhg/YGOyqxY-vcI/AAAAAAAAARM/xugyjPcd-igtwBuIVGxzrKzXSf419pliwCLcBGAsYHQ/w606-h640/4%2Byear%2Bbitcoin%2Breturn%2B%2528xtimes%2529%2Bby%2Bdays%2Bsince%2Baugust%2B2010-2015%2Bstart.PNG" width="606" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">4 year bitcoin return on investment (Price as multiple of 4 year earlier price) -start date of spring 2015<br /></td></tr></tbody></table><br /><div>Data earlier than 2015 is omitted because it includes returns over 100000x. The 2017 peak was only a 20x return over 2013 peak that occurred around the same date. There were higher 4 year returns earlier in 2017. March 28,2021 has a 4 year return of 60x. The 2 occasions where the 4 year return on bitcoin was "only" 10x/900%, were short lived, and precipitated strong/steep rallies. These returns exclude dividend/airdrop/forks.</div><div><br /></div><div><b>The case for <a href="http://www.naturalfinance.net/2017/12/bitcoin-is-worth-more-than-gold.html" target="_blank">$8M/bitcoin made in 2017</a></b></div><div>If every other investment is stupid, then 50% of global wealth should move to bitcoin, and $8m/btc reflected 50% of 2017 global wealth. There is no visible end to central bank action attempting to inflate global wealth. The rise of bitcoin does not detract from global wealth, and in fact adds to it.</div><div><br /></div><div>At $100k/btc, bitcoin will approximate gold's total private investment value. Gold will always have poorer transactibility, security and transportability. Gold's supply increases as its price does: Miners get more active, and the "cash for gold" pawn shops recycle the jewelry market.</div><div><br /></div><div>Government Bonds, in the US, will provide a 17% return over 10 years if everything goes perfectly. Less in Europe. There are only 2 reasons to buy 10 year bonds. Either confidence that rates will go down even more, or a simplistic intent to hold the full 10 years. It is unlikely for government bonds today to have returns higher than inflation, and unlikely that rates go down further.</div><div><br /></div><div> It is possible to earn interest on bitcoin that is higher than government bond interest, with or without locking a deposit, as well as inherently being protected from inflation, and as well as having the conservative expectation of 400%/5x gains over 10 years.</div><div><br /></div><div>Stocks are a stupid investment if they are valued for perfection. Facebook can turn into My Space. Apple can turn into Blackberry/Nokia, Microsoft can turn into IBM.... over a 10 year period, or at the end of that 10 year period, concern that it may come true in the next 10 years. Compared to bitcoin there is always more uncertainty around companies ability to 5x in value over 10 years, and as an outsider, you are at a huge disadvantage compared to self dealing insiders and the wealth able to control them.</div><div><br /></div><div>Price variability/volatility of an investment does not imply speculation. Hoping a stupid investment goes up in the shorter term is speculation.</div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-W5awtOOtPq8/YGRuMfb1nJI/AAAAAAAAARU/fBR3LyIe4kQ3d2b-61aa-Cftwegx6vE9gCLcBGAsYHQ/s479/bitcoin%2Bgrowth.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="50" data-original-width="479" height="66" src="https://1.bp.blogspot.com/-W5awtOOtPq8/YGRuMfb1nJI/AAAAAAAAARU/fBR3LyIe4kQ3d2b-61aa-Cftwegx6vE9gCLcBGAsYHQ/w640-h66/bitcoin%2Bgrowth.PNG" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Projected bitcoin high price by year (in thousands) as function of 2021 high</td></tr></tbody></table> <br /><div>Past price appreciation has been much faster than these projections, and its reasonable to hope that price appreciation exceeds this pace in short term (first few olympic periods). But this pace is sufficient to invalidate the attractiveness of alternatives, and the real ultimate limit is global wealth % based.</div><div><br /></div><div><b>Other crypto currencies</b></div><div>Several alternative crypto currencies provide value through different utility, but the utlimate utility is being able to send large transactions securely. The major fault typical of newer projects is centralization and self dealing of their tokens. Proof of stake blockchains are further self dealing to initial card holders, validating the blockchain without effort or "external" cost. Delegated proof of stake further offers mining rewards using other people's money, and may open cheating vectors. Reputable project directors are a vector for geopolitical control and corruption of projects. Bitcoin, on the other hand, has significant external validation cost, that guarantee security and a price floor, and no geopolitical control vectors.</div><div><br /></div><div>The stable value of alternative crypto is relative to bitcoin. Many projects are worth using due to their utility, especially DEFI disintermediation of financial services, but a relatively small allocation is advised.</div>Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com63tag:blogger.com,1999:blog-2467928492793719077.post-6825298862226050632020-11-11T09:37:00.001-08:002020-11-11T09:44:17.888-08:00Democratic strategy for Senate control and beyond<p> The 2 senate runoff elections to be held Jan 5 2021 in Georgia will determine senate majority. Strategy and policy shifts can keep that majority through 2024 and beyond. Yes, freedom/social dividends is part of the strategy/policy mix, but this will discussed towards the end.</p><p><b>Deprograming the electorate as to the Republican party's anti-American evil</b></p><p>By rallying behind a dictator who is at least a little more pro fascist than anti fascist, they endanger republican voters for a future where a different narcissist threatens to bankrupt and invade their counties.</p><p>The republican backed Trump sabotaging of healthcare through the Supreme court this week is a tactic to destroy healthcare by blaming the court. In 2018, republicans had majorities that permitted them to destroy healthcare through congress, but knew that doing so would lose even more congressional seats than through the cowardly court challenge process. There is no ACA replacement plan other than a dumpster fire that requires emergency fixes.</p><p>The reason that economic collapse always follows thieving republican tax cuts for the rich, is that the tax cuts are accompanied by huge deficit increases, and those deficit increases<a href="https://www.naturalfinance.net/2018/12/deficit-adjusted-gdp.html" target="_blank"> juice up economic metrics unsustainably</a>. The goal is always to just keep the pyramid scheme going until the next election. The anti-American unsustainable short termism is also exemplified by denial of covid reality, leveraging of covid response to attack blue states, opportunistically amplifying divisiveness resulting from unfair police executions of black men, destroying the climate/environment by deregulating dead ender climate terrorist fossil fuel industries in yet more short term benefits at the cost of future sustainability and energy productivity/relevance, and future agricultural and coastal property values.</p><p>Deprogramming strategy has to be a very forceful pushback on accusations of communism on an issue by issue basis. The most moderate democrats support making America slightly less oppressive, and the most demonized democrats are not communists about to surrender Miami to Fidel Castro. All republican politicans support making America more oppressive. Deprogramming has to emphasize the evil of Trump support.</p><p>I will be writing a very difficult deprogramming focused article soon</p><p><b>Voter suppression and republican cheating must be top issue in GA senate races</b></p><p>Behind every effort to make voting easier or harder, republicans are on the side of making it harder.</p><p>GA senate candidates have called on republican secretary of state to resign because he failed to cheat enough.</p><p>Trump crony appointment of <a href="https://en.wikipedia.org/wiki/Louis_DeJoy#:~:text=On%20May%206%2C%202020%2C%20the,concerns%20about%20conflicts%20of%20interest." target="_blank">Dejoy</a> to head USPS, and his attempt to sabotage mail voting through scrapping processing equipment while regularly attending republican campaign strategy meetings is clear election cheating attempt. </p><p>DOJ head Barr ordering federal prosecutors to fish for partisan voter fraud is an abuse of government for clear election cheating.</p><p>Republican court packing with political operative hacks, especially Kavanaugh and Barret, is clear attempt to suppress voting and validate cheating.</p><p>For all Americans and Georgians, a fair election system is necessary to prevent dictatorships by either party. A 50/50 senate will ensure that election fairness is promoted for the future. With election fairness, republican and democrat candidates can focus on improving the country rather than destroying it for personal pillaging benefits.</p><p>For democrats specifically, this may be the last election with 8 hour voting lines. There may be relief from oppressive ID requirements, and other voter throughput reducing measures (that lengthen lines and reduce maximum votes) as well. For the country, a democratic majority will mean sane/less corrupt republican candidates in the future.</p><p><br /></p><p><b>Extreme economic development opportunity for GA</b></p><p>For the bootlicking brownshirt cowardice wing of the republican party, they should consider simply switching boots. With democrat senate control, they will be able to support all GA economic development/enhancement pork for the state of GA that is designed to keep GA blue. The Warnock seat is only for 2 years, and GA economic support will flow quickly. If the corrupt evil republican candidates win, they will simply join the obstruction that prevents GA from achieving economic growth that might support Democrat re-elections at the national level. </p><p>The Democratic party wants to help GA grow and prosper. Republicans want to destroy it, as a desperate propaganda ploy that "Democrats failed to prevent the destruction".</p><p>I will discuss the economic disaster that is the Vogtle nuclear boondogle further down, but federal assistance is likely on the table to bail out GA rate/tax payers for the disaster. But only if Dems win senate.</p><p>With 80% of the US, according to Ipsos poll, understanding that Biden has won the presidency, not only does the corrupt shitstain republican candidates endorsement of postelection Trump and call for GA republicans who did not cheat enough to resign, place an 80% democrat vote share as a ceiling, the remaining 20% of conspiracy-desperate voters has a large share of bootlickers who are still instinctive enough to not pick shitstained loser boots.</p><p><br /></p><p><b>Moderate healthcare improvements</b></p><p>Republicans want to make health insurance more oppressive and less reliable: make it easier for coverage to be dropped when you get sick.</p><p>Biden's plan for reducing the age of eligibility for medicare to 60 is a huge benefit to everyone. It reduces insurance premiums for everyone else, and insurance industry profits, because those over 60 are more likely to incur high healthcare costs, and throwing them out of the insurance pool, reduces insurance payouts that may trickle down to premium payers.</p><p>The public option insurance scheme is not as smart. While it is a trojan horse to attempt to slowly get to single payer healthcare, and in the short term will protect private insurance profits, it does so by moving sick people onto public option and healthy people onto cheaper private plans. But everyone is paying high taxes to support both public and private insurance rate payers and profits. The problem with the end game of deciding between single payer and extortion healthcare is the evil propaganda that "private insurance appears much cheaper" (when it only insures healthy people).</p><p>There is a public option that is much more moderate than Bernie's vision for a Platinum M4A. Call it Bronze M4A, with options for platinum supplemental coverage that may keep private insurers viable. </p><p>M4A is obviously better for 3 simple reasons:</p><p>1. Cheaper overall. Healthcare costs per person go down on average.</p><p>2. You don't need to worry about insurance weaseling out of paying. You could buy enhanced coverage on top of M4A</p><p>3. The only people who love their insurance are those who get it for "free" from work. An M4A bill could ensure that the costs to employee/employer of providing healthcare are transferred as extra cash to salaries/wages.</p><p>M4A means more money in Americans pockets (less insurance+ out of pocket costs > tax increases) with more trustworthy/reliable health insurance. There's the option of supplemental coverage to match any existing coverage options. The option to use extra cash for anything.</p><p>This is a better option than a public option because it is far less expensive to tax payers, and platinum supplemental coverage providers need to make premiums attractive if the coverage does not seem essential.</p><p>Even if "moderate dems" want to protect the expensive private health model with small bandaid improvements, they can still angrily call out the fascist disinformation who want to make healthcare more exploitative. </p><p>Campaign should be less about defending a specific form of improvement to healthcare access and costs, and more about attacking the depravity of republicans for American hating attempts at destroying healthcare access. If GA republican shitstain candidates win, they will obstruct any and all attempts to improve healthcare.</p><p>Single payer (tax funded) healthcare, even at the minimal bronze level, significantly improves the economic dynamism of America. People can start businesses without healthcare worries. They can join smaller businesses as employees without burdening those businesses with the cost and energy to manage employee healthcare, not placing smaller business at a disadvantage for talent acquisition. Tax funded healthcare also benefits (higher employer premium cost) polluting/hazardous/big businesses with international competition.</p><p><br /></p><p><b>Climate change and energy policy</b></p><p>GA does not have fossil fuel interests and so no valid loyalty to expensive legacy energy. Adopting cheaper renewables before its neighbor states will permit GA to colonize its neighbors' energy needs under a carbon tax with dividend energy policy model, which will eventually become necessary as renewable energy penetration eventually stalls.</p><p>The Biden climate plan is good in its generous budgetary allocation. There are several inefficiencies included in the plan: All nuclear research/development funding is 100% waste with zero potential to assist energy transition, not only for the absurdly exepensive and uncompetitive energy, but the 10-15 year delay in commissioning a reactor that means either zero progress on renewables during the wait, or immediate bankruptcy for the useless energy generator upon commissioning. Building efficiency retrofits are poor use of funds because new renewable energy financing provides orders of magnitude more emission reductions per dollar invested. Efficiency/self power generation standards for new construction are exceptionally good policy. Solar integrated during building construction is as cheap as utility scale projects.</p><p>The rapid (2030ish) <a href="https://www.naturalfinance.net/2019/09/renewable-hydrogen-economy-economics.html">path to 95%+ clean energy</a> is through a large amount of cheap renewables sufficient to meet every day's electricity needs, a small amount of batteries to buffer renewable energy into a baseload-like service, and hydrogen infrastructure that takes the surplus energy produced on most days to deliver reliable on demand energy to transportation, industry and buildings. A carbon tax and dividend (all pollution tax revenue collected redistributed as an equal cash payment to residents) is key to rapid adoption of clean energy and transportation because without a carbon tax, oil and gas prices go towards 0, and low cost climate destroying energy helps counterbalance any climate protecting energy adoption. A carbon tax centered climate policy is one that achieves progress with economic dynamism and with minimal centralized government expense. It is the dead ender climate terrorists who pay through loss of asset value. It is easy to <a href="http://www.naturalfinance.net/2018/03/the-only-solution-to-preventing.html" target="_blank">transfer climate policy to other jurisdictions whose cooperation is essential when carbon taxes are the central means of emission reduction</a>.</p><p>The republican candidates for GA senate are beholden to national republican party for funding their corruption. That republican party in turn is beholden to climate terrorist dead ender energy interests. Loyalty to RNC is incompatible with respect for GA citizens need for agricultural and coastal property sustainability and incompatible with GA energy progress including the potential with a carbon tax for Vogtle to provide marginally competitive energy as an attractive export to neighbors.</p><p>The breakeven amount of additional money to throw into the <a href="https://www.powermag.com/more-delays-for-vogtle-plant-expansion/">Vogtle 1GW nuclear money pit</a> for its completion is $3B. With the same amount 3 GW of solar could be deployed with enough left over for a battery buffer that turns that solar into a baseload power source. The future decommissioning costs of Vogtle are not included, but would increase the alternative battery buffer size. 3GW of solar could be deployed in 1 year. Whether Vogtle is abandoned or not, <a href="https://www.news4jax.com/news/georgia/2020/10/25/nuclear-costs-loom-over-races-for-georgia-utility-regulator/">republican responsibility for this continued ruinous theft</a>, will harm GA forever. The Democrat GA senate candidates are the only ones who can ensure that the nuclear energy nightmare is not ever imposed elsewhere in America. The enslavement of white and black Georgians must be liberated from republican graft, or at least given a strongly worded reprimand.</p><p><br /></p><p><b>Genuine unity possible with Democrat Senate win</b></p><p>Andrew Yang is in GA campaigning for Democrat senate candidates, and except for mistaken nuclear energy advocacy and a late campaign switch to unproductive public option healthcare, has a centrist, math focused unifying policies to achieve progressive outcomes without invoking culture war issues.</p><p>AY is renown for advocating for covid stimulus/freedom dividends. Both are unconditional cash grants given to citizens. Covid stimulus has been obstructed by Republican controlled senate.</p><p>Freedom/covid dividends are great for rich people. It permits landlords and banks to collect housing payments. Permits Businesses to have more customers to sell to, and employ people to take those customers' money.</p><p>Freedom dividends are great for lower classes generally because it permits the economic dynamism of entrepreneurship and education and mobility, and does so through individual centered/empowered means.</p><p>What is underappreciated is the potential for freedom dividends to end the institutional racism that leads to aggressive policing of black men. Freedom dividends leads to lower crime rates because criminal activity is risky and desperate, and UBI ends desperation. A chickenshit police uses qualified immunity and fear to shoot 10 times and ask questions later. Looking like a criminal is the pretext for aggressive policing, and if crime is rare, then no one looks like a criminal. While most people fear a "defund the police" message, they do so from a perspective of uncertainty rather than hatred. Many people can be convinced to not hate, I'd hope, and it's easier when you can park your lambo in every neighborhood, and 4 police per 100 residents is a lot more (tax) expensive than 2 per 100.</p><p>Freedom dividends are also the only potential general economic/pandemic relief that can be <a href="http://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.html" target="_blank">fairly self funded</a>. UBI is simply a refundable tax credit that is offset by tax rate increases, but it is only the highest income earners that pay more in taxes than they receive in UBI, but these same people also earn more from the economic growth provided by UBI.</p><p>The most unifying aspect of freedom dividends is that no one is selected by discretionary power hierarchy as deserving more than anyone else.</p><p><br /></p><p><b>Some proposals here are different than the official Democratic platform</b></p><p>Policy and bills will be set in congress. The existence and consideration of better and more progressive alternatives to improve America than the President's choice offers more paths to progress, and different coalitions to progress. A tied majority democrat senate permits compromises with republicans where such compromise provides greater value in achieving progressive goals. With a republican senate majority only obstruction and turning America into the biggest dumpster fire possible will be pursued. Dumpster fire extinguisher 2024 is their new platform.</p><p>Campaigning both to the left and center (center does not mean towards anti American republicans) while hinting/pretending that GA focused economic development is compatible with something some democrat has proposed is a winning campaign platform. Pragmatic/bootlicker republicans will understand that 2 and 4 year prosperity for GA depends on a democratic senate majority.</p><p>Insulting the disgrace of the personally corrupt insider trading RNC loyal shitstain candidates must be emphasized over defending Democrat policies. The shitstains only have Trump/RNC loyalty as policy positions, and Trump only believes in dumpster fire. Georgians deserve better than a dumpster fire, and the rest of the country will be very grateful if they choose prosperity by electing both Democratic Senate candidates.</p><p>To moderate democrat politicians who feel they lost because opponents called them or Joe/Bernie/AOC anti-police commies, they should have pushed back against the lying, America hating, pillaging oligarch, fascists, by calling them nazis. As Sean Connery said "Its the Chicago way". Sure you end up having to backtrack on whether they meet the exact definition of nazis, but that can be done while underlining their lying, their exploitative hatred of Americans and their health, their support for oligarch pillaging the economy, their support for police brutality, and their support for an unconstitutional dictator led dumpster fire. "Sure, they seem supportive of a zionist agenda. The reason they deserve to be called nazis is entirely due to their unfair accusations of communism and socialism." The more moderate the democratic candidate, the more angry they should be about opponent lies against them and the party. Joe Biden can take the scoffing high road dismissive approach to the mud slinging, but house candidates especially need more fire, including the most moderate ones. Fire can include both positioning different from AOC, but strongly defending unfair attacks on AOC.</p><p><b><br /></b></p><p><b>Beyond the GA senate runoff election</b></p><p>Iowa is apparently supportive of being sacrificial pawns in China trade wars to sacrifice their farmers for coastal financial and tech empires access to China markets. Compared to 2018 governor race, Iowa went an extra 5 points to republicans. Iowa voters should be shamed into redemption for such support. The bootlickers only understand which boot is the correct choice. Any republican candidate who echoes Trump loyalties should be attacked for anti American/Iowan values. It is local candidates who should show the disparity in federal investment between counties that support Democrats and those who hate America. The same strategy will get gains in Nebraska and Kansas.</p><p>Democrats have a reputation for walking a line between promises of progress and deliverables on progress. In this election, some black celebrities and leftists implied that since Obama failed to end racism, a vote for the Trump dumpster fire was encouraged.</p><p>Once upon a time, the republican party used to stand for economic dynamism. By including progressive policies implemented through dynamism rather than centralized supervision (M4A is included as a dynamic solution to healthcare because it frees people and business from needless financial oppression, dependence (on employer), and management by business of health coverage), the democratic party can expand its appeal, while potentially delaying progress if that is their motive, but key to power, further placing the republican party as a destructive untrustworthy dumpster fire only obstructionists. </p><p><br /></p>Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com15tag:blogger.com,1999:blog-2467928492793719077.post-47752159506164327812020-04-16T14:14:00.000-07:002020-04-19T06:34:49.817-07:00R0 - R naught is not a useful basis for viral spreading or econopolitical decision makingR0 measures the number of people one infected person will infect. It is somewhat useful from a macro scale ruler and health care empire decision making, including social policy that can hope to reduce R0. The health care empire's objectives are not in complete alignment with society or the individual, as they will bias decisions towards the health care empire's profits/power/safety.<br />
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This paper will first explore a micro virology model, and then discuss economic management. The most important contribution of this paper is consideration of social apathy and antipathy as a viral spreading factor, and as usual for my papers, UBI is a central component of the solution, though mainly the context of social antipathy is being considered.<br />
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<b>A micro viral spreading model</b><br />
Macro viral models are best represented by summing over micro (individuallistic) models. The summation can be simplified with averages and distribution of individuals (micro models). This model measures virus concentrations in an individual as the only factor in health and spreading outcomes.<br />
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<ul>
<li><b>X</b>: Threshold of virus below there is any outgoing infectious spread. If no further incoming infectious load, it is likely that immune response will bring virus level to 0.</li>
<li><b>Y</b>: Threshold below which there are no symptoms. </li>
<li><b>Z</b>: Threshold below which symptoms are mild enough to not seek medical (doctor) advice, or where general immune boosting activities (sleep, rest, vitamins, no further virus exposure) can hope to cause recovery. </li>
<li><b>H</b>: Threshold below which hospitalization is not necessary/advised/sufficiently helpful. The healthcare empire may subdivide these thresholds into further ICU, and ventilator therapy thresholds. The necessary rationing/demand of healthcare further sets the "advised" component of this threshold.</li>
<li><b>D</b>: Threshold below which patient is still alive, or has hopeful prognosis. Prognosis is relevant relative to healthcare availability factors.</li>
</ul>
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This virus model is similar to radiation exposure models/limits.</div>
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<b>Social apathy</b>: means general narcissism that shows little concern for others, especially those outside family circle. Both X and Y thresholds have the same impact on the self. Y, or the risk of possibly having Y status, makes no difference to the social-apath's behaviour. Seeking information reinforcing that any spread of the pandemic will affect the self below the Z threshold, is the social-apath's nature, and only external shame/pressure can pressure the social-apath's behaviour within the Y and Z thresholds.</div>
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<b>Social antipathy</b>: is the belief that society deserves harm as a result of the oppression and misery inflicted upon the individual by society (structurally) and government. For countries outside of the US, a cheap minimization of sociopathy is to blame the US for difficulties. For the US, the only historical policy has been, to paraphrase the song "fortunate son", more cannons will be pointed at you until social antipathy is relieved. UBI is the most important social cohesion policy tool. Too much policy relies on favouritism instead.</div>
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Sociopathic levels within a society can explain the different rates of spread of a virus. Respect for, and a lack of hatred for, others can enhance participation to containment and social norms. Asia may have lower sociopathic levels than the rest of the world.</div>
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The line between apathy and antipathy is the one between inconsideration and motivated disrespect.</div>
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<b>Is it safe to lick the airport bathroom door?</b></div>
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The viral dosage you will get from touching or licking an airport bathroom door, depends on the amount of breathing, coughing, sneezing, touching of the door since its last disinfection, as well as whether the other people interacting with the door were infected or not. To estimate the infection dosage deposited by those people, you can consider where they (recent flights) are from, each person's "social index" (how often they share breath and surfaces with other people), and their "paranoia/self/social preservation index" (how often they wash hands and track/avoid potential dosage transmission. NY and LA departure bathroom doors may have higher risk than Nebraska departure bathrooms. The "may qualifier" is there because NY residents who have a higher presumption of infection may also have a higher paranoia index that makes them have a lower "transmissionable exchange" rate.</div>
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<b>Moving away from R0 relevance</b></div>
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R0 is dependent upon social interaction and paranoia indexes. The proposed "Bayesian model" informs social and individual policy. The medical and biological community need to calculate the viral dose that is expelled and impelled as a result of all relevant actions and conditions.</div>
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<b>Herd and individual immunity</b></div>
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Opening a window, or going outside away from people results in the most minimal imported viral dosage. Opening a window may even improve the indoor air quality/viral saturation such that viral dosage is reduced for those spending significant time indoors. For nearly everyone, these activities are certain to keep viral load below threshold X, and produce some antibodies.</div>
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The alternative of being bubble people for 14 or 30 days will result in fewer/no antibodies, and greater risk to those individuals after the bubble is escaped.</div>
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Any outside social interaction will have a lower breath/cough exchange rate than indoor interaction. </div>
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Outdoor construction/shared touching activities can be made safe with gloves and masks and portable sanitation equipment (hand cleansers in a bottle separate from hand sanitizer). The combination of gloves and masks makes touching one's own face (with glove) unlikely.</div>
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Short shopping excursions or other low exposure activities followed by 2-3 days of isolation and rest is likely to result in antibody production while remaining below the X threshold and raising individual's X thresholds. While the X threshold is defined as the virus load that results in no shedding/expelling of virus, it can also be considered to be a viral shedding rate that is of no threat to cause others to exceed their X level.</div>
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This advice contradicts health care empire ambitions of providing immunity through vaccines. But without a vaccine, <a href="https://en.wikipedia.org/wiki/Variolation">variolation</a> has historical success, and may be a free innoculation method with model guidance.</div>
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<br /></div>
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<b>The power of testing</b></div>
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Testing anyone who is concerned they might have the virus with quick results has significant benefits.</div>
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It expands those who are below Y and Z thresholds of virus load from concerned status to certain status. Those certain of having the virus can be convinced to isolate and rest, and use therapeutics with higher success chance (because early in progress of disease) than if they do not know they have the virus. Testing removes high virus shedders from social interaction.</div>
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Social antipaths vs social apaths may care less about testing or their infectious status. But even they can be convinced that isolated rest and other treatments will help them. This is easier if testing and treatment is free to them, and if isolation itself doesn't threaten their survival (through lost income), and so UBI as well as "free" healthcare both improve compliance with advised reaction to test results.<br />
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But, another critical benefit of testing is "forced" quarantine. Can support the quarantined with free delivered food, thermometers, and possibly home entertainment services of their choice. The cost is minimal, but lower community spread benefits immense. Simpler support service for the quarantined is an increased UBI amount.</div>
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<b>Reopening non essential parts of economy</b></div>
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An important consideration for stores and offices is indoor air quality and air exchange rates. Air exchange designs balance energy efficiency with air quality in normal-non-pandemic times. Open windows or filtering systems/upgrades can be helpful in reducing virus concentrations in air.</div>
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Stores and offices opening for 1-2 days per week (not all places the same day) at fractional capacity would allow for employee rest periods that can hope to manage employee exposure to below their X threshold. </div>
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This also reduces pressure on transit and nearby food support restaurants/services.<br />
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Priority for outdoor economic/social activities, especially for summer, is important. Closing off car traffic for street festivals every weekend, and/or weekday, with pop ups in front of every retail/restaurant location with limited indoor capacity use. Heavy increase in food cart licensing. Public hand sanitizing dispensers.<br />
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Renewable energy projects would be a good outdoor employment, or personal home renovation work, opportunity.</div>
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<b>Unemployment benefits are economically stupid</b></div>
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Unemployment and welfare benefits are stupid because they incur a 50% income surtax on earnings as one of the many conditions for those benefits. So, these benefits pay people to refuse work.</div>
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UBI, cash not conditional upon income, is bonus pay to essential workers, does not depend on an overloaded application denial process, does not favour only the conditionally deserving, and most importantly does not prevent a partial/part-time reopening of the economy.</div>
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<b>Every corporate subsidy as pandemic response is theft from citizenry</b></div>
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Every program, whether pandemic response driven or not, that is not UBI is evil favrouritism. Bailing out the rich will not create investment in your country. Only a healthy consumer base will. Bailouts aimed at employment subsidies are bailouts for the rich because it increases the dependence of employees on those employers. Society and the economy is better off if those employees are free to pursue useful work opportunities, and the freedom is likely to lead to better re-employment offers when their original work is needed again. Creating special classes of people, whose work is already the most prone to cutbacks during recessions, to receive tax payer funded incomes close to their past incomes, while others struggle, or are merely forced to bear the future tax/debt burden of these bailouts, is equally misplaced favouritism to ensuring the rich lose as little as possible. </div>
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<br /></div>
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The risk of lower GDP, and wealth, does not magically make safe government spending unlimited. One of the perfections of UBI, pandemic or not, is that it is not charitable favouritism. It is self funded with higher tax rates, or just <a href="https://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.html">simple changes in the tax code</a>. Those whose income/profits are not impaired by the pandemic subsidize the country so that they can keep an economy/civilization that allows them to continue earning income.</div>
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The thieving filth that supports bailing out airlines (or generally any other program) is steeling from you. $60B is $300 that could be paid to each adult American. If there is no reason to fly very much right now, then parking the planes instead of blowing them up, will keep airlines in a position to resume flight schedules over time. Market restructuring of the companies/debt would reduce airline fares. Bailouts do not. $300 cash would be preferred by anyone not in airline industry, that also allows individuals to buy more air travel. </div>
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<b>Social antipathy and revolt management</b></div>
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The traditional justification for left wing policy such as unemployment insurance is that it prevents revolt. The unemployed recipient of benefits does not care that he is paid to do nothing-- incentivized to not earn employment income for duration of benefits. He is just happy to be catered to, or more relevantly, not motivated to participate in revolt. Suicidal mass murder rampages are not a political threat, even if sociopathic.</div>
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The justification for right wing policy of corporate and rich bailouts is that the upper classes and media can collude to instill more oppression in the economy. Prevent the rich to fund economically useful opposition to political rulership, by being included in the collusion. Corporations and the rich are happy to <a href="https://www.naturalfinance.net/2017/12/how-to-destroy-america.html">pillage the economy rather than invest in it</a>, because, like the unemployed, they like more free money, rather than the opportunity to work to make more.</div>
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Another practical argument for getting pluto-oligarchs to pillage the economy through inflated asset prices, is that inflated asset prices keep the economy afloat for longer with more to pillage. UBI also supports asset prices, and benefits every oligarch who does not require slavery and oppression to profit. UBI encourages the oligarchs to invest in a consumer rich economy. Workers are better paid in a consumer rich economy, making it even more consumer rich, and justifying even more investment. UBI means genuinely/sustainable higher asset prices, rather than juiced up unsustainable artificially high asset prices.</div>
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The problem with traditional revolt management policies, besides their evil or stupidity, is that there is a limited amount of money, and the greater the lie in asset prices, the greater the eventual crash. The lie can never be unwound. Every penny not spent on unconditional cash/UBI is a penny wasted. The waste creates revolt potential after the pandemic has passed, and paying for the waste is through proposals for more tax cuts on the rich and military overspending (and pillaging cuts to safety nets).</div>
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UBI means more social cohesion, and less social pathy. Even the rich do not need to fund revolt if there are consumer spending opportunities, and no matter how stupid and gullible you are, your jealousy, hatred and racism cannot be manipulated into rejecting the freedom dividend you deserve.<br />
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Despite revolt prevention, which requires coordination and great effort and risk, structured sociopathy (amplifying anger and discontent) increases virus spread because it is a low effort means to act out on social anger/indifference. When pandemic response policy does not maximize unconditional cash, it does not maximize social cohesion needed to limit willful/indiferent virus spread and limit anxiety/despair and the potential health consequences thereof. </div>
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<b>Inflation, deflation, and election management</b><br />
The US federal reserve is primarily, almost exclusively, a pro banking institution. In September 2019, <a href="https://markets.businessinsider.com/news/stocks/fed-repo-operations-explained-what-they-are-and-used-for-2019-9-1028557683#what-s-the-latest-repo-schedule-3">the Fed began what would become by the end of the year a $1T printed injection in repo operations</a> on top of interest rate cuts. These actions were pure political pro-Trump hackery designed to interfere with Democratic primaries, with no economic purpose whatsoever, and based on initial lie that it was to help smooth over quaterly tax payments by banking clients. The actual purpose was to juice financial markets, by replacing lenders who would normally juice financial markets through their loans, who were buying in financial markets instead of lending, with Fed repo loans that the borrowers could also use to cheaply buy into financial markets. Investigation for criminal indictment of Federal reserve for those actions alone are warranted, but pandemic Fed response as a ploy to delay civilization collapse until after a Trump re-election needs to be guarded against. There is enough people with power who prefer Trump re-election even if it collapses civilization. <a href="https://www.naturalfinance.net/2017/12/how-to-destroy-america.html">Destroying America was always plan A</a>.<br />
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The Fed and its banking constituency always needs to prevent asset deflation above all other concerns. Banking system loans depends on collateral that remains valued higher than the loan value. The real money supply is the sum of asset values. The major problem with juicing up asset values in casual (good) economic times is that the inflated lie becomes the baseline against which deflation must be protected.<br />
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When the banking system is not threatened by collapse inducing deflation, they prefer interest rates around 5% for decent profit from loans environment, that includes enough unemployment to make slavery/labour oppression a profitable environment for borrowers to be able to repay those loans. Asset inflation without wage and goods/services inflation works nicely for banks, except that with high asset inflation they could, if allowed, invest in assets directly rather than lend against them, though asset inflation is never sustainably certain. For banking system, and general society, it is only relative (changes in) inflation that is of concern. Any stable inflation rate, no matter how high, provides a good profit framework for banking system.<br />
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UBI is no threat to the inflation/deflation balance, or to banking system profits. Tax funded UBI does not reduce banking system deposits, it does increase loan demand, makes a high growth economy such that those loans are likely to be repaid, and any inflation in assets and labour/prices, enhances sustainable economic growth and asset price inflation, loan values and interest margins. Stock assets are genuinely and sustainably worth more as a result of higher sales volume, rather than the recent unsustainable pillaging of increasing stock prices through buybacks and cost cutting.<br />
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<b>The coming stagflation</b><br />
Stagflation was a term/phenomenon from the 1970s where high inflation associated with oil shock, led to high interest rates, high unemployment, and recessionary times. Normally recessions lead to low interest rates.<br />
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Businesses that (re)open at 25% capacity need to charge customers enough to earn 4x profit per customer in order to maintain previous full capacity profits. They need fewer employees at the lower capacity. They need to increase sanitation/screening/health costs that are passed on to 1/4 of the customer base. There is likely to be upward pressure on wages as a hazard (and welfare surtax) premium, unless a systematic structured starvation policy is adopted.<br />
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The major problem with opportunistic theft of Fed and government spending policy being diverted to propping up asset prices, and the richest's wealth, under the lie that the economy, and those underlying asset prices, will be back to their unsustainable normals in a month, is that the lying pretense is a lie. Interest rates will have to shoot up to reflect risk of borrowers. Any money given to airlines is a complete writeoff (the industry goes bankrupt every recession, and not even their employees are special snow flakes deserving more than their fellow citizens), and less ammunition to maintain asset prices at a credible (still higher than sustainable) level in the future.<br />
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The travel, entertainment, hospitality sectors may be a relatively modest percentage of economic spending, but they are a high employment percentage, and the human survival of the sector is important to the rest of the economy. <a href="https://www.selectusa.gov/travel-tourism-and-hospitality-industry-united-states">US travel and tourism $1.6T, 7.8M jobs</a>; restaurants $300B 15.1M jobs; Live event and movie box offices $40B. About 10% of economy in total, but up to 20% of jobs. This can mean a 10%-20% revenue reduction to businesses that would presumably be unaffected by virus, and 10%-20% employment reduction in those industries. There are further downward spiraling 10%-20% knock-on effects.<br />
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There is no possible Fed fueling/buying of inflated company assets that makes those companies be able to operate at a loss indefinitely. Grossly inflated Fed asset purchases, as they have done at the beginning of this crisis, necessarily has a limit, and necessarily leads to a collapse in those asset prices when that limit is reached, and transparently absurd pretense of US dollar and assets value becomes clearer. Fed corruption, prevents the massive amount of available global and US wealth from taking the risks to bail out/restructure these companies at a fair rate, but where the risk is individualized to those willing to take it, rather than a risk of forced collapse that impairs everyone's survival.<br />
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UBI is an excellent prevention of this upcoming stagflation collapse. Higher tax rates can provide partial temporary funding, where, automatically, those successful enough to prosper in the near term economic environment can help subsidize the economic contributions from those who are harmed from near term economic environment, all the while, increasing the economic success of the successful (through spending of UBI). UBI can mean that people can afford the higher prices that result from lower capacity hospitality/entertainment/travel consumption. UBI means being able to afford rent/mortgages that prevents banking sector collapse. It means most companies can maintain previous sales volumes that prevents collapse of their shareholder wealth. It significantly boosts employment demand so that ordinary workers can thrive, and frees up time/creativity to create own work and opportunities to employ others in adaptation to economic needs.<br />
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The benefits of UBI outweigh the benefits of slavery to both the ruling oligarchs and to the slaves. Military, clergy, and politicians, and to a lesser extent exporters, are the only ones who require perpetual popular misery to thrive. They can be pressured and outnumbered to relent to freedom.<br />
<br />
<br />
<b>Health sector information we need clarified</b><br />
We know that the majority of c19 infections are aymptomatic at time of test. We don't know whether the asymptomatic are only temporarily so (like HIV), or recover without any symptoms ever occurring , and we don't know if these individuals shed less virus through breath, or touch from breath on hands, than those who are symptomatic. (<a href="https://www.medrxiv.org/content/10.1101/2020.04.17.20053157v1">suggestion that asymptomatics are as contagious as others and can frequently recover without infection</a>)<br />
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For the viral model described at the beginning of this paper, the key parameter needed from biology/health sector is how much virus is shed from aymptomatics through breath through mask. This number, determines from presumed percentage of infected who cannot be screened out by fever checks will contribute to virus levels in indoor air.<br />
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With a universal threshold X intake per day, followed by prescribed isolation days to let the body reduce virus levels, the customer traffic within a space, along with air quality measures (filtering and outside air exchange), safe density policies can be developed for both employees and customers in establishments and vehicles.<br />
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Model data can focus indoor air quality measures that increase capacity for a space. In addition to filters, UV lighting has purported benefits. It is likely more profitable to install UV lighting than to operate a space at 1/4 capacity.<br />
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A phone app can help everyone model safety for many activities, and do so better than a doctor, or at least not consume their time, if the <a href="https://www.sciencedirect.com/science/article/pii/S016041202031254X">health sector provides the needed parameters</a>.<br />
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<b>Preliminary model input data</b><br />
High rates of infection among nursing home residents and health care workers who take hygiene advice seriously should strongly point to indoor air "quality" (viral load within indoor space) as a transmission vector. If correct, high grade masks and better air exchange/filtering would be highly recommended, if rationing were not an issue. Health advice based on secret (as possible) rationing restrictions harms the policy efforts required to remove the rationing restrictions.<br />
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Regardless of whether indoor environments can be classified as dangerous, it seems absurd to have an identical social distancing recommendation (2m) in indoor calm, and outdoor turbulent environments.<br />
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The lack of transmissivity-circumstance models leads to simplified advice bias towards being too harsh, or biased to being insufficient where rationing leads to insufficiency. Propaganda models lead to socialpathy and non-conformance.<br />
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<br /></div>
Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com11tag:blogger.com,1999:blog-2467928492793719077.post-47456149273370025552020-03-14T10:59:00.000-07:002020-03-14T11:08:15.532-07:00UBI vs payroll tax cuts (as pandemic response)UBI focused tax policy serves economic and social prosperity in the best of times, but an urgency is created in times of mass disemployment.<br />
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<b>Once $1T in combined tax and cash deficit stimulus has been decided...</b><br />
... you cannot call one policy alternative dirty pinko commie, while the other alternative is labelled great American capitalism. Trump has recommended an annual $1T revenue loss measure of payroll tax elimination. This paper is about exploring the best way to implement a $1T deficit increase which has already been committed to, by President and any congress member that supports his proposal.<br />
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<b>I advocate for payroll tax elimination, but with revenue replacement</b><br />
In Canada and US, Payroll taxes are between 14% and 15% of employement salaries and wages up to a maximum limit on employment income. The employer pays half the tax. Payroll taxes are thus regressive applying only to middle and lower income individuals, and excluding investment income from their taxation.<br />
<br />
For a 14% payroll tax, a replacement tax policy that leaves middle and lower income wage earners with a minimal 0.49% tax impact is a 7% pay increase (the employer portion of payroll tax) and a 7% point increase in tax rates. Because the tax base is significantly broadened, the policy is a significant social revenue enhancer. Social revenue neutrality can be created by replacing the 7% point income tax rate increase with a tax rate increase between 4% and 5% points.<br />
<br />
Another, UBI argument friendly, rationale for payroll tax replacement is that it acts as a robot tax. There is no longer a tax advantage for employers to automate or contract away employee costs.<br />
<br />
<a href="https://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.html">Revenue replacement/restructuring from payroll tax elimination is always economic and social strengthening progressive tax policy</a>.<br />
<br />
<b>Pandemic responsive economic stimulus</b><br />
Work (payroll) tax incentives incentivize the opposite of desirable social distancing policy to limit overwhelming pandemic infection spread. It furthermore amplifies the usual desperation focused economic enslavement to encourage behaviour that is dangerous to workers and society. Specifically, the desperate willfully ignoring either possible or certain infection in order to achieve the survival goals they are made desperate to pursue.<br />
<br />
A payroll tax cut is also a benefit to those who don't need it: Those lucky enough to have their work hours cut less than 7% as a result of the pandemic. Eliminating the business side of the payroll tax is not going to prevent the economic decision of laying off an unneeded employee just because their pay costs the company 7% less.<br />
<br />
UBI- unconditional cash- helps everyone. An extremely beneficial feature of UBI shown in the Finland pilot project is the greater social and institutional trust it created in participants. UBI allows for ethical and socially positive considerations to be relevant in behaviour. It creates a less divisive, in fact, cohesive society. It is a policy that escapes the usual favoritism of political process.<br />
<br />
<b>UBI vs income conditional assistance</b><br />
UBI is a much quicker economic stimulus than creating a bureaucracy set up to deny applications that do not meet income or asset based criteria. As a pandemic response, everyone who filed a tax return last (or this upcoming) year with an in-country address can be sent a payment.<br />
<br />
What makes permanent UBI cheaper than conditional programs is that the elimination of programs means that for any budget level, less net (of UBI) tax revenue needs to be collected. Any "ideological" need for a conditional program is eliminated through an even higher UBI level, which in turn, makes UBI even cheaper.<br />
<br />
Even as a pandemic response, any argument for income conditional assistance can be negated by funding the UBI. Permanent UBI programs in the US and Canada can be funded with a 10% point tax increase. For a $1000/month UBI, everyone earning under $120k/year receives a net tax cut. (At $120k income, $12k in extra income taxes balances $12k in UBI).<br />
<br />
Even as a pandemic and recovery plan, funding UBI with an income tax increase on individuals and businesses allows budgetary room for additional pandemic response. Those lucky enough to keep earning money through the pandemic can afford to pay for its containment, and in the recovery, even those faced with higher tax burdens, will have significantly higher income earning potential than without the stimulus.<br />
<br />
As a post pandemic recovery plan, very high employment requirements will be pursued to collect sales from the UBI enriched consumer base. A quick and successful recovery and growth is assured.<br />
<br />
Despite any programming provided by Fox news and CNBC that has convinced you that even social collapse is preferable to a tax increase on the rich, let me assure you that collapse will hurt your income and wealth far more than any tax rate increases. Tax revenue is not burned, and UBI ensures that it is channeled back to the most useful goods and service providers.<br />
<br />
The only people/groups that ever get poorer as a result of tax funded UBI are those that require slavery/desperation in order to profit. Everyone else, rich and poor, is much better off in after tax income, and socially through peace (lower crime) and cohesion.<br />
<br />
My latest complete tax plan (with links to previous alternatives): https://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.htmlPascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com10tag:blogger.com,1999:blog-2467928492793719077.post-75366656156138110892019-09-16T19:54:00.000-07:002019-11-11T11:36:59.586-08:00Renewable hydrogen economy economics<br />
<div style="margin-bottom: 0cm;">
</div>
<div style="margin-bottom: 0cm;">
While modern battery systems are
becoming the preferred energy storage solution to pair with
intermittent renewable (cheapest of all power) energy sources,
hydrogen (paired with small battery sizes) is and will be a cheaper
and more reliable alternative that offers a carbon free path for all
(100%) of humanity/vehicle/industry's energy needs.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Financial discount rate for home
energy savings</b></div>
<div style="margin-bottom: 0cm;">
A discount rate is an interest rate
used to standardize financial payments/benefits to a "present
value". As a starting point a riskless rate, usually equal
to a government bond in the same currency as financial flows, is
taken, and then adjusted based on the project's risk/uncertainty
profile.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The value of a grid tied home
(solar/storage) energy project is relative to the continued
subservience to an electric utility monopoly. If the utility
eventually goes 100% renewables with mega projects, there will
continue to be savings from self-generated solar, as long as
surpluses can be sold at reasonable rates. There is high
risk/balance of probabilities that utility will be slow to drive down
costs through renewable generation, may demand compensation for
fighting climate change, and continue to pass down costs related to
transmission, delivery, billing, past-nuclear-boondoggles, and
profit.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The fact that utility rates will likely
increase at the rate of inflation (reasonably expected to be a steady
2%/year), that home energy savings are tax free (while bond
income is not), that energy price and availability certainty (less
risk) is obtained, and that the need for home energy is more lasting
than government financial sustainability, there is a case for self
produced solar to be funded below the standard riskless rate, over 2%
(inflation rate) below government rates when great confidence in
government sustainability exists.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Most solar projects have payback
periods under 10 years (even if 30-50 years of useful energy is
produced), and because they pay benefits consistently each year, the
comparable bond (which pays back most of its loan at the end) term is
half the payback period. 5 year bonds almost everywhere
currently have interest rates of 2% or less, and so it is justified
to use a 0% discount rate for home solar projects.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Policy</b>: Financial
securitization of completed home solar projects at equivalent to
government bond rates would offer homeowners cheaper financing than
mortgages, and offer investors secure assets. Some
jurisdictions have negative bond rates specifically to encourage
investment. This theme will be devloped in this paper.<br />
<br />
For a 50 year solar + hydrogen project, a doubling of <a href="https://www.calculator.net/amortization-calculator.html?cloanamount=100000&cloanterm=50&cinterestrate=2&printit=0&x=64&y=19">amortized energy costs</a> occurs at interest rates of -0.4% (rate possible in Germany ), 2% (Above current US rates, and most other countries), 6.2% (lower than typical risk capital), 13.7% (higher than most sound projects). This means that if amortized loan payments for a project at 2% interest rate generated electricity costing 2c/kwh, the same project generates costs of 1c/kwh at -0.4%, or 4c/kwh at 6.2% interest rates. A 0% interest rate would be amortized at 2%, and result in a 1.25c/kwh project cost.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>The general case for hydrogen over
large batteries</b></div>
<div style="margin-bottom: 0cm;">
At a steep 60 degree angle, a 10kw
solar array in Toronto Canada will generate 30kwh/day in November
to January, and average 48kwh/day March to September. At a steep
angle, 10kw solar can take only 25 sq.m (250 sq.ft) of floor area.
30kwh is sufficient to heat and power over 6 floors of this area.
A shallower 30 degree angle will produce 25.5kwh/day in winter, and
58kwh/day for most of other 3 seasons, but 64kwh in July. Shallow angle solar takes up to double the floor area as 60 degree angled panels.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The right house design for Canada is to
meet winter solar needs, and a steep roof is recommended. In
winter, heating/storing hot water and then distributing that water
throughout the house is an effective way to use all solar energy.
The rest of the year, however, large surpluses either need to be
exported/sold or used up.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The general case for hydrogen is that
with a 10kw solar array, 8kw (revised down later) in electrolysis
together with 10kwh in battery will use all solar energy and fully
charge the battery every single day of the year, while a comparable
50kwh battery does not get fully charged in winter, and only gets
useful summer charge, if 50kwh of summer discharges per day every day
can find use.</div>
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<br /></div>
<div style="margin-bottom: 0cm;">
So as long as electrolyzers cost less
than 5x more per kw than batteries cost per kwh, the system costs
less, provides full use of generated power, and using hydrogen allows
complete resilience for any winter event needs.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The value of energy storage is the
value of discharged energy. Whether energy is not discharged,
or used to cool home to 16C, because it would be otherwise
wasted/unused, it has less value than if there are vehicle or
industrial/other buyers for that energy. The other implication
is that long term storage has much less value than regularly
dispatched storage, or in the case of hydrogen,
exportable/transportable energy.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Home use for electrolysis, oxygen
and hydrogen</b></div>
<div style="margin-bottom: 0cm;">
To produce 1kg of hydrogen (33 kwh of
heat/energy value) takes 41-45kwh of electric energy in electrolyzer,
and as a byproduct produces 8-13kwh of heat. The reverse fuel
cell reaction takes 33kwh(1kg) of hydrogen and produces 18kwh of
electricity with 15kwh heat. The electrochemical
exothermic/endothermic reaction can add about 3kwh of heat to the
fuel cell process, and take away the same amount of heat from
electrolysis.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The primary benefit of hydrogen
electrolysis and fuel cell in home is the heat byproduct. A
fuel cell produces hot "distilled"/pure water. After
heat is extracted from it, the pure water can be stored.
Distilled water is useful for some electrolysis technologies, is best
for any piping (heat distribution), and drinking it can relieve
kidney stress or over-mineralization in the body. Any excess
heat can be used to improve the efficiency of the electrolysis
process, so even in hot summer, you can't have too much hot water.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Oxygen generated by electrolysis can
improve air quality, and reduce the amount of air exchange (with
outside) in the home which improves indoor heat/cold retention.
Oxygen and hydrogen mixed together and lit with a flame can produce
extreme heat. Cooking is one application, but a simple "over
unity" (greater than 100% efficiency) heater can be created by
blowing flame over a catalyst. Oxyhydrogen flame creates steam
that is hot enough (with catalyst) to spontaneously disassociate
into oxygen and hydrogen, and cycle back into the burn/flame. A
mix of catalyst (platinum) and sand in a metal cylinder can last
forever.</div>
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<br /></div>
<div style="margin-bottom: 0cm;">
Hydrogen generated by electrolysis is
an excellent heat transfer fluid. It is the highest of any gas,
and has 1/3 the transmissitivity of water (7-8 times greater than
air), 10x the diffusivity and heat capacity of air, the lowest
viscosity. As a gas (with the lowest viscosity of practical
thermal fluids), an advantage over water is that it is self pumping
to any height and heating/cooling can be gained through
compression/expansion. Low viscosity provides good flow through
even thin pipes. 3x the atmospheric density or 3x the flow rate
can provide the same heat/cold distribution as water. A long
piping network can double as storage. For very tall buildings,
hydrogen distributed for heat/burning (no chimney/exhaust needed) is
more practical than central hot water heating because the latter is
expensive to pump high.</div>
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<br /></div>
<div style="margin-bottom: 0cm;">
<b>Financial and technical targets for
hydrogen technology</b></div>
<div style="margin-bottom: 0cm;">
Home electrolyzers must be DC current,
priced under $1/watt, and preferably around $0.50/watt. Of the
2 commercial electrolyzer technologies, PEM's ability to react
instantly to variable voltage is not that important with a small
battery interface. Alkaline based electrolysis is generally
cheaper. PEM's ability to use pure/distilled/tap water is a
simplicity advantage. Home heating systems and fuel cells can
produce/consume distilled water. These price and technology
targets have been met in large scale commercial electrolysis systems.</div>
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<br /></div>
<div style="margin-bottom: 0cm;">
Toyota claims its automobile-sized fuel
cells (113kw) costs $60/kw. Residential systems that cost $1000
for 1-2kw would be acceptable. Automobile-sized systems
(Hyundai has 25kw) for multi-family (apartments) and commercial will
likely have much better value initially. Any cooling for fuel
cell must be potable water cooled for silence and water heat gain, or
through compression/expansion gas cooling.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Electro chemical compressors are very
similar to PEM fuel cells, but do not require any catalysts.
These should be produced for under $100/kw, and 95%+ efficient.
300 atm pressure output. Should double as an expander
(generating electricity from pressure)</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
300atm tanks are about $1/liter in
bulk. Wide distribution network is needed to make this close to
effective retail/developer price. Fiber Reinforced Pipe (shipped on
a spool) is a useful alternative to tanks or pipelines, and should
beat tank delivered costs even when installed on site as a tank
substitute. Lasts longer (50 years) as well.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
50 year life times for electrolyzers,
fuel cells, and compressors should be achievable.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The cost targets are the most
important. To achieve these, it is likely that auto industry
R&D in fuel cells will be leveraged, but in the case of a
hydrogen producing home, <a href="https://studylib.net/doc/18187378/hydrogen-oxygen--air--fuel-cells-with-alkaline-electrolytes">alkaline
fuel cells</a> (used in early space flights) that require pure
oxygen c/would be suitable. As is for electrolyzers, Alkaline
based technology is currently cheaper.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
An appreciated quality shown in some
research for electrolyzers and fuel cells, is higher efficiency at
less than full current/power. This is an advantage for solar
powered electrolysis and underutilization of electrolyzers. So,
a wide range between peak/"burst" and efficient power
rating for electrolyzers is very useful.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Energy control software must be
developed to balance use of battery charging, electrolysis, and power
consumption.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Hydrogen production vs hot water
storage</b></div>
<div style="margin-bottom: 0cm;">
A solar system without hydrogen
electrolysis must put all of its winter surplus energy into heating a
large amount of water, then just pump that water throughout the day
through ideally under floor piping. 80-95C water can
store 70-80kwh of heat per 1000 liters. At least 2000 liters
should be kept hot to handle poor sun production days, and
extreme cold contingencies. 60C water has half the useful
hydronic heat as 90C water (for 30c delivery). 6kw of heat
pumps in "cascading" mode for high heat lift is needed for
the 90C system. Indoor air to water heat pumps are the most
affordable and efficient. A utility room full of hot water
increases the efficiency. An outdoor/split heatpump/AC can
further preheat air and provide additional summer cooling.
Total capacity can be higher than used capacity if cooling is
important.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
With hydrogen electrolysis, a smaller
water system is possible due to, even without a fuel cell, hydrogen
as a backup heating fuel that is usable in space/room heaters.
100 liter tank at 300 atm stores 90kwh of hydrogen energy.
Replacing heat pumps with electrolyzers can be (with above targets)
cheaper. Hydrogen tanks use less space than water tanks, and
cheaper than a water tank that is 10x larger.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
In the "general case for hydrogen
section" I suggested 8kw electrolysis paired to a 10kw solar
array and 10kwh battery. The actual recommended system is 6kw
electrolysis and 2kw heat pump. Even if/when the home is unused
in summer, a 10kwh battery will allow 1.5 hours of electrolysis
before and after the peak 4 sun hours, cycling the battery twice per
day for better value from the battery, and with light or heavy energy
use in the home, no energy is unused.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Starting in February, even if it is
still very cold, there are more sun hours. Without an
electrolysis system, energy should be wasted (for resilience) into
overheating water to care against freak cold spells. Resilience
exists with hydrogen production. If there is no freak cold spell,
there is income potential from sale of produced hydrogen.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>A free government policy to
significantly reduce cost of renewables and hydrogen production</b></div>
<div style="margin-bottom: 0cm;">
With a $500 assessment/inspection fee,
governments could provide loans to completed/functional renewable
energy projects equal to their assessed value (not necessarily cost,
though they would be very close, with value tending to be higher than
cost in a well executed/designed project), at an interest rate
identical to government's low borrowing costs. While the
interest may be the same as any new offsetting government bonds, the
project would be cashflow positive to the government, as the loan
repayment schedule would follow mortgage (amortization) models with
regular principal repayments (faster repayment than the payments
government must make on bonds). The government also collects income
taxes from the interest it pays, and the profits and wages earned by
investment project (= to investment cost). Canada's government
accounting system uses the concept of net debt, where assets,
especially assets generating revenue/returns, are subtracted from
total debt. This program no matter how generous would not increase
government net debt. EU member “austerity” accounting should
permit these investments without affecting deficits (or their limits)</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A completed functioning renewable
energy project is risk free investment. The combination of
renewable generation, and storage that includes hydrogen guarantees a
pathway for all energy generated to get delivered/used. Even if
long term prices received are not guaranteed (and contracted purchase
agreements, may get renegotiated), short term (10 year) prices are
forecastable.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
During construction, there may be
defects and delays and risks. The industry already has
arrangements with 3rd party insurers for long term warranty backing,
and in the case of solar, there is weather insurance. Short
term financing by customer or suppliers during development phase has
small risk and outlays, but the proposition that customer gets a
solar and heating system with no long term cash outflows, and super
low financing rates, is extremely attractive, and more attractive
than what the current residential solar industry can offer. The US
has a 30% tax credit that is only useful to people with high tax
bills. A 3% lower interest rate over a 20 year term has equal value
to a 30% tax credit fully taken the year it is spent.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
There's always some risk of fire and
vandalism, but interest rates can be adjusted based on 3rd party
insurance against those risks, or an implied interest premium for
government provided/implied insurance. By keeping the loan
value smaller than the realizable project value (which can still be
higher than cost), you eliminate the risk of insurance fraud
motivated arson.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
With global 10 year major economy rates
all under 1.6% for 10 years, with $15T of investment chasing negative
government bond yields. Bringing the cost of capital for
renewable projects to 0%-1.6% significantly lowers cost of capital
for renewable projects (and energy costs/prices), and motivates the
investment all of these economies/people/humanity needs. Even
if user/developer is using their own money for a revenue generating
project, a cost of capital equal to the government bond rate is
appropriate because renewable energy (with hydrogen production outlet
to monetize surpluses) is risk free.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
This policy is extremely valuable for
assets with 50 year lifes such as solar and hydrogen equipment. It
is especially valuable for hydrogen electrolysis from renewable
energy because these are only used when sunny/windy, and so produce
4-5x less hydrogen than if they were used 24/7. High costs of
capital tend to make any benefit from an asset that is more than 20
years away contribute close to 0 in present (investment time) value.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
For home owners/builders, renewable
energy generation/storage/hydrogen should be included, but so should
non fossil fuel using
heating/cooling/air-exchange/long-life-roofing-premiums and vehicle
charging systems. It is debatable whether other efficiency
measures (extreme insulation/lighting) should be included in program
as more solar generation/storage can be a more cost effective
solution to eliminating carbon emissions. Though dumb
lighting/insulation decisions should be penalized.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
For general economy purposes,
government cost of capital loans should be given in the sectors of
hydrogen manufacturing and renewable electrical transmission,
electrical vehicle manufacturing (aside: EVs should not receive
consumer subsidies. Emission reductions are based on miles driven
not car ownership. Carbon taxes increasing the cost of alternatives
provides the right consumer framework for choosing an EV), electrical
and hydrogen powered machinery purchases and manufacturing that is
normally powered by fossil fuels (tractors, mining equipment, blast
furnaces). Loans in these sectors would be based on production
delivered. Companies receiving these loans would effectively be
receiving cash for projects they have already paid for. Repaying
investors is a permitted use of the cash, but reasonable socially
desired alternatives of expanding their successful production (which
would result in another cash infusion loan after it is complete) is a
recipe for rapid growth and international domination.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>The cost of solar independent of
electric grid</b></div>
<div style="margin-bottom: 0cm;">
The cost of hooking up a 10kw solar
system to the grid includes $3000-$5000 (brand name) for a grid tie
inverter (theses have short warranties that could result in 4
replacements over 50 years). The monthly fixed customer charge
($40 in Ontario and increasing) is $9600 over 20 years.
Connection fees to pole and meter $750. There are additional
cost/complications for using a battery system as backup to electric
service (typically adds $2000 ($5k total) to grid inverter system).
There is a utility acceptance/inspection fee (and potentially
capricious rules designed to increase expense) for connecting solar
system to grid. Using smaller AC inverters, while having main
electrical loads (HVAC/electrolysis) DC is cheaper than a grid
system, and DC allows 10%-14% more energy efficiency from solar and
conversion avoidance.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The distribution network for an
electric utility is somewhat complicated. Typical wiring allows
for a fixed number of 100 amp services on a branch (typically about
1000 or 500 200 amp services). The size of service has to be
limited due to possibility that all homes could draw full power
simultaneously. Many local power outages are the result of
utilities cheating on this, or of equipment deteriorating such that
80% average power draw trips up the branch.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Limiting individual homes to 10kw solar
is how the utility solves its distribution problem. But the
same parameters that allow a home to be self sufficient, allow 1000
homes on a microgrid/branch to also be self sufficient. 10MW
solar distributed in any amount among 1000 homes will work on the
same distribution wiring. The homes with 40kw and 400amp
service will never import 400amps, but all homes will prefer
consumption when rates are cheapest (when it is sunny).</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Solar value is usually
miscalculated/misreported. Modern solar panels will produce
66.9% of their new power after 49 years (0.8% degradation/year used
in this paper, but there are reports that in cold climates solar
degrades at only 0.2%/pa). 82.7% average production over 50
years. 15.09kwh is generated per 1w of solar per hour of sun.
The quick calculation of value for a 4.34 sun hour system (Toronto,
60 degree roof facing south. <a href="https://pvwatts.nrel.gov/pvwatts.php">See
output for your location</a>) is every 65 cents in installation cost
is a 1c/kwh electricity cost, assuming 2% cost of capital and
inflation cancel each other out. A lower sloped roof produces
more, and improves this simple calculation, but the model is wrong
because winter electricity production is 2x-5x more valuable than
summer production in Ontario (hotter climates may have opposite high
value season).</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A simple way to correct for high and
low value energy, in the proposed 10kw solar system, all energy is
used in the 3 low solar production (winter) months, and in the
remaining 9 months, an average of 2.8 hours (28kwh/.day) is surplus,
with 20 days of intense AC use, and February heat mostly drawing from
January reserves. Subtracting these surplus production hours
from the 4.34 hour/day results in a "core"/essential energy
production of 1.54 hours/day. Each 23.2c/installed watt results
in 1c/kwh core energy costs. 6.367MWh of surplus per year is enough
to generate 141.5 kg of hydrogen (excludes any hydrogen production
when winter is mild). With 6kw of electrolyzers costing between
$3k - $6k, and a 2% cost of capital, the (interest only) <b>cost
of hydrogen production is </b><span style="font-weight: normal;">$0.42-$0.84/kg</span><b>
</b><span style="font-weight: normal;">(with 50 year
amortization(paying back principal) </span><b>$0.63- $1.11</b><span style="font-weight: normal;">...
so a price per kg that fully pays back any loan funding electrolyzer
purchases. Or 3.6% ROI if self funded.)</span> with this
surplus electricity. If instead, 3.34 surplus sun hours (extra
0.54 hours) (10kwh/day electric consumption in 9 surplus months), it
results in 169kg H2 production, and 35c-71c/kg (with amortization:
46c-95c/kg) production cost. Note that with a 90c/kg hydrogen cost
(including amortization), the cost of diverting electricity away from
hydrogen production is 2c/kwh (45kwh per kg production). This makes
your electrolysis stack last longer, and you are paying the 90c
towards the loan/capital costs of the hydrogen equipment whether or
not you use it, less the small advantage of longer lifetime for the
equipment. A productive example is that EV charging while sunny
would cost you 2c/kwh. A different but relevant measure of the cost
of diverting away electrolysis is the “opportunity cost” of not
being able to sell it at a much higher price than cost. If you could
use the energy to produce hydrogen that you can sell for $3.60/kg,
then cranking up the AC costs you 8c/kwh. Current California retail
price is $14/kg.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
All of these costs are lower than
natural gas at $9/mmbtu delivered (typical low retail), and without
needing a $20/month customer charge gas utility hookup. 1kg of
hydrogen burned in air generates 111k btu. Does not require a
chimney for 10%-15% efficiency boost, when burned with oxygen can
generate 40% more btu, and can burn under water guaranteeing 100%
heat delivery (another 10%-15% not wasted) . Used in a fuel
cell, with electricity run through a 300% efficient heat pump, and
waste heat captured, a full 230% of the "burn btu" heat can
be generated (with optional other electric use). Thus a
$2.30/kg cost of hydrogen is comparable to $9/mmbtu natural gas,
given the optionality of efficient electric conversion.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The cost per solar watt depends
significantly on whether it's new construction/design, DIY, or a
turnkey system sold with warranties. Savings from grid
independence are significant. Solar panels, wiring, and charge
controllers should be $1/watt or less under new construction done at
volume. 10kwh in Batteries can range from $2500- $5000, and a
DIY used EV battery is at the low end of this range. At the
high end, as a professionally installed retrofit, $25k. (some of the
costs eliminated from traditionally installed solar is large AC
inverters, and batteries designed to tie in to large AC grid ties,
though for retrofit to existing AC wired house, a tesla powerwall
might add $5k to cost) The cost of a 50 year roof isn't
included but since it is less than double the cost of a 25 year roof,
it pays for itself, especially with 2% cost of capital.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
It is reasonable to take the $480/year
hydro fee, and $240/year gas fee over the full 50 year life of the
system. Just a couple of years ago, the hydro fee was $360/year
in Ontario. Both are likely to keep increasing, but especially
the hydro fee, likely faster than inflation. Ontario has
committed to wasting $24B on refurbishing its nuclear reactors,
requiring a future 8c/kwh price/revenue increase. Including the
full 50 year costs though means that all low and high cost estimates
are negative. $24k in hydro fees saved, $12k in gas fees.
Even with Ontario tradition of having taxpayers (instead of rate
payers) pay for its energy boondoggles, it's not reasonable to
deduct anything due to this as the tax payer cost "option"
exists with a grid connection as well. An additional savings
related to connection fees and no boiler (better heat quality than
furnace and close to solar design) are about $3k. With 2
replacement boilers over 50 year period, it should be equivalent to
water or hydrogen heating/tank replacement costs. Batteries
could need 4 replacements over 50 years, but costs should fall.
$2000 in 10 years, $1000 thereafter.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
So <b>the cost of the off grid
solar system in Ontario is negative. Save $4k-$19k with 0
energy costs, and revenue potential from hydrogen. </b>This
excludes the savings from not paying for energy. 15kwh/day (same as
this system) at 15c/kwh (will go up) for 50 years is saving $41k.
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>The value of hydrogen</b></div>
<div style="margin-bottom: 0cm;">
1kg of hydrogen has the equivalent heat
energy as 1 gallon of gasoline. But when used in a fuel cell
vehicle is 2x more efficient (more range) than a gasoline engine
(slightly more with regenerative breaking), and so the real energy
equivalent is 1kg H2 = 2 gallons of gasoline.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Hydrogen can be mixed into the gas
pipeline network at a ratio up to 25% without damage to the gas
network or any modifications to appliances that burn natural gas.
This is often recommended as a decarbonization process. It
would require immediate mandate that new appliances be dual-fuel,
such that 12 years after the mandate is given, natural gas can be
exterminated from use. It is a relatively slow extermination
process that also requires a massive 25% to 100% jump in hydrogen use
when a switch is turned on in the future.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Hydrogen mixed with natural gas loses
the special properties of hydrogen. 1kg H2 = 1/9th mmbtu
natural gas, when mixed, but when not mixed, has at least 230% of the
value because it can be converted to electricity much more
efficiently than natural gas, then generate that much more heat, or
even more useful electric applications.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Hydrogen competes with gasoline much
better than it does with natural gas. A carbon tax that brings
gasoline to $6/gallon (just $2/gallon carbon tax in many
jurisdictions) would permit hydrogen at $12/kg to compete. A
higher carbon tax applied to natural gas that would add $18/mmbtu
($3/gallon gasoline co2 equivalent), and make a pure hydrogen
equivalent value of $6.90/kg. Assuming the gas utility/pipeline
margin of $6/mmbtu would remain adequate, a 66c/kg distribution
margin to utility/network would be charged. This margin can be
lower if hydrogen is used more because it has more value and more use
than natural gas. If the gas utility is delivering vehicle fuel
(H2) to refilling stations replacing both oil and natural gas, a
40c-50c margin per kg would be higher than the differential between
wholesale and retail gasoline ex taxes, and more fully use the gas
network.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Carbon taxes are essential for
renewable energy adoption, because renewable energy adoption drives
the price of fossil fuels towards 0, and that downward price move
makes demand for FFs sticky.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
An alternative to hydrogen production
is trying to resell electricity to the utility. The capital
costs for 6kw of electrolyzers and a 10kw grid tie inverter are
similar. The 45kwh put into 1kg of hydrogen, after AC
conversion losses are 40kwh that can be put into grid. 6MWh of
annual surplus in Ontario would require an 8c/kwh credit to equal the
$480 customer charge, and then a cash payment from the utility (not
policy, and no enthusiasm from utility, as it would bankrupt nuclear
dependence) of paying 12c/kwh to prosumers, Then $240 in annual
revenue could be generated. A $3/kg hydrogen profit would be
$485 in annual revenue. Requiring over 16c/kwh cash settled
payment from utility to match. Quebec, whose energy sector has
not corruptly ruined the province with nuclear waste, has only a $12
monthly fee. Just over 2c/kwh credit, would pay for the
customer fee. 10c/kwh would match the hydrogen revenue.
Quebec electricity rates are 4c/kwh or less. Generally, as more
solar gets added on the continent, daytime electricity rates will
come down close to 0 for summertime in Canada.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Hydrogen prices will come down with
supply/demand balance in face of carbon tax. Being paid
$3-$6/kg initially will attract a lot of producers. $3/kg will
attract significant demand. It can already be profitable below
this price, and supply and demand adoption will drive down costs of
both, and drive down the cost of hydrogen further. If hydrogen
is profitable at 10kw-50kw, its profitable at 50TW.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Upsizing to a 50kw solar home/farm</b></div>
<div style="margin-bottom: 0cm;">
This section is about finding the right
balance of batteries and electrolyzers, and the value of smoothing
out solar production (either through tracking, or what is available
to buildings, putting solar on 3 sides of building) in a direct to
hydrogen production system.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
In a simplifying process, I will ignore
the slight annual production degradation from solar panels, offset by
the fact that with 50kw no other heating system than electrolysis is
needed, and reflecting the fact that first year(s) production will
sell at a higher price than late years.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Adding an additional 40kw of solar
panels to our system allows generating (over) 1kg of hydrogen per sun
hour with “left over” 21.5kwh average daily household
electric/cooling consumption (an increase over previous model in that
it could be a farm, bigger house, or business).</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A side issue that needs explaining is
the effect of temperature on solar production. Heat decreases
production. Cold increases it. For Toronto, at 44 degrees
south facing panels, the average net heat related losses are 8.4%
(not reported so far in analysis) with gains in winter as much as
10%, and losses during peak sun and heat hours in summer of 20%.
This is an advantage for solar/hydrogen production in Canada, as more
valuable winter energy is generated than "advertised", and
generation is smoother during the long summer days. Peak
instantaneous generation will occur on a cold sunny day close to
March equinox. May exceed 50kw. Designs that do not have
enough electrolysis/battery/heat load to miss a few percent of peak
power on a few hours of the year are acceptable, especially if other
loads can be used at that time.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
In determining the amount of
electrolyzers with our 50kw system, 35kw of electrolyzers is a good
start because a south facing array will produce over that amount for
about 4 hours per day on average. Halving the (fixed capital)
cost of hydrogen production can be done by either halving the price,
halving the cost of capital, or doubling the daily production hours
(with half the capacity). Its fairly rare for peak output to
exceed 45kw, and rare still to do so for 4 consecutive hours, and so
a starting battery capacity of 40kwh is appropriate. But reducing
electrolyzers and batteries (done in following paragraphs) can lower
costs of system.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The life of battery systems improves
more than double when you double their capacity, because the system
has slower charge/discharge rate, and all/most lithium-based battery
technology has very little degradation when charged slowly (or not at
all) above 75% state of charge, and discharged slowly below 25% state
of charge. It varies significantly by vendor, chemistry and
technology advancements, but as a rule of thumb, an NMC-lithium
battery rated for 3650 full cycles (to 20% deterioration), would do
about 4x the half cycles, for 100% more energy life, and then double
the energy life by using slower charge/discharge rates around the
extremes.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://www.researchgate.net/profile/Ying_Wang153/publication/309148022/figure/fig4/AS:417095889244160@1476454817034/Cycle-life-versus-DoD-curve-for-lithium-ion-NMC-battery.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="175" data-original-width="388" height="144" src="https://www.researchgate.net/profile/Ying_Wang153/publication/309148022/figure/fig4/AS:417095889244160@1476454817034/Cycle-life-versus-DoD-curve-for-lithium-ion-NMC-battery.png" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">NMC cycle life as affected by depth of discharge </td></tr>
</tbody></table>
<div style="margin-bottom: 0cm;">
If batteries cost 1/4 per kwh ($250)
that of electrolyzers per kw ($1000), then replacing 10kw of the
electrolysis (down to 25kw total) with another 40kwh of batteries
(now 80kwh) has the same overall capital costs. Yet gains are
achieved by having a greater portion of the day be over 25kw (50%)
solar production (using full electrolyzer capacity), and the portion
of solar day over 25kw production goes up to 6 hours on a decent
day. Gains are also achieved by a maximum battery charge rate
of 25/80, and that maximum occurring at solar noon when batteries
would be at most at 50% charge, and the maximum charge rate is
actually very rare cold spring day. As long as there are very
few days where the 6 hour peak doesn't average over 38.6kw, then
80kwh of batteries are sufficient to capture all energy. Cloudy
days and winter days that produce under 3.1 full sun hours will
under-utilize the battery. Because batteries don't last as long
as electrolyzers, and there is some inefficiency charging/discharging
them, the cost differential has to in fact be more than 4x in order
to replace 1kw electrolysis with 4kwh battery, even when it is both
sufficient to capture peak energy and charges 100%+ of its capacity
each day.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Without electrolysis (or other
useful/monetizable dump), large battery systems are wasted because
there is no dump available to use their energy storage. It is
energy discharge that determines battery value.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 2nd improvement we can make is to
shift 20kw of solar panels to east and west sides (10kw each).
This creates 2 daily smaller power peaks (about 35kw) instead of a
single one (50kw). This reduces total annual power output, but
due to smoother daily production allows us to utilize electrolyzers
more.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Since we no longer care about winter
production maximization, but instead want annual maximization, and we
can use more roof space, A 44 degree south face is optimal and
provides 4.61 sun hours/day in Toronto. 70 degree east/west
angles can be placed along a wall, and capture 3.05 sun hours/day,
but with good performance at sunrise/sunset. This reduces
average daily production (compared to 50kw south facing) from 235kwh
to 199.3kwh (not including the 8% temperature related loss). This 15%
power drop can be profitable if it enables more than 15% reduction in
electrolyzer and battery costs.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 3 sided solar arrangements produce
2 peaks at 9am and 3pm. The 50% electrolyzer strategy (to
capture good 6 hour days) now requires 20kw electrolysis. The
battery strategy that captures all energy if production averages
still 77% of south capacity (+10% of east OR west capacity) over
those 6 hours (23.1+1 kw) means just 24kwh in batteries. This
is a 20% reduction in electrolyzers and 70% reduction in batteries.
Production is smooth enough to achieve the full 10 hour average
electrolyzer utilization. This is 14kwh extra battery capacity
over the 10kwh needed for general home/property non-daylight use.
This arrangement is not obviously better than the equivalent capital
allocated (using 4:1 ratio) of an extra 3.5kw electrolysis (instead
of 14kwh extra battery). Though production will frequently exceed
23.5kw, the (smaller)10kwh battery allows a higher peak 6 hour
average of 25.1kw (1kw higher). On the other hand, when power
is between 20kw and 24.1kw, the larger battery allows for banking the
power to extend electrolyzer use later. If the 2 options are in
fact equivalent, choosing between adding either more electrolyzer
capacity or batteries, its likely that batteries are a better
choice: Battery deterioration will mean more headroom for
home/property non-daylight energy use, and/or a longer time for
battery replacement. Days where a battery does not fully charge
means a day longer of life for the battery.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
So our final system adds 40kw solar,
14kw electrolysis and 14kwh of batteries.at a cost of $57.5k.
Our property uses 15kwh of non-heat electricity per day. Heat
is a free byproduct of electrolysis (about 50kwh produced on average
3 winter sun hours) , and does not require heat pumps saving $5k or
so. Final bill $52.5k (negative cost of initial system is
irrelevant to decision for this higher production alternative).
The system will produce 46.26MWh in first year from south facing
panels including thermal losses on solar cells from hotter days.
20.824MWh for first year sides power. Less 5.475MWh annual household
consumption and the 82.7% production factor over 50 years gives an
average annual surplus of 50.95MWh. Enough to make 1132kg
of hydrogen per year. At a 2% cost of capital ($1050/yr), a
cost of 92c/kg of hydrogen. Backing out the $17.5k in extra
electrolysis equipment, though adding back the $5k in heating
equipment savings, $40k at 2% capital cost is $800/year. If
50.95MWh surplus can be monetized at 1.57c./kwh there is break even.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
This section used costs already
achievable/beaten by utility/large scale projects, though without the
benefits of solar tracking hardware which is worth it because it
provides all day power smoothing with maximum utilization of panels,
and so less batteries and design. The key takeaway should be
that cost of capital can determine/provide ridiculously low costs for
renewable power and hydrogen production.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Its worth noting that the larger system
results in slightly higher cost of hydrogen production than the
smaller one because there is more surplus (to hydrogen) energy on the
larger system and so more electrolyzers and batteries needed to
convert it all. If the costs of small systems can be equal-scaled to
that of larger systems, then distributed solar/hydrogen-production is
that much more attractive.
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Modelling the cost of batteries and
electrolysis</b></div>
<div style="margin-bottom: 0cm;">
A 10000 cycle life battery adds a
1c/kwh discharge cost per $100/kwh of battery cost to the charging
cost of the battery. Ignoring capital costs can be justified if it
is low through supported policy, and balancing it with residual value
(still has some charging capacity) of the battery at the end. A
$300/kwh battery means a 3c/kwh battery cost. The importance of
sizing the battery such that 40%-60% of its capacity reflects typical
non daytime needs (ie. 10 kwh battery for 4-6kwh night electrical
use) is to maximize its planned cycle life by targeting usual
discharge rates. The symbiosis with hydrogen electrolysis is
ensuring multiple partial cycles per day around discharging ahead of
predictable solar charging peaks.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The planned battery costs are actually
higher than real costs because the replacement of end of life
batteries will be much cheaper than at the current ones' time of
purchase. So real costs are based on the expected cost/kwh of the
replacement battery, and using the battery cycles for electrolysis
may bring life from 30 years to 10 years, but batteries have
time-based degradation and many cycles/day over 10 years has much
better value than 30 year hoped life.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
So, a 10kw solar system costing $13k
(2c/kwh) with $3000 for 10kwh batteries, if all electrical output is
used, and most of it used during daytime costs an average under
3.5c/kwh. As noted in above sections, this is not the right model.
Instead, the above system provides 5621kwh year of “essential”
resilient energy (15.4kwh/day average) costing 6.9c/kwh, with the
surplus of 6467kwh per year costing 0, though any monetization/use of
the surplus reduces the “real” energy costs. These figures
include “free” heating needs in Canada.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
For home/business production, the
returns from hydrogen do not need to match the net/perfect 3.5c/kwh
from full generation utilization. If the government will “reimburse”
you for the $3000-$6000 in electrolyzer purchases with a 2% or less
loan once you demonstrate that they are part of a sensible/functional
system, what is enough to make over this amount? I'd suggest that a
50% target over this cost is worthwhile, and reimburses you for the
risk of long term hydrogen pricing. At $1/watt electrolyzer costs
this would make <b>a sale price of $1.66/kg reach this profit target</b>.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Gas utlity competition to electric
utilities</b></div>
<div style="margin-bottom: 0cm;">
With a moderate $18/mmbtu carbon tax,
gas utlitilies would be incentivized to switch to hydrogen.as their
fuel of choice. It has already been discussed that a pure
hydrogen network has far more value than hydrogen mixed in with
natural gas.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Gas utilities delivering hydrogen
at $4/kg would let gas customers get their electricity from there
through a fuel cell. Each kg provides 18kwh of electricity and
15kwh of heat. The 40% heat corresponds to the usual fraction
devoted to water heating, and so with "free"/included water
heating, $4/kg corresponds to a 12c/kwh electricity price (excluding
fuel cell purchase cost). When hydrogen is produced under $1/kg
for later self consumption, if the heat is useful it costs under
3c/kwh (cheaper than batteries most of the time), and if the heat is
not useful under 5c/kwh. A gas utility taking 3c/cubic meter profit
on delivery of hydrogen purchased at the $1.66/kg above cost, means
delivering to customers $2/kg hydrogen, and 6c/kwh domestic energy
value.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Gas utilities do not enjoy the same
monopoly abuse as electric utilities. Customers of gas
companies have the alternative of having propane or heating oil
delivered, and such delivery businesses can start up quickly with
modest capital. While the fossil fuel industry faces an
existential threat as a result of their existential threat to
humanity, the gas distribution business does not depend on carbon
emitting gases. Electric utilities is their current biggest
customer, and when they lose natural gas electric generators as
customers, the network may be underutilized.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
What makes hydrogen a valuable energy
carrier is that it is permissionless. Electric utilities are
the only buyers of electricity generators, and can slow walk the
transition to renewables. Electric transmission has expensive
limited capacity with losses, expensive conversion between current
types and voltages, and balancing demand with its other/legacy supply
interests.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Gas transmission doubles as storage
(Germany has 3 months (ie winter) of energy storage in its
pipelines), and has simple interconnections without conversion losses
or power loss over distance. Hydrogen though less power dense
than natural gas has the advantage of being able to flow faster
through even small pipes, and doesn't raise environmental concerns.
Furthermore, Quadrupling pipe capacity (doubling diameter) increases
cost by 40%, while quadrupling electric transmission nearly
quadruples cost.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<a href="https://ctrf.ca/wp-content/uploads/2014/07/Karangwa2008.pdf">2004
Canadian estimate of gas transmission and delivery cost</a> put
a cost per cubic meter-km at $0.00003. This is 15-25 times less
(depending on whether value of waste heat is included) than <a href="https://www.naturalfinance.net/2019/02/policies-to-enable-home-energy.html">my
estimate of a transcanada electric trade route would cost</a> (though
with 10% cost of capital, and unclear how the linked estimate
considered cost of capital), excluding electric transmission losses.
Fiber Reinforced Plastic pipe (10cm diameter) suitable to hydrogen
transport at 240bar <a href="https://www.hydrogen.energy.gov/pdfs/progress06/iii_a_2_smith.pdf">costs
$50/meter to install</a>
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The storage function of the gas network
has very high value. If a 300 atm tank costs $1/liter and lasts
120 months, then its storage cost per cubic meter-month is close to
3c. (A run of 10cm FRP buried in back yard costs a bit less)
The same cost as transporting it 1000km to a customer. If a
small hydrogen producer (that does not consume) is charged $1000 to
connect to the gas grid without a monthly customer charge, then the
arrangement is far more cost effective than having tanks on site, and
paying for pickup services. The gas network furthermore
requires less compression level (up to 240 bar, but based on how full
network actually is)</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Electric vehicles can be powered by
battery or hydrogen. For personal vehicles that can be charged
slowly at home, and driven up to double the national average range,
batteries offer a more efficient energy cost over hydrogen. But
for heavy vehicles and airplanes, hydrogen offers more range, and in
the case of any commercial vehicle where refueling time is extra
operator cost and lost revenue, pipeline supplied hydrogen refueling
stations can supply energy over 2x cheaper than fast charge electric
stations because they can refuel more vehicles with more energy with
cheaper infrastructure, and they are not dependent of time of day
electricity prices.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Industrial heat is the largest consumer
of energy/carbon (surpassing electricity generation and
transportation) in the US, and generally achieved through combustion
rather than electric heat. Industrial sites are usually high
electric consumers too, and can get huge benefits from solar self
generation with surpluses going to hydrogen production. The
value of self generated hydrogen for combustion is comparable to
natural gas without large volume discount or discounted natural gas
with a small ($6/mmbtu) carbon tax. Hydrogen for electric
generation is 130% more valuable. Pipeline access to hydrogen
and conversion of some heat to electric would reduce daytime energy
costs, and provide power flexibility/options for additonal shifts,
power requirements higher than solar generation, fuel for shipping
vehicles. So power and heat needs can be better provided to
industry by the combination of self generation and hydrogen
export/import from sites.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Electric utility challenges to
overcome</b></div>
<div style="margin-bottom: 0cm;">
The existance/threat of a hydrogen
delivery network is a significant threat to electric utility monopoly
power, and potentially its existence if it does not adopt competitive
consumer friendly pricing and other policies.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Consumer generation of electricity
eliminates the cost of long distance transmission, and through time
shifting, reduces the need for baseload generator services. Not
building more transmission is a saving that can lower prices.
Paying cash for consumer generation can encourage it and use its
existing infrastructure to profit with no investment on its part.
Disinvesting from legacy power agreements the utility does not own,
can reduce use of high priced legacy energy.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Renewable projects that electric
utility supports through tranmission lines should have 4 to 12 hours
of storage to fully utilize the transmission lines. This is
worse (more expensive) than the optimum 1 hour storage + hydrogen,
but it is less expensive than legacy baseload, and reduces time
shifting transition from consumers. The consumer base that will
stay with electric utilities will do so out of habit, and not
pursuing savings investments of their own.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The electric utility can be the utility
that funds/launches the hydrogen distribution network in order to
preempt an independent or gas utility owned one. This pairs
well with providing fair/attractive prices to consumer generators, or
letting large scale renewable plants consolidate electricity
surpluses into hydrogen production facilities such that it can offer
fixed power purchase agreements, or guarantee consumer generator
minimum prices of say 3c/kwh. 3c/kwh price adds $1.35/kg to
hydrogen prices, but it may be a policy that saves electric utility
model, while still providing reasonable priced hydrogen.
Without hydrogen generation, there is no way to guarantee a
minimum/fixed price to generators, unless supply is limited and
energy decarbonization fails. Neighbourhood level electrolysis
is an option/necessity to deal with local surplus power.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 2% or lower capital cost financing
proposal is available to electric utilities as well. Colocating
energy assets (solar and storage) owned by utilities but
rented/consumed from by consumers is a way to leverage the best
efficiency that occurs from site produced/stored energy, leveraging
salaried expert installers and large scale shipping volumes, and
providing consumers with cheaper energy without investment, while not
requiring land/support investments by utility. Consumers can be made
happy just by giving them a small monthly bill reduction even if most
of the profits are kept by the utility.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
It's this last opportunity that
provides the main opportunity for electric monopoly utilities to
maintain control over consumers while profiting from the value they
provide at no consumer risk. For instance, a 10kw solar +
storage system can be accompanied with an $X monthly discount equal
to monthly charge + 15kwh/day consumption with the consumer benefit
of uninterruptible power supply. The same deal can be offered
even if much more than 10kw solar is installed on site.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
With a 100% renewable purpose, hydrogen
(or some other industrial "energy dump") is necessary to
add value/subsidize the needed surplus electric production
seasonality.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Stranding assets as the cost of
green energy transition</b></div>
<div style="margin-bottom: 0cm;">
“Pro business”
conservative/republican politicians reward the rich and powerful from
status quo state by giving them more money and power. It is an
anti-market, anti-disruption, anti-innovation stance that suppresses
investment and opportunity.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Green New Deal proponents who propose
government centered spending to spur energy transition, though, are
wasting resources. The 2 “free” policies focused in this and
previous papers – A carbon tax and dividend, and offering cheap
cost of capital for completed green projects. An important 3<sup>rd</sup>
“free” policy is to allow cancelling/renegotiating fossil fuel
related purchase contracts. Legacy generators can, in the short
term, be paid for standby capacity. Such cancellations would help
utilities accelerate renewable investments and plant closures, in
coordination with carbon taxes. (A great 4<sup>th</sup> free policy
led by California is mandating solar production from new buildings)</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 20<sup>th</sup> century fossil fuel
energy system was not built with government money. New energy does
not need to be either, and politicians promising to control that
money is not a recipe for providing value in the energy transition.
Bernie's climate plan is best for shunning new nuclear energy, but
Andrew Yang's high carbon taxes (helping fund freedom dividend) makes
his climate plan the best even if he has poor expertise in the
climate and energy area. Andrew Scheer (canada)'s pure evil climate
plan is the worst possible central planning corruption: He will hand
free money to polluters so that they can research, using the funds,
how best to exterminate themselves. Just as the EPA has been
transformed into a pro-polluter agency, any government managed
discretionary program is likely to dangerously deviate from
purpose/mission over time.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The entire cost of energy transition
will be borne by the stranded assets that climate terrorists created
and those evil and stupid enough to still own/fund. A common
zombification is that “the successful deserve to have all of their
assets protected from disruption”, because their initial success
was due to some favourable balance of hard work, talent, luck and
starting position.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Though the previous 2 sections dealt
with a path to maintaining relevance for energy monopolies, there are
paths to life without them.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Independent electric and hydrogen
microgrids</b></div>
<div style="margin-bottom: 0cm;">
The first problem with utilities is
their $12-$40 fixed customer charges. They need a fixed charge
because of billing, meter reading, chasing and dealing with non
payments, and funding their bureaucracy. But high monthly charges
are entirely the result of past corruption/failures and an effort to
pretend/disguise that per kwh rates are reasonably unshocking to
“boiled frog” captive customers.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Cryptocurrency/blockchain/smart
contracts similar to the <a href="https://www.naturalfinance.net/2018/02/lightning-network-economics-and.html">bitcoin
lightning network</a> can allow settling energy transfers seconds or
minutes after they are exchanged. Easy to use computer interfaces
can manage it all, and it becomes worth dealing with to avoid the
monthly charges.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A peer to peer (neighbour to neighbour)
electricity network can be set up in urban environments as follows:</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<ul>
<li><div style="margin-bottom: 0cm;">
Standardize on 120V DC current (or
voltage of common AC current in your region)</div>
</li>
<li><div style="margin-bottom: 0cm;">
#2 gauge wire(s) costs
$15-$20/meter. Will carry 9<a href="https://www.solar-electric.com/learning-center/wire-loss-tables.html/">.6kw
56 meters with 5% power loss</a>. Doubling/halving distance or
current will double/halve those losses.</div>
</li>
<li><div style="margin-bottom: 0cm;">
Neighbour that would need to
receive net power from a solar generating neighbour would offer to
pay for connecting the 2 points/homes.</div>
</li>
<li><div style="margin-bottom: 0cm;">
A meter would be placed at
generator's home to tabulate net energy transferred.
Connecting/paying neighbour may choose any wire size they wish but
pays for energy before line losses.</div>
</li>
<li><div style="margin-bottom: 0cm;">
Base pricing can be model based
around seasonality, weather, time of day, where guaranteed
production percentages are made available to importer, and
guaranteed minimum purchases are promissed to generator. A
mechanism to adjust access and minimums with long term notice.
Outside of those parameters, market (bid-ask based) rates would
apply. Computers on each party's behalf manages trade based on
consumption patterns and each side's battery capacities/charge
rates.</div>
</li>
<li><div style="margin-bottom: 0cm;">
Solar generating buildings may
receive connections in 4-8 directions to neighbours.</div>
</li>
<li><div style="margin-bottom: 0cm;">
A net importing neighbour can
receive a connection on the other side of his main connection. That
new connection becomes the first importer's “customer”. First
importer can set a fixed profit spread on 2<sup>nd</sup> importer's
consumption, and to handle times of scarcity, the first importer can
guarantee that at least 50% of energy transferred at 2<sup>nd</sup>
importer's bid prices are passed through.</div>
</li>
<li><div style="margin-bottom: 0cm;">
3<sup>rd</sup> importers would
connect to 2<sup>nd</sup>. As customer of that 2<sup>nd</sup>.</div>
</li>
<li><div style="margin-bottom: 0cm;">
As strings of connections get
longer, anyone part of that string will see the proposition of
installing their own solar generation more attractive, as it
supports lengthening the string length and profiting from sharing.</div>
</li>
<li><div style="margin-bottom: 0cm;">
When “strings” emanating out
of generators meet/become adjacent, it is to both of those
neighbours advantages to connect to each other in order to diversify
their supply routes, including the potential to profit from energy
trade in the opposite direction of their main/initial supply source.
Which side pays and which side controls the meter is a matter of
negotiation, but the side with the “official” meter paying for
it as a minimum offer is a good starting point. If both sides want
the meter, then the negotiation becomes balancing paying for the
wire and smart contract terms for trade/spreads between the two
points. Adjacent neighbours may wish to help subsidize/assist
connecting “strings”, or offer to jump over obstinate neighbour,
as they also benefit from supply diversification.</div>
</li>
<li><div style="margin-bottom: 0cm;">
An urban solar production
facility, under this scheme, has the capacity to deliver 20kwh over
4 hours to points 112m from any of its edges at 5% loss. 224m at
10% loss. Much more power delivered to closer points (allowing them
to share with further points). Any partial solar production or
batteries along the route extends the delivery amount and time
window and practical distance. Where an urban/suburban environment
can be modelled as a chess board with 20m-side squares (400 sq.meter
properties), 8 25 square chessboards can be placed around a large
generator, each consuming an average 5kw. 1MW of solar distributed
through the super chessboard. This power is almost sufficient for
Canadian winters, but its massive in summer. More generation
throughout the square is useful, as are fuel cells to meet winter
peaks/resiliency at high rates for that power. The exact same
dynamics that have been described for single home resiliency apply
to “chessboard peer to peer” microgrid. Surpluses need to be
diverted to electrolysis.</div>
</li>
<li><div style="margin-bottom: 0cm;">
Incumbent utility can participate
in microgrid, offering no-monthly fee crypto settled connections
(that are likely already in place) to any single member of the
chessboard, and doing bidirectional trade with that/those member(s)
and serving far away generators and customers to help smooth out any
surpluses/deficits in a wider region.</div>
</li>
</ul>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 5% edge of chessboard losses are
less than utiltiy provided AC distribution which is 6%, and
converting to AC at the last possible consumption point allows 14%
more solar or battery/fuel cell power to not get wasted. These
wastes are especially apparent with distributed “virtual” battery
systems where AC conversion back and forth is a 10%-14% hit each
time.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The microgrid may have difficulty
supporting large apartment buildings (can also use hydrogen pipes
within building for heat/unit level fuel cells) and
industrial/commercial users users. Any resilient energy system has
to include surplus moments and so access by the electric microgrid to
a hydrogen network is needed to dump surplus energy. If automakers'
claims of 36kw fuel cell currently costing $2000-$3000 are true, then
there is a substantial profit opportunity from even small homes (but
obviously from industry/apartment). The top 200 hourly market prices
each year (cold december/january nights) could average 30c/kwh. A
36kw fuel cell finding 20c/kwh profit over just 100 hours each year
would make $720/yr. More than enough to pay for the fuel cell.
There may also be many situations where heat is needed and
electricity not by the fuel cell owner, and so selling that
electricity from a fuel cell would have competitive advantage over
battery discharged energy. The fuel cell provided electricity may
also come from a FCEV (car) with vehicle to grid connections, though
a car cannot burst as much energy into the grid as quickly.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
For sparse rural properties, not
choosing a self sufficient solar production is retarded. Not having
space/solar access is the only excuse not to go solar. They need
access to a hydrogen network mostly in order to dump all of the
energy they are able to generate. Not farming solar energy on a
large property is also retarded. Even if they do not need to consume
hydrogen, a pipeline somewhat near them likely connects urban,
industrial areas or distant wind farms. Access for supply reasons
though opens up demand opportunities.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
10cm 240atm FRP pipeline is extremely
cheap to install ($50/m) as it comes in mile long spools and do not
need welding for longer runs. A small crew can install miles per
day. It delivers up to 33MW of energy sustainably all along the
pipeline, 18MW of which can be converted to electricity. It is
bendable in a relatively tight circle (2-3m radius), and suitable for
buried compressed storage, or coiled at bottom and sides of a
circular pool. Technically, it might be feasible to have the same
peer to peer hydrogen network as the electrical system, but a
neighbour is not particularly likely to need hydrogen if you can
provide them with electricity, and the cheap installation costs of
spooled FRP come from deploying long lengths.
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
That one entity would own a long
segment of pipe does not mean that crypto transactions settled near
immediately aren't the right way to deal with hydrogen flow, and does
not preclude different ownership of different pipe segments. There
are 3 special issues with a decentralized hydrogen network
transactions: 1. Depositing into the network does not imply a sale
has been made. 2. The losses in the network while lower than electric
wires or batteries, exist, and if there is no broker guaranteeing a
price, need to be attributed to the seller/depositor. 3. Segment
owner refuses to quickly repair a leak in their segment, compromizing
an entire line value and potentially the contents therein.
Addressing the 2<sup>nd</sup> issue first...</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Losses in a hydrogen pipeline (of
constant size) are a linear function of pressure. <a href="https://www.energy.gov/sites/prod/files/2014/03/f10/pipeline_group_smith_ms.pdf">At
103bar pressure, 10.1cm diameter pipe from fiberspar</a> will hold
8252 compressed liters per linear meter. 220bar capacity is
1.45kg/m. Losses would be 0.005 liters/day. 6/10000<sup>th</sup>
%/day in losses. The unit losses double at double the pressure, and
halve at half the pressure, but the percentage is constant. These
losses are very low but need accounting.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
To the 3<sup>rd</sup> issue, breakage
and repair, chain of custody through pipes must be tracked, a bond or
insurance by segment holder is required to cover potential loss of
gas, and a service contract responsibility must exist for the whole
line. The only practical solution is that the entire line of pipe is
an organization whose shareholders are the segment holders.
Something like 1 share per meter. The organization collects revenue
from network withdrawers, and funds a budget for inspections,
maintenance and repairs. Blockchain helps shareholder accounting
too.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
As to the billing issue, a single
entity for dispensing or deposit transactions is a major simplifier.
There are several mechanisms to address the deposit/withdrawal lag.
3 day rolling futures contracts where depositor and withdrawer have
3 days to complete their commitments or buy back missing portion of
contract at a penalty. Another method would allow the pipeline to be
used as storage, letting a depositor place a reserve (sale) price,
and to discourage setting too high of a reserve price the depositor
pays a storage fee for the time until their price (which can be
modified) is met. The storage fee would rise as pressure in (how
full) the pipeline rises. Previously deposited hydrogen with a
reserve price can be switched to meet “futures” delivery
commitments, and market purchased deposited hydrogen can offset
“futures” purchase commitments. Derivatives that allows
speculators to provide producers and consumers with fixed seasonal
prices should also be part of trading platform.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Network compensation is a fee per cubic
meter delivered as well as the above storage fee. Alberta has one of
the lowest gas delivery fees at 3c/cubic meter. That seems very high
long term for hydrogen. For one, hydrogen has the potential to
replace not only traditional natural gas uses, but also fuel the
entire transportation sector. It is less energy dense than natural
gas, and so more is required for same purpose. A 1.5c/cubic meter
delivery fee would be equivalent to 1c/kwh from electrical fuel cell
output. This still seems high as daily turnover of the pipeline
would return 27c/day/meter giving a payback on (20-50 year life)
pipeline cost of under 200 days. Though there is an operational
budget to fund. The storage fee would be paid in hydrogen,
transferring a portion of reserve-priced deposits to the network
organization each 1 to 4 hour period, and offered for immediate sale
at a matched rate to lowest offer price.. These fees would more than
cover the diffusivity losses in the network. 10x the loss rate for
up to 100 bar pressure, 500x at 200 bar, and 2000x over 230 bar.
These are percentage rates of 0.006%/day, 0.3%/day, 1.2%/day. The
main reason for the storage fee is that prices are likely to be
highest in winter (though southern US has solar surplus potential in
winter and north/south pipelines are allowed), and spike on a
specifically bad weather winter day, and depositing in late spring
hoping to get winter emergency prices would mean 8 months of storage.
As the network gets full, incentives to clear it out need be
applied. Payment in hydrogen does lessen the cost as the percentages
get applied to a declining balance. The storage fee allows
significant reductions in delivery fee, but also encourages
alternative (self) storage arrangements as pipeline fills up.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Interfaces to network clients (both
suppliers and consumers) are paid for by clients. Standards for
meters, gas purity of supply systems/equipment, consistent dispensing
interfaces, and roadside point of sale systems, and perhaps valve
checkpoints on each large interface, all need to be enforced by the
hydrogen network, but ideally, through a single global standard.
Supply interfaces could be responsible for adding pressure into the
pipeline, and demand interfaces that need very high flow (or
pressure) would be responsible for sucking pressure out. The normal
pipeline structure to maximize flow rates involves repeating
compressors along the length. If we assume many suppliers though,
there will be enough pressurization, vehicles can store up to 700
(900 in future) bar even if they don't draw much from the pipeline,
so sucking may be part of required refueling dispensers anyway. As
the hydrogen economy successfully overtakes much of the regional
energy mix, then it will make financial sense for pipelines to invest
in improving flow rates (and invest in larger pipes).</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Direct to hydrogen “utility scale”
renewable projects</b></div>
<div style="margin-bottom: 0cm;">
Avoiding the cost of high voltage AC
conversion and transmission lines is the next step in drastic cuts to
renewable energy project costs, though cost of capital policies
reducing it from 8% to 2% is a 50% cost reduction, and 50 year PPAs
another 10%-20%). A record low US Power Purchase Agreement of
<a href="https://www.pv-magazine.com/2019/03/27/new-record-low-solar-power-price-2-175%C2%A2-kwh-in-idaho/">2.175c/kwh
was set in the fairly north state of Idaho</a>. The justification
for what is likely 1c/kwh lower than a site at that lattitude would
price a contract is that it is taking over the electric substations
of a decommissioned coal plant. By all means replace all legacy
generating assets already on the grid with large solar+battery
systems that reuse those expensive substations, and the limited
transmission lines that feed cities.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The reason we have Time-Of-Use pricing
on our grids, despite legacy generation's baseload/constant power
output, is to shift/equalize use of our transmission lines. Daytime
rates are higher than night. Reversing TOU rates such that they are
low when it is sunny not only requires high solar penetration (40%+),
it requires high distributed/urban solar production that does not use
limited transmission capacity. As shown earlier, a hydrogen
production outlet for renewable energy guarantees a price floor for
the electricity production. A sale price of $1.80/kg H2 is
equivalent to 4c/kwh electricity sale. If the amortized cost of
electrolysis is only 45c/kwh, then even if hydrogen prices drop to
45c/kg, a guaranteed price floor of 1c/kwh still pays for the
electrolyzers, and you can refuel your quiet hydrogen powered speed
boat for 22c/gallon-gasoline-equivalent energy instead of selling it.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The power of having a price floor for
energy projects, and a capital cost policy that provides near upfront
cash repayment of most of the project cost, is that a PPA agreement
is no longer necessary for financing renewable projects. The
critical benefit is that renewable project plans no longer need
permission from climate terrorist supporting utilities with business
model ties reliant on climate terrorists, and regulated by climate
terrorist supporting politicians in order to install all the projects
they want. Not being limited by transmission availability further
expands project locations.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Going direct to hydrogen is a different
proposition for solar vs wind. For solar, tracking is essential to
have a smooth power curve during a long day and fully utilize
electrolyzers. A small battery may still be useful for modulating
through cloud cover, but the simplicity of direct connections to
solar may reduce electronics and intermediate losses. $1/watt solar
and range of $500-$1000/kw electrolysis-45kwh/kg. 8 sun hours
(southern US) tracked/day 82.7% of production average over 50 years =
120.7kwh/kw - 0.83c/kwh electricity cost with capital cost =
inflation. Produces 53.66kg/year per kw solar+electrolysis. At 3.2%
amortized (2% cost of capital + 1<sup>st</sup> year principal over 50
years) repayment = 29.8-59.6c/kg of hydrogen for total (+ 0.83c/kwh
* 45kwh/kg) of 67c-96.8c/kg (ignoring heat degradation). The same
setup in Toronto results in 1.18c/kwh, 37.56kg/year, 42.6c-85.1c/kg
electrolysis amortization, and total hydrogen cost of 95.8c-
$1.38/kg. Residential/business systems do better than these prices
because they use the electricity/heat (and land), and the number of
electrolyzers is allocated to handle just electric surpluses.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Wind power is highly variable. A
turbine rated at 8MW for 10m/s wind will produce 1MW at 5m/s. The
electric generators coupled to turbines almost all cut off at 12m/s
or 10m/s due to challenges of having to transmit higher power. The
same blade design that produces 8MW at 10m/s, would produce 64MW at
20m/s.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A 8MW turbine operating at 40% capacity
produces on average 3.2MW. If that 40% were produced as 9.6 hours of
10m/s wind and the rest of the day, no wind, then 3.2MW of
electrolysis would need to be paired with 46.1mwh of batteries, which
happen to luckily take exactly the remaining non-producing part of
day to discharge into electrolysis. 100% electrolyzer use. Constant
3.2MW production also has 100% electrolyzer use with 0 batteries. 12
hours of 6.4MW average with 12 hours of 0 needs “only” 38.4mwh of
batteries. I'll use this latter size still hoping for 100%
utilization at 3.2MW. 30 year lifetime including battery as it has
slow charge/discharge rates. $1.3/w for turbine, $250/kwh for
batteries, $500-$1000/kw for electrolyzers: $10.4M turbine, $9.6M
batteries, $1.6M-$3.2M electrolysis = $21.6M to $23.2M total,
amortized payment (4.5%/year) of $1M/year (near higher end of $1/w
electrolysis cost). 28.03gwh/year production = 3.56c/kwh 24/7
baseload power (if no electrolysis equipment, 3.1c/kwh baseload).
622.9 tons of hydrogen produced. Cost = $1.605/kg.
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The 4:1 cost ratio of electrolyzer kw
to battery kwh cost mentioned at beginning of paper is important, and
in the above scenario, there is way too much battery. 6MW of
electrolyzers with a cheaper turbine whose generator tops out at 6MW,
and costs $1/watt brings cost down to $11M-$14M. If capacity factor
goes down to 30% or 2.4MW average, amortized costs are
$495k-$630k/year, hydrogen production 467.2 tons. $1.06-$1.35/kg</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Offshore wind has higher capacity
factors due to high sustained winds, and massive efficient turbines
that may be shipped/erected there. If removing all electrical
connections to shore brings costs down to $2-$3/watt and allows
floating hydrogen production anywhere on the ocean, then either
trans-ocean pipelines filled by strings of wind turbines are
possible, or ship refuelling at sea, or tanker pickup of hydrogen in
hops. With 70% capacity factor, and full 8MW of electrolyzers, for
turbine costing $16M-$24M, and electrolysis $4M-$8M for total of
$20M-$32M. 1090 tons hydrogen/year produced at cost of $900k-$1.44M.
$0.825-$1.30/kg cost.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
While large scale renewable hydrogen
projects described here do not beat co-purposed small scale
locations (described earlier), the small scale costs are aspirational
based on these large scale costs. The same case for locating
renewables that reuse AC transmission infrastruture left behind by
exterminated legacy power generation, direct-to-hydrogen projects
located near exterminated gas supply pipelines to get free
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The other case for hydrogen in mass
scale renewable energy projects is as a hybrid with AC power
transmission and batteries. Very similar to the small battery home
scenario, the battery serves as an arbitrage device to sell power at
night, and hydrogen production serves as a price floor for surplus
generated electricity. For traditional renewable only, and quite
common recently, renewable + battery, this reduces costs of
transmission and battery size, and reduces electrolyzer sizes from
this section, gaining the economic benefits of producing hydrogen
with 0 cost surplus energy from earlier sections, and supporting 100%
renewable energy that is 100% competition risk free.
</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b>Ramping up to green hydrogen economy</b></div>
<div style="margin-bottom: 0cm;">
There is a cost decrease, supply,
demand, infrastructure feedback cycle for hydrogen, the most
important of which is cost relative to climate destroying
alternatives. Batteries are not really a competitor to hydrogen
because hydrogen has unlimited storage potential at close to
$1/watt-hour, more efficient and cheaper than electric transmission
at a distance, and sufficient energy density to power any
transportation method including rockets. Coal is the easiest fossil
fuel to exterminate, and is happening at a reasonable though still
slower than ideal pace. Gasoline is 2<sup>nd</sup>, natural gas
last.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A carbon tax in the US is the most
important policy for fighting climate change, and accelerating energy
transition, because it is the biggest international market, and
border carbon adjustments (similar to tarrifs) would compel countries
already more publicly supportive of fighting global warming to adopt
(with business support) carbon accounting and retaliatory carbon
pricing for their international trade. It would be contagious for
all of those other countries' trading partners. Political acceptance
of a carbon tax is easy if the revenue is rebated as a cash dividend
to tax payers, and even easier if it partially funds an even larger
<a href="https://www.naturalfinance.net/2019/06/andrew-yang-and-democrat-tax-proposals.html">freedom
dividend</a>/UBI.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
A carbon policy that creates a path to
$6/gallon gasoline is the best policy to spur battery and hydrogen
electric vehicles. $12/kg hydrogen parity means $6-$8/kg is a
significant incentive to switch. Commercial vehicles are the most
important to oil extermination, because it is not owning an EV that
reduces emissions, it is driving one long distances. Electric buses
in China have displaced much more oil use than global electric cars
have. As long as a carbon tax ramp up leads to a somewhat near term
$6/gallon gasoline price, oil will get exterminated as long term
ownership of, especially commercial vehicles, will be too costly.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The hydrogen economy is more suited to
cold latitudes as it provides a heat bonus to electric generation,
and vehicle range is not compromised by cold compared to batteries.
Just as importantly, cold latitudes have massive solar energy
surpluses in summer when meeting winter energy needs with renewables.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
Because too many people are stupid and
easily deceived, an even easier politically supportable policy than
giving people more cash back than carbon taxes would collect is low
interest loans for successfully deployed green economy projects. For
renewable energy projects, only those that include a path to hydrogen
production justify risk free interest loans, because it is only those
projects that guarantee a price floor for energy, and guarantee
use/marketability (distant exports an option) of all energy produced.
These loans cost society/government nothing, generate jobs and tax
revenue, and support national industrial policy for green energy
dominance/competitiveness. Whenever no one left in the world can
justify a larger speedboat, and earth consumption of hydrogen no
longer justifies production increases, we can use hydrogen to
exploit/colonize space.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
2% or lower capital costs for hydrogen
electrolysis and delivery systems makes electrolysis today cheaper
than hydrogen production through fossil fuels (when natural gas costs
$4/mmbtu or higher, which best wholesale requires only $1-$2/mmbtu
carbon tax to exceed fossil costs everywhere), where the hydrogen
production cost bar is set at $1.50/kg. Hydrogen is already part of
the global economy. <a href="https://www.iea.org/tcep/energyintegration/hydrogen/">Over
82M tonnes in 2018</a>. 60% of which is non-fossil-fuel-refining
related. With 2 hours/day surplus solar, and 6 hour/day electrolyzer
use, this production would support 1.68GW of electrolyzers (800 times
2018 sales), and 5.05GW (~5% of global production) of solar.
Electrolysis has the advantage of producing hydrogen closer to where
it is needed for chemicals, including smaller batches close to
consumption centers of those chemicals. So in addition to saving
costs on natural gas shipping, it saves on shipping cost/time to
customers.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
While an $18/mmbtu carbon tax on
natural gas benefits all of society when the tax proceeds are
redistributed as a cash dividend, there exists the regulatory
alternative of forcing of natural gas networks to include up to 25%
of volume as hydrogen in their pipelines. Such a ratio does not
require any device using natural gas to be changed. An equivalent to
$18/mmbtu carbon tax (where pipelines are encouraged to blend green
hydrogen without being forced to) is a $2/kg premium over the natural
gas energy equivalent of hydrogen of $1/kg per $9/mmbtu-nat-gas.
Forcing/enticing natural gas pipelines/distributions to pay $3/kg for
any green hydrogen brought close to their network would bring a gold
rush in electrolysis. Over 100M tonnes of green hydrogen
production/year would be supported by this policy. With previous
parameters, another 2.05GW of electrolysis equipment, and 6.15GW
solar is supported by these policies.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
The above policies are sufficient to
rapidly increase production/demand for electrolysis, and
substantially decrease costs as a result of their learning and scale.
This process can happen intensely one region at a time. The
resulting cost and price reduction of hydrogen will drive demand, and
the supply of and research into fuel cells and their applications.
It would cut any previous hydrogen roadmap timeline in half.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
There are 3 interesting fuel cell
sizes, though I'm not sure the “packaging” matters that much.
Bicycle (50w-200w), fork lift (2-5kw), and car (25-113kw). The
“industry” is focusing on car sized fuel cells, and rightfully
so, because everything in the transportation sector larger than a car
can be powered by multiples of them, scale would be massive, and it
is a major energy consumption sector. But it is the forklift size
that is most appropriate for single family sized combined heat and
power applications, and CHP justifies distribution pipelines and
large scale dispenser manufacturing. It is pipelines that will drive
down the end user price of hydrogen, and also permit large scale
distributed solar. Small (“bicycle sized”and medium) fuel cells
have a high potential use for emergency, camping, developing world
energy. It also pairs well with paintball sized hydrogen connections
for mobile power in robotics/battery centric applications or
portable heat/welding. Something that has been too slow to occur is
providing an affordable commercial fuel cell for
integrators/application engineers to simply purchase.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
As a precursor to pipelines, solar
powered self supply for homes and businesses (and whole communities)
is the cheapest source of energy and hydrogen. Storage through
buried 4” FRP coils can support “curb side” dispensing taps
that provide neighbourhood or apartment complex quick refuelling for
vehicles and “paintball” tanks at “convenience pricing” which
would allow homes and businesses to monetize energy surplus at
10c-20c/kwh, but also allow for easy access from pickup/delivery
services to pickup large loads.</div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<ul>
<div style="margin-bottom: 0cm;">
<br />
<br /></div>
</ul>
<br />
<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com19tag:blogger.com,1999:blog-2467928492793719077.post-19451284236068116782019-06-27T13:39:00.000-07:002020-02-29T11:12:25.537-08:00Andrew Yang and Democrat tax proposalsAndrew Yang is the smartest candidate running in 2020, and his basic income platform is necessarily the opposite of massive emperor budget gathering to pay for corrupt cronyism. It is the only genuine and effective path to eliminating poverty, and forges a path to great economic growth and higher incomes for all. Bernie Sanders also has a genuine hope for America, but has some poorly thought ideas, and criticisms. Either would make the greatest US president in history, however. A short case for UBI with his funding scheme and concise rationale for it:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe width="320" height="266" class="YOUTUBE-iframe-video" data-thumbnail-src="https://i.ytimg.com/vi/hS9wOdenEys/0.jpg" src="https://www.youtube.com/embed/hS9wOdenEys?feature=player_embedded" frameborder="0" allowfullscreen></iframe></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
Summary:<br />
<br />
<ul>
<li>$3T headline cost from 250M adult Americans each receiving $12k/year.</li>
<li>Reduced by $1.2T because UBI is not on top of existing social programs. Opt-in that allows individuals to choose whichever amount is higher.</li>
<li>$400B in new tax receipts as a result of growing economy. This implies with a payroll and income tax rate of 33%, a $3T economic growth which is credible with $1.8T democratic cash injection + new employment income related to collecting that $1.8T in new spending. Middle and upper classes can spend more and save less with UBI as their financial security is also enhanced, including children's future education and income security.</li>
<li>$200B in savings from less crime (directly less incarceration), no homelessness (less police and health "homeless management services"), and sickness (mental and physical stress related to income security causes consumption of health services)</li>
<li>Productivity increases and higher educational attainment created directly from lower financial stress of parents leads to another $400B in revenue/savings. If all of this were in the private sector, it would imply another $3T in economic growth. While the previous 2 items are conservative estimates, this one will take time to translate into growth and revenue. But it is in total,a t most $100B-$200B optimistic. Pentagon budget is over $800B, so there is money to find in the couch cushions and banana stand.</li>
<li>The rest, $800B, comes from a 10% VAT tax. This revenue path is justified by how the great winners of the new economy and automation pay very little in corporate income taxes.</li>
</ul>
<div>
This is much smarter than any other candidate's proposals, and shows just how little UBI costs, but we can do MUCH better with tax reform, including a much better way to address Yang's concerns about automation, and other democrat candidates' revenue ambitions. But first, a bit more about UBI.</div>
<div>
<br /></div>
<div>
<b>Freedom Dividend</b></div>
<div>
The Freedom Dividend is a great term, that Yang uses for UBI. The only rational objection to a freedom dividend/UBI is if your income/happiness relies on the oppression/slavery/harshness of other people.</div>
<div>
<br /></div>
<div>
A coal mine needs to exploit its workers, trap them into company store, cancel their health insurance and pensions, and the coal generator needs to poison the water supply with coal ash. They need/want these powers because in part the people they harm aren't relevant to their customer base, but also in part because cost cutting means more profit for them.</div>
<div>
<br /></div>
<div>
Walmart, Amazon, McDonalds have poor reputations for treating their workers. But their business model does not require oppression. These corporations make more money if their consumer communities have broad spending power, even if it means paying more for workers, than if their consumer communities are mad max hellscapes. Most of the business side of the economy is in this category of potentially benefiting more from increased consumption spending than from increased oppressive power.</div>
<div>
<br /></div>
<div>
As human beings whose oppression level is being wagered, the freedom to survive without submitting to an employer is the greatest, while still fair, boost to bargaining power to permit opportunity and fair income offers. The alternative of powerful unions limit the overall employment level to a few high paying jobs, and in order to be powerful, require worker scarcity.</div>
<div>
<br /></div>
<div>
<b>Joe Biden's dignity</b></div>
<div>
Joe Biden is against UBI because "work provides dignity". If he and other seniors were to forgo all of their social security and pension income, to struggle for dignity, then the national debt would be paid down in a few years.</div>
<div>
<br /></div>
<div>
UBI, with the right tax code, does not discourage work. Income conditional aid programs do, because striving to escape low income incurs oppressive clawback+tax rates.</div>
<div>
<br /></div>
<div>
Dignity and self worth comes from success. Success is much easier with more job openings that have fewer competing applicants to fill them. By all means, if you are concerned for people's dignity and self worth levels, sponsor public service announcements outlining the self esteem benefits of work. But people already understand income/money is good. It is only republican kleptocrat thieves who want to reserve the dignity of success only for those who already claim it, through a harsh world where intense struggle to survive means coerced servitude to the dignified. </div>
<div>
<br /></div>
<div>
Shame on Joe Biden, and other filth, that wants to limit our freedom and opportunity to competing over the crumbs they let trickle down. Dignity only exists if your circumstances permit refusing a demeaning act in servitude to Joe Biden.</div>
<div>
<br /></div>
<div>
<b>Alternative tax system</b></div>
<div>
A VAT is not the best proxy for a robot/AI tax, and it fails to capture revenue from the real wealth generated from current and future society.</div>
<div>
<br /></div>
<div>
<b>A robot tax is impossible, but taxing employees the same as machines is easy</b></div>
<div>
A robot tax gets proposed frequently as a distraction, but it is impossible to define what a robot is. The pipes and wires going into your home are robots. Elevators and vehicles are too. Narrow definitions of robots that would exclude these, would stifle innovation and cause needless evasions of the definition. SUVs were created because they escaped the definition of a car, and so escaped their regulated emissions.</div>
<div>
<br /></div>
<div>
The first step in taxing employees the same as robots is to eliminate payroll taxes. In the US, this is 15.3% per employee, with the employer paying half of this tax. It only applies to the first $128k in employment earnings. More revenue is raised from payroll taxes than income taxes. Machines and contractors are not subject to payroll taxes, and have lower direct cost to employers.</div>
<div>
<br /></div>
<div>
Eliminating payroll taxes and replacing it with an additional 15.3 percentage point income taxes giving all employees an automatic 7.65% pay raise would leave all moderately paid employees equally well off, but raise significant social revenue, as the tax would apply to high paid employees, investment/rental income, and businesses that find ways of paying the operator without salary. If no additional social revenue is desired a smaller replacement tax can be applied</div>
<div>
<br /></div>
<div>
Employer paid healthcare also does not apply to machines. A universal model for at least core coverage would eliminate the human penalty. Those costs could further be transformed onto higher worker wages to offset any higher income taxes related to funding universal health care.</div>
<div>
<br /></div>
<div>
<b>Equalizing business, investment and employment income tax rates</b></div>
<div>
Lowering business income taxes reduces business investment and spending. It does not increase it as the kleptocrats (receiving lower business income tax rates) claim to justify social transfers onto them. Lower business income taxes means a lower tax credit for business spending, thereby reducing incentives for businesses to spend/invest, and increasing incentives for them to harvest profits by cost reductions, store and plant closings.<br />
<br />
Equalizing business, investment, and employment tax rates means raising the first 2, so that employment income taxes can be reduced. While a flat income tax is regressive (like a VAT), when it is matched with a freedom dividend, the overall personal tax system is more progressive. ie. even if someone's tax rate was 10 pct points higher, they face a net tax reduction at an income below $120k/year if they also receive a $12k/year freedom dividend.<br />
<br />
Equalizing the 3 tax rates is an important criteria, and one of the principal justifications, for <a href="http://www.naturalfinance.net/2016/04/the-panama-papers-republicans-tax.html">eliminating tax evasion. It is also critical that a business expense can only be deductible in the same jurisdiction as where the income is earned by the other party.</a><br />
<br />
An increase in investment income taxes is specifically appropriate because a freedom dividend is a safety net for investors and landlords. They also do not pay payroll taxes.<br />
<br />
An important point to underline is that a high business tax rate does not have to raise high revenues from businesses. The easiest way to avoid taxes for business is to spend profits on expanding its operations, which is usually great for the economy and employment.<br />
<br />
An interlude before tying up these last 2 sections into a comprehensive tax plan.<br />
<br />
<b>A VAT system is a disguised form of business income taxation</b><br />
In Canada's VAT system, a company gets credit for supplier purchases, but not for employee costs. If supplier purchases exceed revenues, a company can get a cash refund for VAT from the year. The VAT is added on top of sales prices (but included in Europe), and the only difference is that adding it on top at the cash register makes the business feel better about the tax and the consumer worse, or misled about the end price while shopping, whereas including it in the sales price makes the business feel worse.<br />
<br />
So a VAT is a corporate income (profit excluding wages) tax that is disguised a little, but also impossible to avoid. The lack of avoidance is Yang's rationale for implementing a VAT as his revenue raiser but there should be an obvious improvement that was hinted at in previous section:<br />
<br />
Business income taxes that are reduced by both supplier and employee costs. When these exceed sales, a cash refund should be available to the business. Only expenses (and productive asset purchases) paid in this country are deductible from this country's sales (like the VAT system, but including wages).<br />
<br />
When a VAT system is introduced, and prices are not lowered, it is a giveaway to corporations because consumers pay the full price added by the VAT, while businesses gain new refundable tax credits.<br />
<br />
<b>The right tax rate</b><br />
When a freedom dividend is paid, collecting too much revenue is not a problem. Surpluses can increase the dividend.<br />
<br />
A high tax rate also has the benefit of making any government funded projects return a high portion of their costs in terms of social revenue.<br />
<br />
The highest tax rate that conforms to a psychological level of not blocking work incentives, and/or not creating significant price and wage pressure. Two candidates for such an income tax level are 33% and 25%<br />
<br />
My <a href="https://www.naturalfinance.net/2018/12/deficit-adjusted-gdp.html">natural taxation proposal uses the high 33% figure</a>. It applies as both personal and corporate income tax rates (only domestic spending deductible). There is a 5% surtax on employment income above $100k, and a 10% surtax on investment income. There are no payroll taxes, and dividends are tax deductible to corporations. The amount of taxes raised from this plan is $8.3T on a $22T economy.<br />
<br />
<blockquote class="tr_bq">
<span style="background-color: white; color: #333333; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 14.85px;">In a $20T GDP economy, natural taxation raises $6.6T as base + $50B from high income surtaxes + $880B hoarding surtaxes = $7.53T. In a $22T economy, this is $8.3T. $5T more than current revenue. Enough to pay a basic income to 300M adult Americans of $16k/year, before any of the spectacular growth UBI provides. A household with 2 earners of $100k each would pay a 17% effective tax rate (including $16k refund) including payroll taxes, and so effectively 10% 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 5.66% 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 $5T in UBI funded by hoarders means $5T 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 $1.8T in tax revenue, $1.8T in productive earnings and potential consumption, and $1.2T in additional after tax hoarding profits. $3.2T of that $5T is a further increase in GDP and potential UBI and spending and additional profits to hoarders. A 37% increase 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.</span></blockquote>
</div>
<div>
<br /></div>
<div>
If $3T of this revenue were applied to universal healthcare, then $2T would be left over. $1.2T higher than the $800B Andrew Yang wants to raise for UBI. This allows, under Yang's economic model, an extra $4000/year in freedom dividends to 300M Americans.<br />
<br />
Switching to a 28% flat personal/corporate tax (same surtaxes) would reduce revenue by $1.2T, still funding universal healthcare, but eliminating the funding for an extra $4000 in freedom dividends.<br />
<br />
The case for the 33% tax rate is the additional independence provided by the extra $4000 ($16k total) freedom dividend, the additional savings from existing assistance program clawbacks and program elimination, the additional value any remaining government program/spending would provide (higher tax rate means spending generates revenue), and the higher business spending that is incentivized (higher tax rate means higher tax reductions for spending). From the full paper on deficit adjusted GDP, a <a href="https://www.naturalfinance.net/2018/12/deficit-adjusted-gdp.html">higher tax rate that impacts hoarders necessarily leads to higher economic growth </a>as well.<br />
<br />
<br /></div>
<div>
<b>wealth taxes</b><br />
Wealth taxes are generally a bad idea because, unlike income taxes, there's no tie between wealth and a nation, and so capital can be chased away without any benefit. A notable exception is below (after next paragraph).</div>
<div>
<br />
The wealth generated in past 10 and next 100 years is mostly in tech company stocks, many of which are unprofitable, and many that don't need external capital unless it comes with great terms (dual class shares, no dividend prospects) from the muppets who want to buy in. Unprofitable companies are great for consumers, employees, and suppliers as the company in its unprofitable phase is giving to rather than taking from society. Yet, great wealth is generated for founders through insider stock ownership. They have the privilege of monetizing that wealth tax free by borrowing against it and/or dictating their own salaries.<br />
<br />
An insider tax that would take 0.1%/year of shares owned by insiders (without voting rights for government stake), and up to an additional 0.2%-0.5% for very high public share values owned by insiders and their heirs/families/trust beneficiaries. If the 0.2% rate kicked in on share values above $50M, and 0.5% kicked in on share values over $1B, the overall tax take over a 40 year period would be 3.93%-19.2%. Because UBI and M4A does so much to permit (through freedom to fail) entrepreneurship in the US, there would be no impact on wealth creation efforts. For shares that are not public or in specialized private market places that create liquidity, the tax on these shares could be collected by sales requiring an allocation of the government's stake be part of the transaction. There would be no liquidity burden to pay the tax, as it could be paid in-kind with shares.<br />
<br />
With a surtax on investment income, it may not be necessary to add a wealth tax. The loophole with investment income is that the wealthiest entrepreneurs can delay earning any. There is a high likelihood that the current wealth concentration will continue as the largest tech companies seem to have an edge in further innovation. This wealth tax is worth considering to either lower the base flat tax rate, or increase the freedom dividend such that innovators have customers to sell to, get richer, and pay more taxes.<br />
<br />
<b>Green New Deal</b><br />
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">Where
the GND recommends job guarantees it is misguided. It should
identify projects where government direction is needed, and then
propose funding them, and any needed hiring should always follow
rather than lead projects. The US energy sector is done through
state utilities and programs, and energy investments cost nothing
because they are designed for returns greater than costs.
Retrofitting existing buildings has much lower returns/benefits
compared to accelerating the transition to 100% renewable energy.</span></span></div>
<br />
<br />
<div style="font-style: normal; font-weight: normal; margin-bottom: 0cm; orphans: 2; widows: 2;">
<span style="color: black;"><span style="font-family: "times new roman";">I
strongly advocate<a href="https://www.naturalfinance.net/2018/03/the-only-solution-to-preventing.html"> a carbon tax and dividend (tax revenue returned ascash rebate to residents) scheme.</a> With Yang's freedom dividend,
slaver opponents cannot use the theoretical poor little old lady that
must frequently drive into the city for healthcare as an opposition example. A
carbon tax of any amount also costs nothing if it is rebated in its
entirety as a dividend. Last year, I recommended a $1000/ton carbon
tax pathway, but technology has already advanced well enough that
much lower rates would be effective:</span></span></div>
<div style="font-style: normal; font-weight: normal; margin-bottom: 0cm; orphans: 2; widows: 2;">
<br /></div>
<ul>
<li><div style="font-style: normal; font-weight: normal; margin-bottom: 0cm; orphans: 2; widows: 2;">
<span style="color: black;"><span style="font-family: "times new roman";">$20-$50/ton
would eliminate all new electric coal and natural gas plants as long
as tax keeps increasing to offset collapsing natural gas prices.</span></span></div>
</li>
<li><div style="font-style: normal; font-weight: normal; margin-bottom: 0cm; orphans: 2; widows: 2;">
<span style="color: black;"><span style="font-family: "times new roman";">$200/ton
(= $2/gallon of gasoline) bringing gasoline prices to a net
$5/gallon would be enough to rapidly transition vehicles to battery
and hydrogen power. As $5/gallon means $20k per 100k miles of fuel
costs on a typical car.</span></span></div>
</li>
</ul>
While its possible to set individual taxes on each fuel, and to balance them with smaller carbon taxes, and incentives for alternatives, a carbon tax is essential to exterminate fossil fuels, because as alternatives are deployed, fossil fuels get cheaper. Cheaper fossil fuels does lower development of new resources, but it doesn't stop the draining from existing wells and mines. Compared to a carbon tax and dividend (which costs nothing: rebates = costs), incentives and regulations increase prices without providing rebates to all, but politicians need to summer in the Hamptons too, so some mix of policies (including those with costs) above and beyond a carbon tax are acceptable waste of politician attention. The important ones:<br />
<br />
<ul>
<li>Mandate electric utilities to lower consumer rates by building out renewables and storage that enables them to close FF plants. (0 cost, consumer positives)</li>
<li>Mandate electric utilities to permit it customers high solar generation levels. Including policies for net cash rebates to consumers. (0 cost, consumer positives) Utilities that don't want their consumers competing with them should lower rates by building out cheap large scale renewable power.</li>
<li>Aim to convert natural gas transmission/delivery grid to hydrogen. Near term mandates for new appliances to support dual fuels. 20%-25% of hydrogen can be mixed with natural gas without appliance changes in near term. 10-15 years after dual fuel mandate initiates, full hydrogen gas network is possible with minimal disruption.</li>
<li>Large industrial gas users should be switched to pure hydrogen pipe supply where they are concentrated as the earliest step. Surplus hydrogen from these pipelines is what should be blended into the general/residential pipe network</li>
<li>NY
state has passed emission regulations that have forced all coal
plants to close by mid 2020s, as eliminating/capturing emissions
would be too expensive to operate. Similar regulations can
exterminate all fossil fuel power and vehicles without a carbon tax.
(A carbon tax is better because it provides economy wide use-based
behaviour changes. If you use 1 gallon of fuel per month, making
your vehicle illegal doesn't reduce emissions enough relative to
personal cost)</li>
<li>Retrofitting
all existing building has high personal or social costs, and should
not be pursued. Its almost certain that the equivalent cost spent
on additional renewable generation and storage </li>
</ul>
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</div>
<div>
<b>Yang undersells economic growth from UBI, and this revenue plan is much better than a VAT</b><br />
<b><br /></b></div>
<div>
<b>The freedom dividend will greatly increase the labour pool</b>: The removal of welfare/disability/healthcare cliffs will let more people contribute more for themselves and the economy. Those who work 2 or 3 jobs may free up some hours for those others called to help themselves and businesses. Wages, sales and profits will go up significantly, all spiraling upwards feeding on each other. Investment, and associated job creation, will shoot up significantly, as collecting more consumer money is easier, and the freedom to fail while still having access to food, shelter and healthcare makes ideas and partners into the idea easier to fund with long term (instead of high salary) payoff potential. Labour force participation can mostly be a function of businesses needing help and asking for it, rather than an oppressive struggle that requires a patron kindly accepting offers of servitude.<br />
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<b>Natural tax proposal is a massive boost on top of freedom dividend:</b> The investor class will get into controlling/starting businesses to provide themselves with salaries that get funneled to spending. Cost of capital will go down due to relative attractiveness of surer debt investment, whose returns, along with dividends, are also more likely to be spent. The equalizing of labour and profit taxes means more incentive to work and more profits to tax. More tax revenue is generated, and better social payback, and therefore value, for programs initiated by public and private sectors as a higher economic multiplier is achieved. For international trade, production is rewarded in high tax rate jurisdictions, instead of a race to the bottom.<br />
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<b>Massive quality of life improvements are enabled by freedom dividend:</b> More retail, restaurant, entertainment, and cell phone coverage will be available in cities and villages as a result of more consumer empowerment. Bad neighbourhoods will stop being bad due to fewer stabbings, muggings, pest problems, homelessness, bicycle and car thefts, and general willingness to invest where all tenants are good tenants. Crime and healthcare outcomes significantly improved due to lower mental health stresses, and opportunity availability. Necessary energy transition investment, transition away from unethical business practices, and value opening automation, is much easier when survival isn't dependent upon being exploited to squeeze every last drop of civilization destroying oil in the next few months, ethical considerations can balance basic needs, and social anger over displacement is minimized when massive opportunities for labour are opened up elsewhere. Anger manipulated over imports is also eliminated when imports pay full income taxes based on sales, without deduction. The freedom dividend will provide access to debt free education and training to everyone without expensive subsidies that enable education providers to extort and overpromise foolish young people.<br />
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An even higher than the GI bill (another non-income-limited benefit as freedom dividend) fueled <a href="https://en.wikipedia.org/wiki/Economic_history_of_the_United_States#Post-World_War_II_prosperity:_1945%E2%80%931973">post ww2 prosperity that averaged over 5% gdp growth</a>. It will be much higher than this, likely 10% sustained, because the freedom dividend is a much larger scope, and all of the above reasons. Production is rewarded domestically where transportation and material costs may be lower.</div>
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The natural tax system (my name for this VAT+ proposal) is very big. There is also a specific insider share wealth tax proposal that is the only wealth tax solution that does not risk wealth flight. Wealthy insiders can still avoid taxes by borrowing from their shares instead of selling them, and pay themselves exorbitant salaries, and the incentives to own or build the next facebook are substantial regardless of wealth taxes. Equalizing tax rates on investment income and labour (and balancing it further with investment surtax) means obtaining significant social revenue from the profits of wealth.<br />
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A further investment incentive from natural taxation is refundable tax credits for businesses that lose (spend more than they earn in country) money. Instead of offsets to future possible profits, immediate cash back assists the sustainability of any startup, and can further intentionally low/no profit ventures with social purposes, without the regulatory framework restricting charities.<br />
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<b>Attacking Republicans defense of a strong economy</b><br />
Elite republicans including Trump and his defenders are subhuman thieving filth orchestrating collappse of America and the world. It is theft to destroy the climate and environment for the enrichments of the republican donor base. It is theft to <a href="https://www.naturalfinance.net/2017/12/how-to-destroy-america.html">unsustainably juice the stock market while disincentivizing business to invest in America</a>. It is theft to continue protecting extortion in healthcare, and to maximise misery for the benefit of exploiters. It is theft to destroy the global economy and peace, isolating the US towards North Korea, only to protect its ranking in the world.<br />
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These Republican thieves will sell this theft as a success. The slight of hand for the unsustainable economic strength over the last 2 years, is that it has been on the back of an additional $2T in debt. <a href="https://www.naturalfinance.net/2018/12/deficit-adjusted-gdp.html">Massive debt increases will always lead to higher short term economic growth than without them, as an accounting certainty</a>. If a recession during 2020 election is to be avoided, even higher undustainable record deficits will need to be generated. So the biggest theft of all is the unsustainable juicing of GDP while promoting businesses to cost cut and harvest/extract profits from the country.<br />
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Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com122tag:blogger.com,1999:blog-2467928492793719077.post-15573985465813265152019-02-15T18:27:00.000-08:002020-01-05T04:58:22.023-08:00Policies to enable home energy productionBuilding 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 <a href="https://www.naturalfinance.net/2018/03/the-only-solution-to-preventing.html" target="_blank">importance of carbon tax and dividend policy</a> paper<br />
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<b>Review of basic building and utility rules</b><br />
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.<br />
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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.<br />
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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.<br />
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<b>Home energy systems that use variable electric input</b><br />
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.<br />
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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.<br />
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<b>A 100% renewable economy</b><br />
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<a href="https://flowcharts.llnl.gov/content/energy/energy_archive/energy_flow_2011/LLNLUSEnergy2011.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="533" data-original-width="800" height="426" src="https://flowcharts.llnl.gov/content/energy/energy_archive/energy_flow_2011/LLNLUSEnergy2011.png" width="640" /></a></div>
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setting the 12.6 Quad delivered in US as the 100% electricity generation mark, from those years, it would take 4.22 Quad (0.5 * 6.76 / 0.8) to electrify half of transportation, and 8.44 Quad (same at half efficiency) to convert the remaining (half: trucking, boating air) transportation to hydrogen (through electrolysis). It would take 19.5 Quad ((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.<br />
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<b>Battery Electrical Vehicle charging as an intermittent demand</b><br />
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.<br />
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<b>Intermittent residential heating and cooling systems</b><br />
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).<br />
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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.<br />
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Unvented hot water technology also does not require pumping to distribute. 2 cubic 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.<br />
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<b>Key utility regulations to make intermittent energy valuable</b><br />
<ol>
<li>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.</li>
<li>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.</li>
<li>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.</li>
<li>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.</li>
<li>Transmission profit centers charge a fixed fee per kwh-mile(km) transmitted</li>
<li>Local delivery systems charge a monthly customer fee.</li>
<li>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)</li>
<li>Carbon taxes are inclusive of prices paid to producers. (or energy producers costs already include carbon taxes)</li>
</ol>
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<b>Time of Use vs. instant spot rates</b></div>
<div>
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.</div>
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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.</div>
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<div>
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.<br />
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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.<br />
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weather forecasts would include rate forecasts allowing people to manually schedule some tasks such as laundry/vacuuming.<br />
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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.</div>
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<b>Renewable energy milestone stages</b></div>
<div>
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.</div>
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It is variable demand sources, and the triple spot rates, that prevents curtailment of surplus renewable power.</div>
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<b>Electric utility as a service not a monopolist slaver</b></div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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<b>Better than PPA arrangements for producers</b></div>
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Renewable projects throughout the world are receiving multiple bids below 3c/kwh. The cheapest power projects are wind and solar. </div>
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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.<br />
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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.</div>
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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.<br />
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<b>Over time, expensive legacy generators close and go bankrupt</b><br />
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.<br />
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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.<br />
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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.<br />
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Every city, state, country that has made a 100% clean energy pledge needs simply to adopt this utility reform to get there.<br />
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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.<br />
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<b>Ontario nuclear boondogles threaten the province's sustainability</b><br />
Nuclear projects all over the world are causing bankruptcies and sustainability crises by consistently being an average 3x overbudget. Ontario's refurbishing plans are for <a href="https://www.cbc.ca/news/canada/toronto/darlington-nuclear-refurbishment-1.3395696" target="_blank">$12.8B at Darlington (4 reactors) and $13B at Bruce (6 reactors)</a> to try and squeeze another 30 years out of them. OPG needs 8.1c/kwh to recover investment. That is on top of 7.7c/kwh PPA that will be paid to privately held Bruce (which kindly assumes risk for project overruns for the $13B gift), but Darlington is subject to regular budget overruns, with provincial backstop of screwing over rate or tax payers. A real risk for $26B in additional overruns exist, but a 50/50 expectation would be $13B over budget. That would be an expected 16.2c/kwh rate from Darlington power (excluding transmission/delivery). If historical cost overruns are related to safety, then if there are magically no overruns on these projects, then safety concerns are a natural anxiety.<br />
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Ontario has existing debt sustainability issues, and this is too much risk. Its also extremely expensive energy that cannot be excused as GDP boosting. Spending the same $39B on cheaper clean energy is more GDP boosting by letting rate/tax payers spend on useful economy, and providing export potential for cheap surplus energy. But renewable energy investments can be encouraged with 0 public spending.<br />
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Ontario cancelling all PPAs, while providing near term profit opportunities for generators is the right way to keep existing assets generating in the short term, while providing substantial private sector opportunity to install new generation. An increasing carbon tax schedule ensures no one makes the mistake/miscalculation of adding coal or NG. Dumping public debt on a fair share basis to generators, transmission and delivery and restructuring rates to eliminate absurdly high monthly fee (surcharges of 5.5c/kwh for relatively high 20kwh/day users. 22c/kwh for 5kwh/day users).<br />
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In the relatively near term, market forces will move nuclear to winter only generation, and then force it to shutdown, assuming this is implemented before refurbishment grants are handed out, and the decision to refurbish is based on electricity value, and therefore not pursued. It is an assured complete disaster for Ontario to guarantee 30 years of high rates (before cost overruns or emergencies) to nuclear operators.<br />
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20c/kwh energy over next 5 years until renewable surpluses accumulate is a significant bargain. The rate is high enough to give private renewable projects up to 30 years of profit in 5 years. It's much less than the road being entrenched over the next 32 years.<br />
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Avoiding renewable surplus curtailment is done through low surplus rates, HVAC storage, battery, export, industrial heat dump arrangements, and hydrogen production. Export routes double as import routes, and Quebec energy is already an option. Ontario and northeast in general already have capacity surpluses, but other than Quebec, have few export-valuable energy due to rampant corruptarded abuses of rate and tax payers. Renewable power is not going up in price. Especially solar. Even if panels stay in the $50USD per square meter range, commercial efficiency is going up 20%/year, this year brings affordable commercialization of transparent and bifacial (power from rear) modules, and there is within a couple of years, commercialization of peroskovite layers that can boost efficiency another 40%-50%. Locking in society-collapsing energy rates for 30 years in the face of cheap, and getting cheaper, clean renewable options that are quickly and easily deployed, is something to avoid.<br />
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<div>
<b>Exporting of surplus energy</b></div>
<div>
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. <a href="https://www.wecc.biz/Reliability/2014_TEPPC_Transmission_CapCost_Report_B+V.pdf" target="_blank">Transmission lines cost between $2.50 to $0.75 per kw-mile</a>. 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.<br />
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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.<br />
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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.<br />
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<b>Hydrogen as energy export solution</b><br />
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.<br />
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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.</div>
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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.<br />
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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.<br />
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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".<br />
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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.<br />
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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.<br />
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One <a href="https://static1.squarespace.com/static/5b02e08a506fbe726e4dbbd2/t/5bbe587d1905f4e8e181491f/1539201155696/Brouwer%5C_OFCC%5C_Symposium%5C_100318.pdf" target="_blank">misguided analysis of California's 2015-2018 curtailment of renewables</a> 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.<br />
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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.<br />
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<br /></div>
<b>Politics of exports and imports</b><br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>Residential/Commercial/Farm power plants - Power pyramid</b><br />
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.<br />
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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.<br />
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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.<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-JM_NRv44FHQ/XF4MTuwqA6I/AAAAAAAAAIE/9hiCbbobSwMq24B4CKlnML0qCN9cn3NEACLcBGAs/s1600/735mar21.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="379" data-original-width="396" height="306" src="https://2.bp.blogspot.com/-JM_NRv44FHQ/XF4MTuwqA6I/AAAAAAAAAIE/9hiCbbobSwMq24B4CKlnML0qCN9cn3NEACLcBGAs/s320/735mar21.PNG" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">7:30 am (solar) March 21st view</td></tr>
</tbody></table>
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<br />
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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.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-y124hjpfUvE/XF5FM5GoEbI/AAAAAAAAAIs/CHttv8qbMFQMqosQXcxcR73uldU4UYQvgCLcBGAs/s1600/940jan7.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="512" data-original-width="312" height="320" src="https://2.bp.blogspot.com/-y124hjpfUvE/XF5FM5GoEbI/AAAAAAAAAIs/CHttv8qbMFQMqosQXcxcR73uldU4UYQvgCLcBGAs/s320/940jan7.PNG" width="195" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><div style="font-size: medium;">
9:25 (solar time) on January 7th view</div>
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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.<br />
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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.<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://cleantechnica.com/files/2015/08/fixed-tracking-compared-8-24-2013.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="https://cleantechnica.com/files/2015/08/fixed-tracking-compared-8-24-2013.png" data-original-height="388" data-original-width="800" height="308" width="640"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">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. <a href="https://cleantechnica.com/2015/08/21/load-shifting-with-electric-vehicles-is-a-great-match-to-wind-in-many-areas/" target="_blank">source</a></td></tr>
</tbody></table>
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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).<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-ue3JUyiRm3o/XGAlKv5oRQI/AAAAAAAAAJA/2T29Wneryx04dQFZl1nhe3bcHL5TcNYrACLcBGAs/s1600/1030july21.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="367" data-original-width="251" height="320" src="https://2.bp.blogspot.com/-ue3JUyiRm3o/XGAlKv5oRQI/AAAAAAAAAJA/2T29Wneryx04dQFZl1nhe3bcHL5TcNYrACLcBGAs/s320/1030july21.PNG" width="218" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">July 21 10:30am</td></tr>
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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.<br />
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<b>The 5-10-15 pricing plan can be 2-6-10 in summer</b><br />
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.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>Wind and other uses from the pyramid</b><br />
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.<br />
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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.<br />
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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%.<br />
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<b>Solving the power transmission problem with pyramid solar/wind towers</b><br />
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.<br />
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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.<br />
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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.<br />
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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 <a href="https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity_transmission_in_China" target="_blank">12GW HVDC</a>. 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.<br />
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<b>Solar friggin roadways and solar tents</b><br />
An easier structure to build than a pyramid is a tent. Straight support legs are joined in a 2d angle.<br />
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.<br />
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<b>Rural electrification</b><br />
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.<br />
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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.<br />
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<b>Cost target of pyramids vs utility scale single axis trackers</b><br />
<a href="https://www.nrel.gov/docs/fy19osti/71714.pdf" target="_blank">NREL puts the total 2018 cost of 100MW utility one axis</a> (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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>Issues with power pyramid in urban settings</b><br />
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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>Advantages of Power pyramids</b><br />
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<ul>
<li>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.</li>
<li>More solar energy production at 45th parallel (Ottawa) per area than in southern US or equator. (though southern US can produce even more by matching 60 degree angle)</li>
<li>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.</li>
<li>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.</li>
<li>Reduced snow load ratings and weathering of building roofs. Flat roof with recreation space options.</li>
<li>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.</li>
<li>Sufficient surplus potential to power any community of normal density.</li>
<li>Most current solar panels come with a guarantee of retaining 80%+ power after 25 years. 25 years is the life expectancy of a roof. There is little reason to rush replacing/removing panels just because they are 80% or 60% of their original capacity, and so on pyramids, would likely be left up for the full life of the structure. BPA utility has lattice towers where most are <a href="https://www.bpa.gov/Finance/FinancialPublicProcesses/CapitalInvestmentReview/cirdocuments/Transmission_SteelLines.pdf" target="_blank">40-70 years old, and in 2012 were assessed as having greater than 20 year life remaining</a>. Estimated lifespand for transmission towers is 100 years.</li>
</ul>
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<b>Mutual reinforcement of 3 policies advocated in this paper</b></div>
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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.</div>
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<div>
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.</div>
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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.</div>
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<div>
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. </div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com136tag:blogger.com,1999:blog-2467928492793719077.post-50516966053417674132018-12-13T13:49:00.000-08:002019-04-26T07:39:26.602-07:00Deficit adjusted GDPThis 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 <a href="http://www.naturalfinance.net/2017/12/how-to-destroy-america.html" target="_blank">intentional destruction of the country</a> for benefit to the destructors.<br />
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<b>Scenario: Increase GDP 100% with $20T increase in defense prices paid.</b><br />
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%)<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>As bad as defense contractor giveaway is, tax cuts for the rich have even less GDP impact</b><br />
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.<br />
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Furthermore, when a tax cut is a <a href="http://www.naturalfinance.net/2017/12/how-to-destroy-america.html" target="_blank">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</a>.<br />
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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.<br />
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<b>Modelling multiplier effects</b><br />
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<ul>
<li>The poor and the government spend all that they receive.</li>
<li>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.</li>
<li>Companies who channel profits into real assets or generate losses or little profits are also pass-through economic entities.</li>
<li>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.</li>
<li>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.</li>
<li>Insurance profits are similar to debt. Profits from premiums go to hoarders, while claims add fuel to the economy.</li>
<li>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.</li>
<li>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.</li>
<li>Ultra profitable companies similarly siphon off money out of the economy, on a continual process. Payments to investors are simply transfers among hoarders.</li>
</ul>
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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.<br />
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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.<br />
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<b>Deficit policy that can hope to break even</b><br />
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. <a href="http://www.naturalfinance.net/2017/02/border-adjustment-tax-and-natural.html" target="_blank"> Natural tax policy</a> and <a href="http://www.naturalfinance.net/2016/05/refundable-tax-credits-introduction-to.html" target="_blank">basic income</a> can effectively accomplish that social payback. Infrastructure has the added benefit of creating something socially useful and potentially lasting.<br />
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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.<br />
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A formula for break even deficit policy is provided at the end of this paper.<br />
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<b>Framework for deficit adjusted GDP analysis</b><br />
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:<br />
<ol>
<li><b> How long a time frame between government spending and a multiplied impact on GDP</b>: 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.</li>
<li><b>Measure deficits as the accounting report, or the increase/change in total debt over the period</b>: 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 <a href="http://www.naturalfinance.net/2017/09/ubi-as-solution-to-public-pension-crisis.html" target="_blank">pension ponzi schemes</a>. 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.</li>
</ol>
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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.<br />
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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.<br />
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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.</div>
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<b>PAR performance of deficit increases</b><br />
Par is a golf term referring to a score expectation on any hole. If you score par, you did ok.<br />
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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.<br />
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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.<br />
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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 <a href="http://www.naturalfinance.net/2017/09/ubi-as-solution-to-public-pension-crisis.html" target="_blank">liquidation of retirement trust funds and public pensions</a>).<br />
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<b>US debt growth highlights</b></div>
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The US treasury publishes daily debt to the penny accounting: <a href="https://www.treasurydirect.gov/govt/reports/pd/debttothepenny.htm">https://www.treasurydirect.gov/govt/reports/pd/debttothepenny.htm</a></div>
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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.</div>
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Interest costs to the US has risen $65B in fiscal year `18 (ends in October) over `17 to <a href="https://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm" target="_blank">$523B/year</a>. 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.<br />
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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.<br />
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March and April 2018 saw $625B total deficits. This coincides with a $1.3T spending bill with customs/ICE increases as its highlight.<br />
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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.<br />
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<b>US Deficit adjusted GDP growth</b><br />
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<div style="text-align: center;">
Methodology</div>
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<ul>
<li>date and debt: total debt retrieved for first day of month from debt to the penny site. In billions.</li>
<li>deficit: the increase in total debt over previous month. Suplus negative deficit numbers are preceded with _ .</li>
<li>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.</li>
<li>incr: increase/change in 3 month rolling deficit. This is the basis for adjusting GDP as if it would be without a deficit increase.</li>
<li>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.</li>
<li>gdpinc: The month over month increase in GDP. Interpolation results in 3 equal increments pe quarter.</li>
<li>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.</li>
<li>cumAgdp: Cumulative adjusted monthly increase. Total adjusted GDP increases relative to december 2016.</li>
<li>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. </li>
<li>2xgdp: GDP adjusted by a deficit/surplus multiplied by the 2x factor in previous column.</li>
<li>cum2xgdp: Cumulative 2x deficit adjusted GDP relative to december 2016.</li>
</ul>
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<b>Notes and conclusions:</b><br />
(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.<br />
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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).<br />
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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.<br />
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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.<br />
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<b>The 2017 GOP tax plan</b><br />
I've called that bill the <a href="http://www.naturalfinance.net/2017/12/how-to-destroy-america.html" target="_blank">destruction of America plan</a> 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.<br />
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<b>The context of universal basic income</b><br />
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.<br />
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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).<br />
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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.<br />
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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.<br />
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<b>Formula for break even deficit policy</b><br />
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.<br />
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Formula elements within context of suggested natural taxation principles and rates<br />
<ul>
<li>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.</li>
<li>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.</li>
<li>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.</li>
<li>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. </li>
<li>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.</li>
<li>Normalization for real vs nominal costs. Inflation adjustment that affect interest rates. </li>
</ul>
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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 <a href="https://home.treasury.gov/system/files/291/Table2-Reciepts-by-source.pdf" target="_blank">broad notes on US finances</a> 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.<br />
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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 <a href="https://www.bea.gov/sites/default/files/methodologies/nipa_primer.pdf" target="_blank">2012 statistics</a>, 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<br />
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In a $20T GDP economy, natural taxation raises $6.6T as base + $50B from high income surtaxes + $880B hoarding surtaxes = $7.53T. In a $22T economy, this is $8.3T. $5T more than current revenue. Enough to pay a basic income to 300M adult Americans of $16k/year, before any of the spectacular growth UBI provides. A household with 2 earners of $100k each would pay a 17% effective tax rate (including $16k refund) including payroll taxes, and so effectively 10% 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 5.66% 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 $5T in UBI funded by hoarders means $5T 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 $1.8T in tax revenue, $1.8T in productive earnings and potential consumption, and $1.2T in additional after tax hoarding profits. $3.2T of that $5T is a further increase in GDP and potential UBI and spending and additional profits to hoarders. A 37% increase 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.<br />
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<b>Actual Formulas</b><br />
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 <b>Project cost / (hoarding rate * (1 - hoarding profit taxation rate))</b>. 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 <b>proportion of project cost going to non hoarders.</b><br />
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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 <b>multiplied GDP impact =</b> (<b>after tax cost of project - hoarded portion of project) / (1 - (spending rate * (1 - tax rate on spenders)) </b>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.<br />
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The 2nd formula is <b>Multiplied Tax collection = multipied GDP impact * ((spending rate * spender tax rate) + (hoarding rate * hoarding tax rate)).</b> 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.<br />
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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.<br />
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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%.<br />
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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.<br />
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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.<br />
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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.<br />
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<b>Policy implications</b><br />
<ul>
<li>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.</li>
<li>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).</li>
<li>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.</li>
<li>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).</li>
<li>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.</li>
<li>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 href="http://www.naturalfinance.net/2018/03/the-only-solution-to-preventing.html" target="_blank">A carbon tax and dividend is a revenue neutral, and best possible, and only genuinely effective, climate policy</a>. 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.</li>
<li>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 <a href="http://www.naturalfinance.net/2016/06/life-accounts-previously-refered-to-uli.html" target="_blank">ULI </a>(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.</li>
<li>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 <a href="http://www.naturalfinance.net/2015/05/slashing-public-education-can-provide.html" target="_blank">education can be vastly improved and personalized</a>, 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.</li>
<li>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</li>
<li>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.</li>
</ul>
<b>Comparison to Keynes work</b><br />
The <a href="https://en.wikipedia.org/wiki/Fiscal_multiplier" target="_blank">Keynes multiplier formula</a> 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.<br />
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The case for ignoring the propensity to import:<br />
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<ol>
<li>In a global economy there are no imports.</li>
<li>A rich nation with high imports raises the standard of living in exporting which accomplishes:</li>
</ol>
<ul>
<li>Creates export markets for food energy and commodities (at least) and potential demand for domestic finished goods and software.</li>
<li>Gives poor people in those nations employment opportunity which prevents resentful sentiments if they were to immigrate to your heaven.</li>
<li>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.</li>
</ul>
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These points guide <a href="http://www.naturalfinance.net/2016/03/affordable-housing-and-basic-income.html" target="_blank">appropriate housing policy</a> 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.</div>
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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.</div>
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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. <a href="http://www.naturalfinance.net/2016/03/affordable-housing-and-basic-income.html" target="_blank">UBI is a massive enabler to expanding total property values</a>. 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.</div>
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The point is that construction is a massive economic opportunity for expanding population, and transitioning to a renewable energy economy.</div>
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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.</div>
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<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com7tag:blogger.com,1999:blog-2467928492793719077.post-74387482770820849122018-03-27T19:39:00.002-07:002020-11-10T15:37:42.113-08:00The ONLY solution to preventing catastrophic climate change<div class="separator" style="clear: both; text-align: left;">
High carbon taxes is the only solution to climate change because the only solution requires electrification of transportation and heating energy through renewables, and carbon taxes are required to create market driven ramp up of innovation and production in time to stave off the worst effects of global warming.</div>
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<b>The carbon budget</b></div>
<div class="separator" style="clear: both; text-align: left;">The level of global warming that will occur is dependent upon <a href="https://en.wikipedia.org/wiki/Emissions_budget">cummulative CO2 (and other GHG) emissions</a>. An infographic outlining emission pathways to exhaust the carbon budget.</div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://upload.wikimedia.org/wikipedia/commons/4/47/Carbon_budget_eng.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="613" data-original-width="800" height="491" src="https://upload.wikimedia.org/wikipedia/commons/4/47/Carbon_budget_eng.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">wikipedia: By Ileo - Emission paths for reaching the Paris Agreement</td></tr></tbody></table><br /><div class="separator" style="clear: both; text-align: center;"><br /></div>
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More recent estimates from 2014, with a live counter, estimate a <a href="https://www.theguardian.com/environment/datablog/2017/jan/19/carbon-countdown-clock-how-much-of-the-worlds-carbon-budget-have-we-spent" target="_blank">remaining budget of 750gt</a>, and 18 years until depeletion at current emmission rates. The difference is that the former uses a 450ppm threshold while the latter uses a 530ppm atmospherice co2 equivalent saturation.</div>
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Some important overall points are: There are 4000gt of carbon locked in fossil fuel reserves (so much of these must be abandoned). The smallest possible additional co2 emmissions is the best emmissions amount.</div>
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A good lecture on the challenges and pessismism surrounding reaching 2C global warming targets.</div>
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<iframe allowfullscreen="" class="YOUTUBE-iframe-video" data-thumbnail-src="https://i.ytimg.com/vi/ZF1zNpzf8RM/0.jpg" frameborder="0" height="266" src="https://www.youtube.com/embed/ZF1zNpzf8RM?feature=player_embedded" width="320"></iframe></div>
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Points made:</div>
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<ul>
<li>Climate scientists are very polite to political leaders, restrain alarmism, and permit reciprocal politeness from politicians, while maintaining business as usual policies.</li>
<li>There is a 4C real target, with a 2C promise "that cannot be explicitly acknowledged as impossible".</li>
<li>He, naively, criticizes climate report language that claims economic prosperity while cutting emissions, and favours planned economic recession... or more misguidedly, wait until low carbon energy is in place to remove recessionary forces.</li>
<li>Climate reporters/IPCC all offer insufficient and miniscule emmission reduction rates, under pressure by politicians for economic growth. (economic growth is possible with 0 fossil fuels, but unknown to lecturer) </li>
<li>Climate reporters/IPCC/lecturer make poor assumptions about non-OECD emmissions eventually exceeding OECD emmissions. (it will be shown that it is easiest to limit non-OECD emmissions). Easiest to prevent emmissions from energy plants that have not been built yet.</li>
<li>All technology solutions must be given adequate ramp up time (often in error by IPCC), and some problems/projects require unprecedented scale.</li>
<li>target emmission rates by date are not a real goal. Cummulative emmissions over next decades/centuries is what will determine global temperatures.</li>
<li>The top (20) percent of energy users are the ones that need make the largest reductions, but some misplaced expectation of shaming or internalizing his lecture is assumed to be the catalyst for behaviour change.</li>
<li>70% decarbonization needed by 2025</li>
</ul>
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<b>The tech adoption path to minimizing emmissions (with accelerated economic growth)</b></div>
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<ol>
<li>Electrify transportation and heating</li>
<li>Renewable electricity generation, including decentralized rooftop solar.</li>
<li>Use amonia, <a href="https://www.nature.com/articles/srep01145" target="_blank">produced by electrolysis</a>, for heating and ICE transportation fuel.</li>
<li>energy storage such as liquid air, hydrogen/amonia production, including decentralized storage solutions. Batteries.</li>
<li>Intercontinental UHVDC transmission lines allow 1100kv transmission halfway accross the world (20000km) of 2c/kwh solar energy a<a href="https://www.siemens.com/press/pool/de/events/2012/energy/2012-07-wismar/factsheet-hvdc-e.pdf" target="_blank">t under 50% transmission losses</a>, and so 3c/kwh delivered cost. 14000km length (about halfway at 42* lattitude) has only 33% transmission losses.</li>
<li>use building materials that capture co2, such as <a href="https://qz.com/1123875/the-material-that-built-the-modern-world-is-also-destroying-it-heres-a-fix/" target="_blank">alternative cement</a>.</li>
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The order of fossil fuel elimination should be coal, gasoline, natural gas heating, aviation fuel. This recommended adoption path has been more recently replaced with <a href="https://www.naturalfinance.net/2019/09/renewable-hydrogen-economy-economics.html">hydrogen </a>instead of ammonia and HVDC exports.</div>
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<b>co2 emmission <a href="https://carbonfund.org/how-we-calculate/" target="_blank">metrics by use</a></b></div>
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A car with efficiency of 25mpg, emits 0.4kg co2/mile. 40 tonnes/100k mile lifetime.</div>
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heating a southern Canadian home for the season uses 150k-250k btu per square foot per season depending on efficiency. 600 square feet/person = 90M-150M btu. With natural gas, 4800-8000kg of co2/year.</div>
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hot water heating for 40 gallons/day/person uses 15M btu/year. 800kg of co2 with ng.</div>
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293kw/month in electricity consumption is 636kg of co2 when generated from natural gas. 1200kg from coal. (all per year)</div>
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air travel is 0.2kg/passenger/mile of co2</div>
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shipping 300kg of goods 100 miles by truck (4.5kg co2). 100kg 1000 miles by truck (14.6kg), 200kg 1000 miles by train (4.8kg), 100kg 5000 miles by ship (30.1kg), and 10kg 5000 miles by plane (66kg). I suggest this makes a representative total per person goods transporation use. 110kg of co2. Can triple this amount to account for transportation of input goods.</div>
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where an adult uses on average half a car (5000 miles), and 100 miles/year air travel, can round up to 12 tonnes/year.</div>
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Though the above breakdowns are needed to see the impact of carbon taxes on lifestyle components, a better estimate that accounts for industry is greenhous gas (equivalent to co2) emmissions (GHG) consumed per capita. There is no direct consumption data, but <a href="http://edgar.jrc.ec.europa.eu/overview.php?v=CO2andGHG1970-2016&sort=des8" target="_blank">there is production data</a> where a guesstimate of net export related GHGs can be subtracted.</div>
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<ul>
<li>Canada: 18.62T co2. 20.5T ghg. Export adjustment 5T ghg. = 15.5T ghg</li>
<li>USA; 15.56T co2. 19.5T ghg = 19.5T ghg</li>
<li>Germany: 9.47T co2. 12T ghg</li>
<li>China: 7.45T co2. 8.8T ghg. Export adjustment 0.8T ghg = 8T ghg</li>
<li>World: 4.8T co2. 6.5T ghg.</li>
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These estimates are fairly comprehensive including agriculture, cement and other mineral refining activities. Yet some emmissions are difficult to accountably trace to a single user: Flared and unflared methane from oil wells can be skillfully or purposefully minimized. Methane emmissions from cattle can be mitigated with feed choices (seeweed), or captured in balloon bags.</div>
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<b>The importance of a carbon dividend</b></div>
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Distributing all of the proceeds of a carbon tax to the residents of a nation is the perfect adaptation to a low carbon economy that costs society, and its membership, nothing to do so. Every other use of the proceeds is corruption using the climate crisis as an opportunity for preferential cronyism, and wasteful and wrongful advocacy for the "more deserving".</div>
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It costs society nothing to have a carbon dividend because if society does nothing, then the full cost of the carbon taxes is paid by the carbon dividends. There are no additional policies needed. Both individuals and businesses can profit by reducing their carbon consumption, such as using their carbon dividend to invest in carbon alternatives such as solar power, electric or amonia powered vehicles, and better windows, appliances and electronics. </div>
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Carbon taxes and dividends are slightly progressive. The rich consume and fly more and heat larger homes and have vehicles. A carbon dividend can form the basis of basic income where even stingy versions of UBI with stingy funding for them, are supplemented to a full UBI with development fund that permits people to actualize their potential.<br />
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The carbon taxes collected to fund carbon dividends must come entirely from consumers. Producers in a jurisdiction should not pay carbon taxes. Instead, their products accrue carbon content, and the tax associated to their production gets paid in the jurisdiction that holds the consumer, and that helps the consumer afford the product with dividends paid to them.</div>
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<b>The importance of scalability and pacing</b></div>
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A large shocking increase in carbon taxes isn't useful in that projects including increasing solar panel production by Terrawatts per year, energy storage, and UHVDC lines have long ramp up times.</div>
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Yet a certain schedule/path of increasing carbon taxes is enough to provide private capital markets with the certain profit opportunities from the capacity of projects to meet the demand and economic growth they are certain to create, and that consumers will be eager/desperate to pay for. Its critical that the carbon tax schedule, and the inclusion categories, be permanent. Only permanence provides the investment certainty to provide carbon alternatives.</div>
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Pacing is also important for overall UBI implementation allowing employees of conditional welfare/support agencies a few years before transition/severance, and allowing the orderly bankruptcy or adaptation of energy dead enders.</div>
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Another important factor/benefit of an increasing schedule of carbon tax rates is that since they reduce carbon use, doubling the previous year's carbon tax rate generates less than double the revenue due to the desired emmission cuts. Scheduled increases create a stably increasing carbon dividend amount.</div>
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<b>Proposed schedule of carbon tax rates</b></div>
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Prices per kg of ghg equivalent (to co2) by year for a 10 year schedule: 0.10 0.20 0.40 0.60 0.80 1.00 1.10 $1.20, with $0.10 per year subsequent increases.</div>
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This should achieve a 40% reduction in ghg/capita emissions by year 6, and an 80% reduction by year 10, with continued reductions to the minimum possible (could be 100%) within 5 years thereafter. The $100/tonne increase every year after year 8 will help provide a constant UBI amount as carbon use is lowered.</div>
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There is probably a 3-4 year delay between this document publish date, and the implementation start, with hopefully only a 2 year delay between apparent innevitability and implementation.</div>
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The year 8 rate is $1/kg. This translates into (using co2 only emissions in USD) a $10.60/gallon gasoline surtax. $4000/10k mile vehicle per year. $636 or $1200 higher annual electric bill if electricity generated from natural gas or coal. 5000 air miles costs an extra $1000. Despite my calculation that heating per person generates up to twice the co2 of an automobile, it appears high. The average <a href="http://www.statcan.gc.ca/pub/11-526-s/2013002/t006-eng.htm" target="_blank">2011 energy use per Canadian household</a> (including electricity and heat) is 99.5M btu. If all of it came from natural gas, annual household co2 consumption would amount to 5000kg. At an average 2 person sized household, $2500/person co2 taxes. This is a carbon tax of $0.18USD/kwh (double for coal) and $5/Therm (100CF) for heating.</div>
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An estimate of the <a href="https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions/canadian-economic-sector.html" target="_blank">agridustrial side of ghg emissions for Canada</a> is 2000kg/capita each for agriculture, heavy industry, and shipping, and 1000kg for commercial electricity. The <a href="https://www.extension.iastate.edu/agdm/articles/others/TakApr08.html" target="_blank">agriculture breakdown</a> of difficultly-accountable emissions are 61% soil management (related to nitrogen fertilizers, primarily for grains), 27% cattle-digestion (eat a lot of grain), and 4% rice production. 8 lbs of rice creates 4 pounds of ghg. 8lbs of wheat creates 1lb of ghg. 6lbs of grain/feed creates 1lb of beef, and with digestion effects, can be 1lb ghg per lb of beef (though ghg-taxes on beef would only apply to digestion effects as feed taxes would be paid by producer). Pork is 1:2. Chicken 1:4.</div>
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<div>
A missing component is the oil and gas sector's exploitation/processing activities. In Canada, this exceeds (by 10%) the ghg emissions from the transportation sector! Worldwide it is 70% of transportation sector emissions. Using the later figure and putting it all into extra taxes on transportation fuels, would bring the carbon tax on gasoline to $17, and annual operating taxes/10000 miles at $6800.</div>
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Totals in terms of high, average and low (75%-50%-25% quartile) spending levels (with 10% "gross up" of co2 to ghg conversion), for Canada, $24000-$15500-$8000 all receiving $15500 in carbon dividends. Both expense and income figures are in USD 40% higher than they will be in t+6 years if the expected 40% reduction in ghg emmissions are in place by the time $1/kg carbon tax and dividend rate is in place. The actual carbon dividend would be expected to be $9500.</div>
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<b>side note: complexity of taxing food</b></div>
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Livestock is a battery to the food system, useful for food security in event of droughts. In an ammonia economy (no ghgs when combusted) it would be worthwhile for farmers to make or use black market fertilizer to avoid paying carbon taxes, and so for agriculture and oil production, it would make sense to set carbon taxes from industry/firm regulators enforcing/auditing "best practices". Its also possible to consider setting industry wide tax rates that improve (lower) as the industry as a whole improves in its emmissions, and worth considering government subsidy for agriculture setting carbon taxes lower than the agriculture sector's emmissions.</div>
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An important issue for supply chains is that carbon taxes on intermediate inputs should be <b>traded as a liability</b> to the purchaser. This avoids adding markups to the carbon tax component of input costs. For instance, the rancher buying 8 lbs of wheat from a farmer would not pay the 1lb carbon cost. He would accept a 1lb liability. Additional digestive-based carbon liabilities would be passed along to the supply chain (along with original grain carbon liability) until it ends up with the supermarket who would settle it after being paid in full by the customer.</div>
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<b>Why this will all work to reduce emmissions</b></div>
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If it costs $68000 (or $136000 after $2/kg rate) in extra lifetime operating costs for a honda accord, then I for sure want to buy an electric car instead. If I am stuck with a honda accord, I for sure want to convert it to run on ammonia. I can afford the extra $68000 because I get more than that from the dividend, but I'd prefer it in my pocket, or to have a "free" electric car, and still dividend left over.</div>
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If my electricity rates go up $0.18 ($0.30 total)/kwh (for natural gas. double for coal), a solar system that costs $2/watt to install is equivalent to $0.06/kwh electric rate. Battery storage solutions are currently 0.10/kwh. Still far less than paying fossil fuel utilities. In turn, the utilities will invest massively in renewables generation capacity in order to not be priced out of my patronage, and to convince me to delay such plans. The utilities will want HVDC lines to desserts around the world that can provide solar energy at $0.02 or $0.03/kwh.</div>
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Investors will want to throw money at renewable energy capacity expansion, utlity projects, and research like they are marijuana stocks. Obvious, certain, massive demand that will pay back those projects. Because the civilization destroying alternative energy sources are priced according to their destructive impact.</div>
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At first, its likely that the cost of renewable energy goes up a bit. More demand than supply can meet, though this also means a greater rush to supply it. We need to ramp up to 1000TW (nameplate - 500TW or so on a 24hr/continuous scale) of new renewable power generation capacity per year. Yet that renewables production capacity will allow expanded energy applications and even more rapidly declining prices once the replacement of existing energy production is met. For instance, where there is overcapacity in solar production for a day, industrial uses/processes are inherently free of energy costs.</div>
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500TW in new renewables capacity every year is a very ambitious goal. If 250TW comes from solar, that is a 1000x increase from today (double every year for 10 years). No matter how much we fall short of the goal, THE PLAN CANNOT FAIL. If we continue to need fossil fuels for longer than ideal, then we use them, and it costs us nothing, as the dividends pay for their use.</div>
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We'll still use some of the money to get better windows, beg to pay more taxes to improve transit (or justify entirely high rider fee funding) or get bikes. Even if the renewable production schedule cannot be met, emissions will come down, and global temperature stabilized.</div>
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The outcome from the plan is completely market driven. Any additional politician driven projects to enhance climate action does not delay the private sector's ability/actions to solve it.</div>
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<b>Why no other option can work</b></div>
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Other than do nothing as usual, there are 2 politically opportunistic alternatives to the carbon dividend.</div>
<div>
<ol>
<li>Cap and Trade: Hand out carbon credits to incumbent businesses and let them pollute more and buy from those who pollute less than their allotment. In addition to the problems of lobbying for higher caps, and lobbying for their share of credits, it only addresses the commercial sector. It does nothing to influence consumer transportation, electric, heating spending. Unlike carbon taxes, there is no way to affect jurisdictions that don't want to participate in the carbon credit market. </li>
<li>Carbon tax to fund discretionary spending: Even when it includes a portion of the funds to help the poor deal with carbon taxes, it is an action that rewards the poor only if they stay poor. An anti-UBI position is entirely <a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html" target="_blank">a pro-slavery position</a>. One that structures a harsh world to facilitate military, police, prison opportunities for the right, but also the politics of hate, fear, and divisiveness that place undue importance on politicians <a href="http://www.naturalfinance.net/2016/05/over-90-of-swiss-should-vote-yes-on.html" target="_blank">power to increase harshness and reduce freedom</a>. A variation of this plan is "revenue neutral carbon tax": An estimate of carbon tax revenue is used to reduce other revenue. The problem with this approach is that there are necessarily inaccuracies in helping those affected compared to the mathematically ideal of giving the tax revenue as a consumer dividend, and there is a credibility problem that the promise will be kept long term. Any discretionary assessment is a vulnerability ready to be politically exploited.</li>
</ol>
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Its also important that carbon taxes be focused entirely on carbon consumption (not production). Doing so, ensures interjursidictional applicability, and unilateral setting of tax rates. The concept of carbon tax liabilities transferred in supply chain (introduced in "side note" above) does allow the tracking of taxing for local production but its taxed in the customer's jurisdiction with tax revenue going to that jurisdiction.<br />
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</div>
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While its more important that there is a carbon tax than it is that it is properly shared through dividend, distorting the use of the carbon tax delays implementation, and the most common distortion is to provide businesses with incentives or project funding. Taxing only at the consumption level creates no business costs. The liability transfer model also ensures no extra costs from intermediate buyers so long as the ultimate customer is subject to carbon taxes. This makes every member of the supply chain want to have their customers subject to carbon taxes so that they can better afford to buy their products. So it is the carbon dividend that ensures the customer wealth to support high economic growth and business success, and ensures that carbon taxes are implemented in every jurisdiction, at the request of its suppliers.</div>
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The other alternative <a href="https://www.theatlantic.com/science/archive/2018/03/carbon-tax-fails-in-washington-blue-states-climate-change/554693/" target="_blank">tried and failed</a> is a small carbon tax used to fund clean energy and corporate tax breaks. A small carbon tax and dividend gets attacked from the left (poverty groups) for the dividend being too small, but mainly for not going to projects they get lobbied for. Small carbon taxes can still lead to small progress, but they are inadequate for the urgency we face, and the real political problem is that they are insufficient to produce life and lifestyle changing dividend amount, and so fail to rally the proper enthusiasm for carbon taxes.</div>
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<br />
<b>Large vs medium carbon tax and dividend</b><br />
Scott Santens writes a good article on the <a href="https://medium.com/basic-income/this-idea-can-literally-change-our-world-107cbc94057a" target="_blank">basic economics of a carbon tax with focus on UBI</a>. He is too polite towards revenue neutral policy proposals, and proposes a modest carbon tax that grows by $0.015/kg/year, that if carbon use remained unchanged, would grant $300/month in dividends in 2040. Scott is influenced by my previous thinking of using a carbon tax just large enough to supplement program cuts that can fund a high UBI level with minimal disruptions to the tax code.<br />
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A high carbon tax and dividend costs the same nothing to society ('s public budget) as a small one. Though it is critical that the carbon tax be entirely consumer driven, and that the carbon liabilities concept (expanded upon later) is applied so that businesses do not mark up carbon tax costs, and face no competitive disadvantage from imports or to export markets. Advantages of large over small carbon tax<br />
<ol>
<li>Quicker behaviour change: No business uncertainty over efficiency and adaptation/conversion measures. No uncertainty for investment in massive capacity for emissionless alternatives. Better incentives to avoid useless consumption of some goods. High demand for solar panels may firm up prices, which removes the incentive to "wait till next year" when prices might drop even further.</li>
<li>Some extermination of fossil fuel use is only possible with high carbon tax: Converting planes to run on ammonia requires a large tax. The alternative of a $100/flight tax is less impactful than a $300/flight tax, when ammonia conversion might increase flight costs $80-$200. Renting spare space in a house to improve density may only be incentivized by high carbon taxes, but also the reliability of a renter that receives high carbon dividends.</li>
<li>A higher carbon dividend is more progressive. High spenders are taxed more than low spenders, though its only high spenders that have the freedom to choose low spending.</li>
<li>A high carbon dividend gives everyone the power to make lifestyle choices: If everyone is paid $6400 to not drive a gasoline powered car, everyone can use the money to make car payments on an electric car if they wish. This is not possible with a small carbon dividend. The rich can always afford any efficiency/alternative investment that provides a timely payback. A high carbon dividend gives everyone that power.</li>
<li>Quicker behaviour change is needed to mitigate feedback risks and variance in climate models. Climate models approved by governments err on the conservative rather than alarmist side, and don't account for feedback effects we know are and will continue to happen, but cannot confidently quantify in unified models. Acting as soon and as fast as possible gives us a buffer for further adaptive and mitigation measures over the next decades, and the buffer is absolutely essential if we hold any attachment to a future just 20 or 30 years away.</li>
<li>A high carbon dividend (UBI) makes us all more adaptable to change in dominant industries and more easily capable of moving where the work is.</li>
<li>A high carbon tax and dividend ends distracting discussion on revenue neutral alternatives. Corruption from the ideal fair distribution of carbon tax revenue is more visible when the amounts involved are larger.</li>
<li>A high carbon tax justifies the expense of auditing processes in agriculture and fossil fuel extraction and burning activities that, if carried out, significantly reduce emissions, and so can have their products' "imputed" carbon taxes reduced, and gain competitive advantage.</li>
<li>A high carbon tax and dividend allows fully-private sector adjustments to the economy. This frees the public sector from finding use/projects to fund with the carbon tax, and also prevents them from reducing the carbon tax if they run out of project ideas in the future. Project funding can be pursued independently of carbon taxes as they are now.</li>
</ol>
<b>The massive economic boost from shift to renewable economy</b></div>
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Replacing vehicles, windows, applicances, and electronics creates a massive amount of jobs.</div>
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Ramping up to 500TW renewables production capacity, and installing that much each year is practically a moon shot project. An actual moonshot project collection is the creation of 30k-60k TWH (terrawatt hours) of energy storage and high voltage (long distance) transmission capacity</div>
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Among the jobs this creates are mining and associated services jobs in far greater quantity (2x to 10x) than the fossil fuel sector jobs that would be destroyed, which are similar enough to fossil fuel sector jobs that anyone with that experience that wants a job will have a better career path than they have in the dead-ender energy sector. Though jobs in plenty of other fields will be created too.</div>
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<b>Protect my empire of dirt</b></div>
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Hate and fear is the tool oligarchs control the electoral process in their favour. Fear of losing your empire of shit job, makes you prone to side with the oligarchs and hate whatever they tell you your job fear should be based on. Covered up in your shithole makes you blind to the opportunities of the sun and wind.</div>
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The importance of this section is to bring up the general resistance to change, and the <a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank">specific blindness to opportunity experienced by scared retards</a>. High carbon dividends, especially if supplemented with additional basic income, is a tool that easily overcomes fear of change. High carbon taxes make the new opportunities highly/obviously visible. UBI makes travelling or waiting for weeks or months hoping for a copper mining job, or installing solar capacity far less stressful in the event of losing a coal mining job than the <a href="https://qz.com/1167671/the-100-year-capitalist-experiment-that-keeps-appalachia-poor-sick-and-stuck-on-coal/" target="_blank">system that has treated coal mining community for last 100 years</a>. Staying in Appalachia to be a goat farmer is viable under UBI too.</div>
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<b>Nationalist economic protectionsim compatible with comparative advantage</b></div>
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Comparative advantage, letting production occur where it is cheapest, creates a net advantage to consumers and the supply chain (intermediate buyers) that use those products. Exploiting other people's slavery and oppression is better than a race to the bottom that reduces consumerism and overall employment. If slaves or robots make your tube socks and underwear, you are freed from the burden of making those for foreigners.</div>
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High carbon taxes, creates very high costs for rapid shipping methods that use fossil fuels. This encourages production and sourcing close to the consumption centers, slow shipping any raw materials or sourcing them closer to where final goods are made and consumed. A high carbon tax advantages workers in high consumption societies.</div>
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For those who are threatened by slaves competing for their jobs, a carbon dividend applied throughout the world helps both the fearful-dignified directly, and their foreign competitor slaves, to have the dignity and labour market bargaining power to remove the near-slavery conditions in their regional labour markets, and so reduce the competitive spread in global labour markets. In political speak, "the deserving hard working class" obtain easier access to "paid dignified work" with UBI/carbon dividends because the labour market power balance is equalized and fair. <a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank">UBI/carbon dividends is a better solution than hatred</a> for the politically manipulated.</div>
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<b>The main enemy to carbon taxes</b></div>
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A high carbon tax is the <b>explicit extermination of the fossil fuel industry.</b> This extermination, on a slower scale, is implied in the Paris agreement (just with a 32 year+ schedule), and both plans have in common at least significant enough decline in fossil fuel use that share and debt prices of the sector will decline precipitously, as both volume and price of fossil energy would decline with lower demand. Private capital dependent companies will die off quicker than public sector ones. Unless the Paris signatories are insincere, and the market seems certain that they are insincere, there is no other means to reduce fossil fuel use than some carbon taxes. Simply expanding renewable electric capacity doesn't significantly increase electric vehicle and mass transportation adoption, when the price of gasoline drops to $1/gallon due to drop in demand, that in turns makes hummers and speedboats more attractive purchases. Any successful follow through on Paris emissions targets has to involve carbon taxes.</div>
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In terms of nations, oil/natural gas producers are enemies of humanist sustainability. Supporting dead-ender energy is a failed national strategy. Renewable energy is cheaper even without carbon taxes. Though its marginal without storage or transmission capability. Just as the <a href="http://www.naturalfinance.net/2015/10/whale-oil-history-as-incentive-to.html" target="_blank">whale oil industry accelerated its whale extermination plan as competition for its products grew</a>, its to be expected that politicians will be controlled to avoid the extermination of energy sectors. The United States and Saudi Arabia are currently in such a controlled political state, and require the most persuasion to participate, but in order to be successful, there simply needs to be a sizeable nexus of carbon tax/dividend adopting nations.</div>
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The next sections will go into greater detail why the economic forces for adopting high carbon taxes and dividends outweigh the forces of corruption, but first another important corruption force.</div>
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<b>The relevance of the war on terror and militarist evil</b></div>
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Note that all dead-ender (and new) energy companies are against any price reduction of energy. </div>
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Definitive proof that the 9/11 target buildings were not selected by agents seeking to cause maximum damage to the US are that the creative energy of at least 20 people during several months of preparation would have necessarily considered nuclear power plants as targets, and unanimously understood them as more devastating to the US compared to providing Larry Silverstein with a total insurance writeoff to his bankrupting asbestos problem and the direct hit on the pentagon's audit department. One claimed criticism of the pentagon audit department attack is that it requires very advanced piloting skills to commit the attack with a plane. Nuclear power stations would have been easier piloting targets. The endless budgetary windfalls created through 9-11, in concert with Saudi Arabia's aims of destabilizing its modernist oil competitors with religious fanaticism incompatible with productive oil exploitation that would compete with Saudi and US oil production, make the 9/11 attacks a "victimless crime" for its benefactors. </div>
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One main effect of the war on terror is that it makes nuclear energy part of the dead-ender energy sector. All recent attempts at building a US nuclear reactor have caused the operator to go bankrupt mainly due to the difficulty in implementing design regulations that call for resiliency to small plane impacts. Regulations that are perfectly reasonable if a war on terror is an infinite reality. Even without war resilient designs, nuclear power is uneconomical compared to renewables, though it has potential for scalable baseload power.</div>
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<div>
Another important project dependent on a world too prosperous and busy to resort to war is UHVDC intercontinental transmission lines already mentioned in this article. The desserts of North Africa and the middle east have cheap and arguably useless land available for solar production, and with transmission lines can power east asia in their evenings and the Americas (with a connection to Brazil) in their mornings... and receive return energy at night to make Africa a prosperous energy intensive production center.</div>
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The main catalysts to end the war on terror must be the Europeans and Asians. Rather than submit to the US for a world with expensive energy, a carbon tax and dividend shifts to lower "real" cost energy, at no net cost, while shifting wealth/income from those that waste energy to those that conserve it and shift to cheaper renewable sources.</div>
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One of the certain effects of climate change is more fighting in north Africa and the middle east. The certainty is certain, because for those well positioned to sell weapons to the fighters, weapons and money will flow to anyone willing to rebel, and extreme droughts will leave little alternate employment opportunities. Exactly the circumstances that fueled the Syrian conflict. (Though this fighting is only financeable if oil continues to have value)</div>
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It doesn't matter if the US extreme nazi regime was installed by Russians. Most Democrat politicians, even if they reject the explicit and extreme domineerance over their European colonies, still fully support the militarist weapons opportunities that are being manufactured due to climate inaction. Rather than appease nazis inconsiderate of trade relationships with Europe, Europe should make closer ties with Russia and China, and investigate terror attacks as though the US and Saudi Arabia are a monolithic block, and presumably sponsoring them.</div>
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<div>
Europe, Russia, China, Africa are major beneficiaries of a peaceful union that allows a transcontinental electric grid, and perhaps nuclear power development, and so an internal alliance preferable to maintaining a splintered close alliance with nazis intent on maximizing global destruction opportunities.<br />
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An important reason to take an exterminating/disruptive stance against dead-ender energy is that they will block any competition, and any progress towards cheaper energy of any kind regardless of pollution or climate impacts. Cheaper/better energy is an important humanist and tribal competitive advantage.</div>
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<div>
<b>The utility sector</b></div>
<div>
While the utility sector is typically heavily invested in fossil fuel power generation, their main interests are to maintain centralized power distribution. They are not at all averse to adding new cheaper renewable generation. They are heavily threatened by decentralilzed residential and commercial solar generation.</div>
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Grandiose engineering projects such as utility scale renewables, wind in general (only effective at utility scale), storage and transmission can keep utilities centralized power role over energy consumption, and so the utlity sector does not have to side with humanity's enemies, if policy supports their opportunity for centralizing power delivery, or at least maintaining relevance of centralized delivery options.</div>
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<b>A carbon tax expands renewable energy capacity</b><br />
Traditional economic thinking puts a cap on solar capacity to 20% of our electicity demand, and wind at 40%. This is because during peak generation, more is produced than is needed to meet demand, and so generators must pay users or other utilities to accept the extra power. Fossil fuels also have an edge in producing high heat (though solar heat is viable), even if they are more expensive for producing electricity. Another major issue with any power generation is producing power close to where it is consumed.<br />
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A high carbon tax's main effect in disrupting renewable power generation ceilings is in opening up storage and long distance transmission as also cheaper than dead-ender energy. Short distance transmission is made to places likely equally sunny or windy. At current prices, wind and solar costs 3c/kwh during generation, and an extra 10c/kwh from storage. Selling needed/generated solar at 5-6c/kwh during day, and dumping excess for 3c/kwh into storage provides a model that offers 13c/kwh for night/emergency power, and will shift consumer use during day. With a high carbon tax, storage still offer better energy prices even at night and even for heat generation.<br />
<br />
Yet building capacity for use during the cloudiest winter days will eventually fill any <u>electric</u> storage size. Wind is a little different. The reason for the traditional 40% capacity factor is that it bubbles up to over 100% of demand on windy days. Any sized storage fills up even more quickly with higher wind capacity.<br />
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Intercontinental transmission is mostly useful for solar energy, and allows 500%+ of local daytime demand capacity. Balancing energy at noon to everywhere else that is not noon. The northern transoceanic connections also happen to be<a href="https://globalwindatlas.info/" target="_blank"> areas capable of hosting 100s of TW of wind generation</a>, and include sites that already need ultra high voltage transmission to reach populated areas.<br />
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The most important "storage" solution is industrial processes. Hydrogen and ammonia make good heating and transportation fuel that can use legacy infrastructure to transport from remote production areas to populated areas. Variable (based on power surplus) industrial production can take advantage of abundant surplus energy. Industrial processes that can better use mechanical energy (compressing air used as stage in air liquification) instead of electric could be powered by wind. Industrial processes that take advantage of the cold (where ample wind capacity is available) such as liquid air production or IT farms can be setup north next to wind generators. Industrial processes that benefit from heat can be next to solar furnaces or other solar energy. Liquid air can be shipped south to warm areas for better electric output than the input to create it.<br />
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The ultimate storage sink though is hydrogen/amonia. Unlimited renewables makes unlimited fuel, driving down the cost of both, and permitting a high-energy-use rich global economy with 0 fossil fuel use.<br />
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1kg of hydrogen electrolyzed from water in 2014 industrial processes (optimized for volume throughput) used 50kwh of electricity. Equivalent to the btu content of 134 CF (4 cubic meteres) of natural gas. This NG can cost as little as $1/delivered today (though many places are close to $2), and $6 in extra carbon taxes are proposed. The breakeven electric cost from 2c-4c/kwh (or after carbon tax: 14c-26c/kwh), and at an expected surplus electricity price of 3c/kwh or less from renewables, causes no material change in heating prices in populated areas.<br />
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<b>IPCC conservatism, and potential climate change effects over the next 10 years</b></div>
<div>
The IPCC, whose recommendations guide the political process that led to the Paris and other climate accords, has, as far as I understand, not changed their projection for artic sea ice extent since 2007. They <a href="http://www.ipcc.ch/ipccreports/tar/wg2/index.php?idp=605" target="_blank">project(ed) 2100 artic sea ice to be roughly that which was observed in 2016</a>. There have been extreme warm events in early 2018, and sea ice continues to trend below previous records, and may reach <a href="https://en.wikipedia.org/wiki/Arctic_sea_ice_decline#Ice-free_summer" target="_blank">nearly ice free conditions</a> this year or likely by 2020, or very likely by 2025. The official politically connected bodies still only warn of potential danger by 2040 or 2050. <a href="http://nsidc.org/arcticseaicenews/charctic-interactive-sea-ice-graph/" target="_blank">The antartic sea ice is also at record lows</a>.</div>
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For the past 50 years, where records are available, the summer temperature at the artic circle has always been constant +1C. Ice is a global surface temperature regulator. It prevents the artic ocean from warming the air, prevents the ocean from directly absorbing heat through sunlight, bounces the sunlight out of the atmosphere, cools the air at the surface, and even has an overall cooling effect when it melts, such that no matter how much heat energy is in the atmosphere, the surface temperature stays constant. It will be difficult for sea ice to reform in the winter with additional heat content in the artic ocean and heavy waves, and the continued increase in global temperatures that caused ice to melt away in the first place.</div>
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It is a very conservative estimate to say that a blue water event will rapidly (within 1-5 years) bring the world above the 2C threshold (an extra 1C) established as reasonably adaptable. There are feedbacks from this such as a thawing permafrost releasing ghgs, already happening near +1C. The "government approved" climate panels must address the artic sea ice reality, and the implications from it.</div>
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<div>
The justification of the high carbon dividend plan is that whether or not we have locked in global temperature increases of 2C or 10C, action to minimize any increase is preferable to just giving up. The economic activity generated by especially mitigating future emissions (though cheaper energy options), but also adapting to survival (indoor agriculture, and indoor living) is also substantial new industry.</div>
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<b>The banking industry</b></div>
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While the financial industry has a heavy reliance on the energy sector, banks have a deeper reliance on real estate and agriculture, and agricultural real estate. The banking industry can dump their exposure to fossil fuels, and they will eventually. Its only a matter of greed and timing the top. <a href="https://oilprice.com/Energy/Energy-General/Tech-Miracle-In-US-Shale-Is-A-Media-Myth.html" target="_blank">Shale oil value has been reported to be a misrepresented ponzi scheme (oil well depeletion rates)</a>, and the Saudi Aramco IPO (passing in coming weeks to years) will remove the main reason to keep oil and related securities prices high. The big, and last, investment-banking-fees-whale of the sector will have passed.</div>
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The banking sector survival is dependent on global wealth. When global wealth falls, liabilities (held as assets by banks) do not. The securitization/collateral model only works under isolated defaults. The banking sector should sell their fossil fuel exposure to their dotarded clients, and then short the sector.</div>
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The fossil fuel sector will be exterminated whether through high carbon taxes, low carbon taxes, or whatever other managed policies take place. The only question is how fast. Banking/financial firms can either be part of the exterminated or benefit as exterminators, protecting their other assets, and raising capital to invest in successful sectors of our future. There is too much exposure to global political action on carbon dividends to not be part of the exterminators.<br />
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Banking firms either needs to be at the forefront of exterminating dead-ender energy, or at the forefront of crashing the coastal land value market by withdrawing mortgage approvals on properties that will default due to devaluation from rising insurance premiums and sea levels and other banks' refusal to lend to neighbouring properties.</div>
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<br /></div>
<div>
<b>The real estate sector</b></div>
<div>
Most global wealth is held as land value. Very valuable land depends on not being flooded while having access to the ocean, and depends on a climate that permits agriculture and occasional exposure to the outdoors. Mortgageability of land is almost as important to value as livability .</div>
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<a href="http://www.naturalfinance.net/2015/05/all-land-in-florida-is-worthless.html" target="_blank">All land in Florida is worthless today</a>, even if the consequences of climate change are only considered to be felt in 2100. Tax increases to fund adaptation, flood insurance premium increases, and higher nuisance flooding and hurricanes will take place well before 2100. The sad truth is that misery for those born after 2040 to our neighbours does not seem to outweigh the benefits of making an extra dollar from deregulating coal air and water pollution.<br />
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Housing values will face tipping points well before 2100. The 2017 hurricane season was catastrophic for the carribean, but strong storms made near misses to heavily populated mainland US areas as a strong jet stream luckily sheared and weakened the storms at the last minute. Chronically strong hurricane, drought and forest fire seasons will strain insurance prices and taxpayer patience in coming years, along with property values. Even without an arctic blue ocean event, 300k+ and accelerating square kilometer summer losses will bring high visibility/clarity to near term inch plus annual sea level rise, and a temperature shock for drought/forest fire amplification. The visibility of the tipping point(s) will crash property prices. The mistake in climate models and climate planning is not accounting for the acceleration that has happened, and that will continue to accelerate.<br />
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A high carbon tax and dividend policy implemented ASAP may not prevent the personal and humanitarian tragedy of the tipping point to property values. But it will perhaps delay the tipping point to 2050, and having 200 or 300 gigatonnes less co2 in the atmosphere, and a near 50% lower annual emissions level will/may make projects that reduce emissions further, geoengineer the planet, and capture and sequester carbon a conceivable solution to restoring land livability/value, and preventing a humanist and institutional (banking) catastrophe.<br />
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Focusing on institutional/banking concerns, there is far more benefit to exterminating energy dead enders and the dotards financing/legislating for them than in risking the irreversible wealth and property decline that will bring down the banks that align with the dead enders beyond any conceivability of bailouts.<br />
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A carbon tax and dividend structure makes banker decisions simple: Support the obvious market winning investments that offer clearly better value, and which consumers can obviously afford. Though there might be a temptation to corrupt support for energy dead-enders by political interference of a carbon tax and dividend implementation, but that temptation results in destruction of global wealth and population with collapse of the banking sector leading the way, and even with the slow (or slower) decline of the energy dead-enders committed to by the Paris accord, there will still be a devastation of dead-ender investments value, and devastation to the institutions that hold them. Banker support for dead-ender energy ensures those banks to be dead-enders too. Better to support global wealth and land values.<br />
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<b>Every other sector of the economy</b><br />
All wealth and business depends on high population and high wealth. There is no strategic depopulation (extermination) scenario that improves the wealth/lifestyle of the survivors. Small depopulation harms all businesses proportionally to the population decline, and drastic depopulation leads to hunter gatherer lifestyles. As romantically simple as hunter-gathering would be, you might as well have started poor to aspire to it. Those manufacturing and surviving a strategic depopulation won't be poor.<br />
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A carbon tax and dividend regime may increase wages paid and other business expenses, but it diverts spending away from dead-ender energy and towards other sectors. Massive projects and vehicle/appliance/window replacement also generate substantial jobs and income available to spend in other sectors of the economy.<br />
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Not supporting or tolerating politicians that protect dead-ender-energy and militarist businesses and implementing a high carbon tax and dividend is a benefit to every other sectors' businesses and workers. Exterminating the dead-ender energy sector will free talented people and equipment to do non-parasitic work, and help increase global prosperity.<br />
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<b>Tipping point visibility part 2: denial and doubt</b><br />
Harm to your nieghbours children, grandchildren and the poor is a sacrifice willing to be made by baby boomers and oil industry, if it means an extra dollar today. Denial is a convenient way to mask evil, but liberal politicians need do little more than show concern to appear less evil while avoiding a<a href="https://theintercept.com/2018/03/23/climate-change-washington-state/" target="_blank">ny effective policy or programs</a>. Implementation of Paris accord targets or better involves the extermination of the dead-ender energy sector.<br />
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The tipping point for climate action, if continued inaction, will come from the financial and insurance industry. When Warren Buffet pleads for us to buy stocks on the assurance that they will be higher 10 years from now, will the dead end energy sector be higher too? Their financers? Will global wealth levels tied to land be insurable and mortgageable? and will lower wealth values lower the whole market?<br />
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We've known since the 19th century that the planet is 40C degrees warmer than a rock would be at this distance from the sun, and that GHGs in our atmosphere are responsible for this. Still, seeing temperature charts confirming warming is convincing to the layperson in a simpler way than it is for the layperson to distinguish bs from real science arguments. <a href="https://climate.nasa.gov/vital-signs/global-temperature/" target="_blank">From this page</a>:<br />
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<a href="https://4.bp.blogspot.com/-p232lWJj5kg/WreGNIdQw-I/AAAAAAAAAGc/VqXzt6Fjj10T9-Mf8fdRR4npXjuG7HMCwCLcBGAs/s1600/GlobalTemp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="590" height="323" src="https://4.bp.blogspot.com/-p232lWJj5kg/WreGNIdQw-I/AAAAAAAAAGc/VqXzt6Fjj10T9-Mf8fdRR4npXjuG7HMCwCLcBGAs/s640/GlobalTemp.png" width="640" /></a></div>
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This chart both supported climate denialism, and confirms an accelerating trend. It created doubt prior to 2014 because you could draw a line from 1998 to 2013/14 that was fairly flat, and claim a warming pause. The chart obviously supports 1C of warming over the last 42 years, and acceleration can be seen either by noticing the 1942 or 1960 smoothed tops connecting to 2017 has a curved path below it, or noticing that a top and bottom narrow channels between 1975 and 2015 highs and lows has been broken out of from 2016 on. When adjusting out <a href="https://www.carbonbrief.org/interactive-much-el-nino-affect-global-temperature" target="_blank">el-nino la-nina effects</a>, channels and temperature variance get narrower, and the breakout in 2016 is still there. Data for 2017 and later is missing in that link, but the trend for <a href="http://ggweather.com/enso/oni.htm" target="_blank">stronger strong el-ninos and weaker weak la-ninas</a> has 2017 and so far 2018 beat the 2016 record adjusting for el-nino.<br />
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While there are adverse effects of climate change on fisheries, agriculture and forest fires, its unclear how where and when they will get worse. Yet the first tipping point for a financial system reaction to global warming will be the arctic's sea ice disappearance, and the inevitability of very rapid sea rise 20 years out. That 2018 has had record low artic ice extent in a la-nina year for 90%+ of the winter, and <a href="http://neven1.typepad.com/blog/2018/02/talk-about-unprecedented.html" target="_blank">ice previously thought to be 5m thick north of greenland (which has persisted in every summer low ice extent since satellites) vanished in February</a> This may not be THE tipping point, but its of concern, and doesn't take much more to confirm an ice free arctic well before the IPCC projections. Arctic winter ice levels have been dropping/deteriorating from 2016 record low despite the fact that the <a href="http://www.climate4you.com/Polar%20temperatures.htm" target="_blank">northern hemisphere's temperature has not been as warm as 2016</a>. Planetary warming will accelerate after this, including more heat moving to the south pole, and rapid sea rise thereafter.<br />
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I do not consider it alarmist to suggest that the US gulf and eastern seaboard will be unable to get mortgages or insurance on coastal property in 2030, and its categorically impossible to pretend that those properties will be habitable in 2100, if the oil and coal sectors are not exterminated through a high carbon tax.<br />
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<b>Wyoming, West Virginia, and Kentucky</b><br />
Wyoming has a <a href="http://trib.com/business/energy/wyoming-lawmakers-propose-taxing-solar-increasing-wind-tax/article_4b966e3d-2379-5592-84dd-952200336f00.html" target="_blank">tax on wind energy, and proposes to increase it</a>. The dotarded logic is that they love and want to protect coal because they have coal. Though they also have a lot of wind, the dilemma is that politicians can only protect incumbents, because incumbents already have money with which to purchase them.<br />
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The political/democratic process works to fleece the sheep citizens by having single issue politicians representing coal mines or coal burning plants trade votes for other politicians' concerns. Its beyond the scope of this paper to offer a fix this system, and we can resign ourselves to its continuation. There can be a calculation that if local resources are burned, that the energy is free. Yet, the nearly free calculation only works if the resources and burning are socially owned, and with high tax rates on the workers. Coal in fact benefits a minority paid for by a majority.<br />
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These states can still join a carbon tax and dividend alliance/association despite the fact that its sheep would push for policies to use less coal, and may use black market energy. But carbon dividends would be very popular in a state that tries to maximize carbon production. Accepting a carbon tax would mean receiving recognition/credit for efficiency measures when exporting energy, thereby making it possible to export coal derived energy. <a href="http://www.ekopolitan.com/climate/ccs-five-reports-realistic-costs-clean-coal-prepare-yourself-eye-popping-en" target="_blank">Clean coal with sequestration costs an extra $0.05/kwh</a>. For people not controlled by coal interests that makes it worth avoiding, but under a carbon tax of $0.36/kwh, and 90% saved emissions, the voluntary implementation of CCS by utilities would price its energy over $0.27/kwh less than if it did not implement clean coal tech. It makes energy exports possible, uses more coal per energy produced, and creates more work at the utility plants, in a political environment committed to loving coal and coal workers.<br />
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If coal (and NG) retains a use as emergency power worldwide, CCS gets implemented privately and voluntarily with a high carbon tax. Though CCS implementation requires guaranteed energy price/volume purchases over a long period, and/or, capital cost upgrade reimbursement (by taxpayers) if CCS coal energy gets abandoned. But for societies committed to loving coal, committing to long term expense of CCS purchase agreements is committing to that love.<br />
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<b>"Trade wars are easy to win"</b></div>
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As mentioned earlier, high carbon taxes encourage local production of everything, and cheaper transportation of bulk materials for local processing/finishing. <br />
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US led trade tariffs on steel are a reaction to global overcapacity, yet tariffs only increase global overcapacity. Carbon taxes on the other hand not only would use high local steel and aluminium capacity to make replacement vehicles and appliances, but high global metals capacity is essential to global security and building the generation, storage and transmission infrastructure needed to fight climate change.<br />
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The dotardedness behind the US instigating trade wars would also contort in agony over adopting solar energy if solar tech and development is controlled by China. US Tariffs on solar panels earlier this year is one of the world's greatest setbacks in ramping up production capacity. This ties back into the politics of keeping energy prices high for the benefit of utility centralization models, and the dead ender energy sector, and is behind oppressive policies for selected middle east countries and Venezuela.<br />
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If a country offered the US cheaper oil or other energy, should they be punished for dumping? The dotards would even if cheaper and efficient energy is a direct benefit to people and businesses.<br />
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High carbon taxes improving local metal fabrication output, would have the same benefit for local solar production. There are much more jobs in deployment of solar energy than there are in production as well.</div>
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A trade war is easy to lose when the instigator loses sight of its significant weaknesses. Reliance on sovereign creditors and the global banking system's support for dubious fiscal and monetary policy. And where reelection of the nazi regime with approval ratings below 40% depends on retaliations not timed for voters to see more optimistic alternatives. But a perfectly valid alternative to tariff retaliations is ignoring the US. A world made poorer by tariffs is more competitive trading with each other and less concerned with keeping the US solvent, including US corporate crown jewels moving additional production away. Tariffs don't just make foreign goods more expensive. Its an excuse for domestic suppliers to raise prices.<br />
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<b>"Carbon liabilities" and variable carbon taxes accross jurisdictions</b><br />
For business to business sales, the carbon tax does not get paid by the purchasor in cash. Instead, it is paid by taking a (deferred) liability to the government at a tax rate based on the product sold.<br />
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The liability is to a "generic" government. As the product moves accross jurisdictional borders the "owed to" counterparty government of the liability changes in full if the tax rates are the same. If the liability is not transferred to a customer, then it is owed (say) 1 year (or tax filing deadline 1 year after upcomming) after it was first issued.<br />
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Either a blockchain or accounting software upgrades needs to be in place to ease tracking. A carbon liability record includes carbon amount, tax rate, government owed, liability holder, and date due.<br />
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When a sale takes place in another jurisdiction with a different carbon tax rate, if the tax rate is higher or lower, the full liability is owed at the new tax rate to the new jurisdiction. This is to offer a level playing field in the consumption market between low and high carbon tax source markets. When a source country does not follow the carbon tax accounting rules, the destination country may use any prejudice of the source country's environmental care to impute an amount of carbon in the product, and attach a carbon liability accordingly.<br />
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This means that there is no profit margin built on top of carbon costs (and so prices to end consumer not driven up by the presence of middle men), and there is no cost disadvantage from carbon taxes for exporters. Large exporters would be able to satisfy regulators that inputs are traceable to exported goods. So, not only is there no cost to consumers and local economy from carbon tax and dividend, with the carbon liabilities system there is no cost to exporters, and so no valid objection for unilateral adoption of carbon tax and dividends. Without being a consumer only tax with escape for exporters, even small $0.01/kg carbon tax have dead ender energy politicize their lamentations over carbon taxes.<br />
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Some other details include the philosophy that carbon dividends are for residents. Air travel between 2 jurisdictions would likely split the carbon tax paid between the two, though goods shipping would pay the destination's carbon tax. People travelling away from home, might forfeit main residency carbon dividend, but receive one locally for the period they are staying. This accounting can simply be done between jurisdictions based on time of entry/exit, where the amount received from principal residence jurisdiction is adjusted up or down by the jurisdictional transfer payments that take place.<br />
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<b>Evading carbon taxes</b><br />
The streets of Philadelphia might be filled with the particulates of the homeless if they are allowed to cut and burn trees for warmth to avoid paying carbon taxes. This concern is non-existent with a high carbon dividend and/or UBI supplement because it allows the homeless to escape homelessness, and conform to social norms. Wood stoves probably should be taxed based on the implied wood fuel use. Store bought firewood would have carbon taxes. It would remain illegal to chop down city trees. Again, high carbon dividends would lead to a universal dignity level that doesn't make pilfering city trees for firewood a practical problem<br />
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A main evasion strategy is black market goods. This is impractical for oil which needs to be refined (at large traceable scale), and natural gas which is useful because of the distribution infrastructure, though propane/methane tanks might be a hassle endured with high carbon taxes. Meat can be sold on black market. Grain not so much. Campers will be able to get away with burning kindle without paying tax. The large industrial scale economy will be taxed and unable to avoid these. "Larger small businesses" would fail to cause significant impact (or avoid trying) if the activities were policed.<br />
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Vertical integration is a means to avoid paying carbon taxes. Dig your own coal to make your own steel to make oil rigs to get your own oil to power your steel making too make tractors to grow your own grain to feed your own cows. Doing this at large scale involves large conglomerate corporations, and policed rules to not let large corporations use black market/back door transfers can effectively prevent carbon tax evasion. At a small scale, there is no tax applied on the food you grow for yourself.<br />
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Some vertical integration avoidance is feasible. The grain and cattle integration could be combated with beef raised in Nebraska (where comparative advantage would recommend using all land for grain instead of cattle), might have an implied minimum carbon liabilities based on implied grain feed.<br />
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But some "cheating" behaviour can be beneficial. Generic app-driven multi task robots that would drive larger scale vertical/multi-application automation is needed/helpful for building out the mega projects needed for renewable electricity infrastructure. <a href="http://www.dailymail.co.uk/sciencetech/article-2606956/Now-THATS-wind-power-Cows-wear-BACKPACKS-capture-emissions-miniature-power-stations.html" target="_blank">Capturing methane emissions from cows</a>, and then using that as carbon tax free energy creates less harmful atmospheric emissions than letting cows belch directly to the atmosphere.<br />
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<b>High intensity carbon capture and sequestration projects not realistic</b><br />
The Paris climate accord targets propose meeting carbon budget needs by modestly slow reductions in emissions in the next 3 decades followed by gigantic large scale carbon capture and sequestration projects relying on technology, <a href="https://www.nature.com/news/talks-in-the-city-of-light-generate-more-heat-1.19074" target="_blank">carbon sucking fairy godmothers</a>, we are unlikely to develop. Projects need to remove 10 gigatons of carbon per year, and the IPCC's favorite (possibly because it has mistakenly assessed a partial economic return far below the cost, while other alternatives have no economic return) is burning biomass for energy and capturing the emissions. Unless the IPCC is implying strategic depopuplation, one of the major problems with this scheme is the competition with food production.<br />
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A major reason to implement high carbon tax and dividend is speeding up emission reductions such that any capture and sequestration effort is a backup plan used to restore climate to more ideal conditions after likely overshoot, to rely on just modest and feasible carbon capture programs, and to extend the time frame for extreme capture strategies, if they are needed, by several decades.<br />
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A promising (on paper) high intensity carbon dioxide sequestration possibility is placing it in <a href="https://www.technologyreview.com/s/411129/carbon-capturing-rock/" target="_blank">peridotite rock formations</a>. The described process would also use discarded dead-ender energy equipment.<br />
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<b>Ways to enhance moderate private and public carbon sequestration</b><br />
While the price paid for captured carbon delivered to the government cannot be as high as the carbon tax due to the cost of burying it, a more important reason to not pay a high price for "random" carbon is that it provides an incentive to produce it just to sell it.<br />
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Government monitored capture systems primarily in the energy sector can offer the full tax price of carbon if the sequestration process is also audited. The trade of carbon liabilities can also play a prominent role in audited private sector assistance for carbon capture and sequestration.<br />
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I have high hopes for liquid air as a mass energy storage method. The process of liquifying air to -190C passes through the process of making dry ice (frozen co2) at -76C, and all relies on 18th century technology, and abundant materials. Encapsulating dry ice in plastic is a perfectly reasonable practice in a high carbon tax world, and one that with a carbon price, may make such energy storage of greater overall efficiency/profitability/benefit than alternatives.<br />
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Paying a price for "discharging carbon liabilities" equal to the carbon tax less disposal/burial and auditing costs is a perfectly reasonable approach to helping meet climate goals, but a small issue is who pays. "Retiring" a carbon liability reduces the carbon dividend for the society administered by the retiring jurisdiction. For energy (production/storage) related capture, its easy to take the emission offsets (carbon liabilities) from traceable consumers. The consumers avoided carbon tax, and so don't have their carbon dividend increased.<br />
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One relatively low scale carbon capture method involves crushing basalt rock, and then spreading it out on the ground. Usefully, this can be spread on farm land. But the work of crushing it is unrelated to the farmer. Giving a farmer sandbags of crushed basalt does not spread it out for them. He may use the bags to make a fort if they are free. If an auditable agency spreads the basalt on fields, paying for the entire process, even with high carbon tax, may have higher costs than the carbon it captures. If the entire process cost the same as emitting the carbon, and paid by the farmer, the net food price is the same as if they emitted the same as before, but their customers don't receive the equivalent carbon dividend. A project even more removed from consumers is fracking special rocks in shallow oceans to prep them for rapid carbonization.<br />
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Paying for general carbon capture programs should come from the global beneficiaries to carbon limits. This can be proportional with property values and banking relationships at risk, where risk is proportional to mid latitude farmland, and ocean frontage. The projects should also be considered qualified charities, and the concept of "strategic charity" could consider extra tax credits for financially supporting these charities. Basically, the funding should come outside of the carbon tax regime when no significant direct benefit to consumers' carbon tax bill is realized by carbon reduction actions.<br />
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<b>Fudged carbon pricing</b><br />
Undertaxing the carbon emissions of the food sector makes sense on the basis that everyone needs to eat and be healthy, and so undertaxing food makes the carbon tax more progressive (less stressful on poor), that there are no easy immediate paths to reducing such emissions, and that food security is enhanced by allowing for overproduction. Managed/socialized food industry practices might be more appropriate to manage that sector's impact on carbon balance, though rewarded by lower carbon pricing of their food for good practices is still an essential tool in shaping those practices.<br />
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Overtaxing jet travel might be justifiable in that it is a service for the relatively rich, but not overtaxing it, in some circumstances, is justifiable in that there are few alternatives for transoceanic travel (until ammonia economy). On net, overtaxing would have the benefit of reducing use and better funding carbon dividends.<br />
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Under/Over taxing refers to an adjustment to the base carbon emissions tax. At the beginning of this paper, I offered an annual carbon tax increase schedule based on adaptability timing. Each product category can have their own tax rate schedule. Another reason to undertax food, or use a slow schedule is that an auditing infrastructure to permit accounting for lower emission practices will take time to develop.<br />
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The carbon dividend is still total carbon taxes collected divided by people receiving it. Counting children as "half a person" is fair.<br />
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<b>Carbon dividend and basic income</b><br />
Another major reason for a high carbon tax proposal that grants a dividend of USD$10000 to residents is that the dividend is sufficient, by itself, to end homelessness, even if that dividend is not compeletely equal to a tax funded UBI since there are some cost of living (carbon tax) related offsets.<br />
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I used to advocate for a <a href="http://www.naturalfinance.net/2015/11/ubi-funding-option-for-canada.html" target="_blank">$4000 carbon tax/dividend, as that amount was sufficient with minimal tax reform, to support program eliminations permitted by (and funding) total cash distributions of $16k/year in Canada</a>. While $10k is significantly more, carbon tax revenue will/should drop drastically each year. Removing welfare, unemployment insurance, public pensions, retirement support, post secondary student support, use clawbacks to fund public affordable housing, can consider <a href="http://www.naturalfinance.net/2015/05/slashing-public-education-can-provide.html" target="_blank">public-private partnerships for children's education</a>, and use <a href="http://www.naturalfinance.net/2016/06/life-accounts-previously-refered-to-uli.html" target="_blank">life loans</a> to further support students, business creation, and lower tax rates. A high carbon tax will reduce singe occupant gas-powered vehicles on the road. A benefit to both rich drivers and tax payer funded road expansion budgets. The economic growth from UBI and removal of programs would pay for it, even as carbon tax revenue drops.<br />
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An important benefit of carbon dividends and UBI are the health and criminal management budgetary savings, and as important, the avoidance of victimization and stress directly related to the misery and desperation associated with poverty. Reduction in suicide, terrorism, and rampages has significant human value, and a direct result of creating a less stressful world.<br />
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The only valid objection to UBI is a personal value in the structures (public and private) that grant permission to survive being empowered by<a href="http://www.naturalfinance.net/2017/04/work-ethic-is-code-word-for-slavery.html" target="_blank"> a harsh society made desperate for those permissions</a>. UBI instead creates wealth, and offers more opportunities that are easier to pursue through fair labour markets and an environment enabling permissionless creation of our own work.<br />
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Yet despite my recommendations, societies will choose their own carbon dividend and UBI rates. One advantage of some supplemental UBI amount is providing a fixed carbon dividend (including UBI) for budgetary certainty of citizens. ie. carbon taxes contribute part of the funding for UBI that is higher than just the collected carbon taxes.<br />
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The most important reason for a high carbon tax and dividend of those listed in the high vs medium section above is #4: That the poor can make the same lifestyle adaptations as the rich. This in fact may appear to be reason to accelerate the ramp up schedule for carbon taxes, but its really a reason to accelerate the ramp up of the dividend portion ahead of the tax portion... with UBI.<br />
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<b>The friction to universal adoption among nations for high carbon taxes</b><br />
Lets assume that carbon tax and dividend is not an equally easy sell for every nation. That dotarded blindness could come from these sources:<br />
<ol>
<li>Climate stress will provide an environment rich for weapons sales to suppress/oppress those harmed by climate stress.</li>
<li>Resources owned/controlled by a society "should be" seen as free, and those profiting from their exploitation "should be" protected ahead of both consumer preferences for cheaper energy, and social harm caused by climate stress</li>
<li>Freeloading off the rest of the world's climate harm reduction efforts while denying/delaying/studying what to do instead of a carbon tax and dividend.</li>
<li>Freeloading by adopting a low carbon tax to minimize local disruption and adaptation.</li>
</ol>
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To the first point, the dominant geopolitical alliance of the future can only be one focused on the primary global security issue which is climate habitability. An actor transparently agitating for misery, chaos and conflict can only rally opposition and be treated as a nazi pariah. Future climate accords, as minimum agreed standards, should insist on carbon tax/dividends, and should make ratification a condition for UN and OECD membership. NATO should also make climate hospitability directly related to global security commitments and non-agitation-behaviour clauses either a condition for membership, or where false flag agitations are properly investigated, reimbursement of allies support expenses for militarist murder a condition for future good standing membership.</div>
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To the 2nd point, an imaginable geopolitical fault line would group oil producing nations in an axis vs an alliance of non-producing countries. The extermination of dead-ender energy requires low fossil fuel prices (and a carbon tax). Where the alliance would drive the price of fossil fuels down by not demanding as much, production would favour the lowest cost producers such that even those with fossil reserves might need to import fuel. A prosperity disparity between a carbon dividend receiving alliance and the axis shitholes would grow. Exports from axis to alliance would pay carbon taxes. Exports from alliance to axis would not. </div>
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Regarding the 3rd and 4th options, the 4th option seems better. By cooperating with the alliance, even with a low carbon tax, and a commitment to <a href="https://www.vox.com/identities/2018/2/23/17044912/scott-pruitt-bible-oil-friendly-policies-evangelicals-environment" target="_blank">burn every drop god has blessed them with</a>, audited capturing/sequestering fuel emissions, production emissions, and agricultural reforms would result in lower carbon taxes for those nations' exports compared to the alliance assuming the worst case production behaviour of inputs and manufacturing. The strong political cronyism in favour of these industries can justify the waste in subsidizing clean goal and gas through energy security and resiliency arguments.</div>
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<b>Geopolitical path to saving the planet, by adopting carbon tax and dividend.</b></div>
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China and Europe produce minimal oil. North Africa to south west Asia have ideal solar and wind sites. China has a production lead in solar production. Germany/EU are leaders in wind and UHVDC transformers. Interconnecting Afro-Eurasia would be the world's greatest project investment employing and enriching the region for the next 20 to 50 years. These infrastructure projects are more important than the belt and road initiative, though they are related in influence/foreign investment/development, and should get European finance buy-in. It may be enough by iteself to save the planet.</div>
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A carbon dividend will further ensure the Afro-Eurasia regional dominance, regional harmony and peace. All Northern Hemisphere oil powers have great wind sites, technology assets, and great benefit from transmission lines, and so tremendous opportunities and gains from joining into (and grid-connecting through the great wind resources of eastern Russia and Aleutian islands) the Afro-Eurasia prosperity plan.</div>
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Bombing and war would be the only way to prevent Afro-Eurasian prosperity. Seems like a dumb move when sharing in that prosperity is the alternative, and the war path leads to decline in global wealth and banking system in addition to global humanitarian catastrophe.</div>
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The good news regarding the potential for Saudi-US manufactured war against the usual suspects is that it's only possible with continued global enthusiasm for oil that sustains high oil prices and volume. If Saudi Arabia has no funding to buy the terrorizing of its neighbours, then the militarism doesn't happen. Grid connections through Spain and Kazakhstan can bypass the middle east in order to bankrupt the kingdoms, before integrating their great solar and wind resources into the Afro-Eurasian prosperity region. In fact, threatening to go through Spain and Kazakhstan as primary routes may be enough to get Saudi Arabia to partner in the great solar infrastructure for the major continent, and to desist on its destabilizing influence on the world.<br />
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There is plenty of energy in renewables, and the production and distribution infrastructure to exploit it will make the world rich, as well as everyone who contributes to the needed projects. Geopolitics should worry less about controlling and limiting others' energy, and assuring that they have an early role in maintaining a habitable and prosperous planet. Land, money, technology, engineering are all great assets to contribute and obtain returns.</div>
<div>
<br /></div>
<div>
<b>Non-OECD adoption of renewable energy</b></div>
<div>
To address Kevin Anderson's (video at top) defeatist concerns regarding expected OECD fossil fuel use, I'll first note that OECD excludes China and India. India has fewer overall renewable resources than China, but still very practical solar opportunities. It certainly would be in its self interest to participate in financing the much cheaper solar interconnection of Afro-Eurasia project than expensive and over-polluting coal energy option. </div>
<div>
<br /></div>
<div>
For the rest of the third world, for centralized energy that competes with coal, the fact that everyone of these nations sits between Australia, South Africa or Chile/Argentina (who all have excellent renewable resources, and high consumption demand) and high consuming northern nations, and all have excellent solar resources themselves. All of these countries could host utility scale solar projects that have close interconnection points to the transcontinental grid that lets them export power. Even without any carbon taxes, near equatorial countries are on the front lines of global warming death zones. It would be unreasonable to resort to coal, and the energy would be unexportable anyway. With high carbon taxes, there's no economic consideration for coal anyway.</div>
<div>
<br /></div>
<div>
At the undeveloped village level, solar is the best individualist or communal microgrid option. The cost is well worth saving the firewood gathering time of even the poorest individuals.</div>
<div>
<br /></div>
<div>
So, non-OECD emissions are dependent upon storage and transmission access much like the rest of the world.</div>
<div>
<br /></div>
<div>
<b>City/regional driven carbon tax and dividend plan</b></div>
<div>
Cities do not produce or benefit from production of fossil fuels and tend to be annoyed by the pollution. Carbon taxes at the city level must solve the suburban and exurban leach problem. An essential part of the solution is a carbon dividend paid with the carbon tax proceeds. It means no one is penalized for the cost of their home climate control, and that is the first step to bringing the suburbs on board. Where suburbs and exhurbs have less density, they can better take advantage of solar panels, and escape the tax while still benefiting from the dividend.</div>
<div>
<br /></div>
<div>
The primary leeching opportunity is to fill up on gas outside the jurisdiction, and then pollute your city with it. The answer to the leeches is to have a toll to enter the city/region. Every gasoline powered vehicle crossing into the city pays a carbon tax equal to a full tank of gas in their vehicle. One relatively easy way to administer this is to photo license plates, but it will still be an aggravating policy for those affected. But everyone who is aggravated by this can simply vote to join into the carbon dividend region. The only people who would oppose this are the gas station operators close to the regional border.</div>
<div>
<br /></div>
<div>
Businesses that sell goods outside the regional border would use the carbon liability system, where energy and imported inputs (if carbon-taxable) are refundable (or payment delayed as originally described) for the portion of goods they sell outside the region. Imports into the region (from a non-taxed region) would not only pay the shipping taxes on carbon (based on that full tank of gas for the vehicle), but pay carbon taxes based on the dirtiest energy from the source region. These policies encourage businesses from other regions to push for carbon tax and divdend at home such that the carbon efficiencies they implement can be reflected in the carbon taxes their export customers pay, and also encourage the more rapid extermination of coal energy.</div>
<div>
<br /></div>
<div>
This grassroots approach can be very effective. Similar to the EU or China or Afro-Eurasia, it does require just one "nexus" city to get rolling, and lead by example. It would lead to significant immigration and economic activity: Solar installations, ammonia plants, ammonia conversion of vehicles (though being a pioneer lets you sell used vehicles to the losers, while there is still a market), new vehicles, and building of housing for new residents. It may make sense for carbon-dividend-rich residents to be enthusiastic about tax funded projects such as public transit, though the private sector can also simply fund these through user/rider fees that can be high, but very competitive compared to gas guzzling.</div>
<div>
<br /></div>
<div>
<b>Private and public coordination of energy projects and bitcoin mining</b></div>
<div>
Most energy projects today, involve the public sector, and especially for renewables, a fixed power purchase agreement. Coordination between an energy plant and transmission lines is important since both are useless without completion of the other. The energy plant also wants assurance that its customer will buy all of its power. Hence, power purchase agreements. High carbon taxes are essential in motivating utilities to accept EPAs from producers. Without high carbon taxes, might as well keep coal plants the utility often has a financial interest in, around.</div>
<div>
<br /></div>
<div>
The EPA and transmission line connections makes energy projects slow to implement. Planning and money allocation by the utility drives the construction timing. This paper proposes several difficult to coordinate additional complexities such as industrial processes and storage linked to renewable energy plants, and transnational HVDC transmission and trade relationships.</div>
<div>
<br /></div>
<div>
Bitcoin miners are small light boxes that transform electricity into money (digital cryptocurrency) and heat. Bitcoin is permissionless money, and it enables permissionless energy generation. An energy provider can use bitcoin miners to fund completion of their project's scale (from partial energy generation capacity), and can build or complete an energy generation project before industrial users or transmission lines are started. Once industrial/storage/transmission sinks come online, the generator can then sell its bitcoin miners, or transfer them to a new constructing project. With minimal storage, bitcoin miners are useable with variable/intermittent power sources.</div>
<div>
<br /></div>
<div>
UHVDC transmission lines require scale to justify the higher expense compared to ordinary transmission lines (which still require some relative (smaller) scale to justify connection). Industrial processes that produce 1 truckload per day or per hour of ammonia are large scale projects that need a big chunk of energy. Bitcoin miners are small scale devices that use up one household fuse worth of energy, but they allow energy generators to build out supply ahead of demand sinks being completed.</div>
<div>
<br /></div>
<div>
A high, much more than a low, carbon tax allows for solar and wind capacity to be deployed without the need for coordination of timelines with the projects that use or distribute that energy (through bitcoin miners). This means fast deployment, and then faster "real useful" sinks for the electricity supply than if coordination was required. Bitcoin mining can importantly eliminate the required floor price that generators bid for on projects, and so instead of just<a href="https://www.thenational.ae/business/energy/world-s-cheapest-prices-submitted-for-saudi-arabia-s-first-solar-project-1.663842" target="_blank"> 1 of 20 bidders bidding under 3 cents for a solar project getting approved</a>, they can all just go ahead and build.<br />
<br />
Turnkey solutions for ammonia production could replace bitcoin miners. But these require large scale production capacity, and are not as easy to sell or move if "real" supply sinks come on board for the produced energy... though they can be a permanent part of any energy project using all excess energy production, and added in chunks as sufficient chunks of "baseline" (cloudy/relatively calm wind) energy production scale is added.<br />
<br />
<b>Working with energy companies and governments on the extermination of dead end energy</b><br />
Large private and public oil interests, especially if they don't invest in new exploration, drilling and pipelines, have good cashflow from existing operations. These are fundamentally engineering and geology companies and have the talent and resources to contribute non parasitically to humanity.<br />
<br />
The lack of future oil development will likely cause short term increase in the price of oil, and so help fund humanity-useful projects should they wish as a firm to survive, and be tolerated. Either way though, their workers will have ample opportunities as the world builds the needed major infrastructure.<br />
<br />
Part of adopting the high carbon tax and dividend solution to climate change should include excusing oil companies from climate change liabilities that are the subject of current lawsuits.</div>
<div>
<br />
Government assistance to accelerate renewables capacity and infrastructure can include paying for plants in their countries, even though the sector's profitability is assured with high carbon taxes. The assistance would provide multinational expansion of renewables/infrastructure engineering firms that should accelerate their output capacity. Governments shouldn't be shy about requesting a profit share for such assistance, and it should not be paid from the carbon tax/dividend budget.<br />
<br />
<b>Next IPCC led climate accords must</b><br />
<br />
<ul>
<li>recognize a pace to exterminate fossil fuel based energy sector.</li>
<li>abandon BECCS as a likely eventually viable solution. </li>
<li>recognize high carbon taxes are needed to achieve any reasonable climate targets</li>
<li>recognize that carbon dividends are essential for allowing the population to adapt to new technology, and to accept the carbon taxes.</li>
<li>assess means of global/long range electricity transmission for supply to meet energy demand where it is needed.</li>
<li>assess the prospects of an ammonia economy.</li>
<li>assess likely pace of arctic sea ice melting away, and any accelerating impact once it does.</li>
<li>assess a baseline co2 and ghg content to product categories.</li>
</ul>
<br />
<br />
<br /></div>
<div>
</div>
</div>
Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com7tag:blogger.com,1999:blog-2467928492793719077.post-32096823296302509642018-02-20T13:42:00.001-08:002018-02-20T13:42:37.801-08:00Fictional future history: Reclaiming Mobile Alabama, 2077<div style="margin-bottom: 0cm;">
Today, I have a meeting with Ron Moore.
Great grand son of the last President of the 50 United States. It's
very unusual to have face to face meetings these days, but he
insisted. I think I know that he is pushing for Canadian funding of
a sea wall to be built along the Alabama coast, and he also implied
that he has an engineering company that would profit from the wall.
I am not racist but, crooked Alabaman scum will never integrate into
Canadian values. The Moore family is (or was... I don't know them)
the most crooked of the bunch, and I'm pretty sure he will propose
something unethical or illegal... only explanation for face to face
meeting. Still, I just agreed to this meeting...</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Dad?” My 2<sup>nd</sup> ranked
(of 7 – all 8 years old) gataca'd daughter is having breakfast with
me in my pod. Her name is Cindy. My wife and other kids (we also
have six 4 year old boys) are elsewhere in our pretty large apartment
complex.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“I will take the last 2 generobots to
power my bike trip to the Moore meeting.” I tell Cindy (not that
she asked). We just got our 4<sup>th</sup> and 5<sup>th</sup>
generobots. Top of the line latest generation. New designer and
builder, upgraded OS but still compatible with older generobots, with
same high level app-style task programming. We were doing just fine
with 3, but these do just about everything faster, and can lift with
much more power than older models. Its a bit of an extravagance,
but I will build everything kids want with them, implement some
manufacturing ideas, and we're always looking to rearrange our
living quarters for social needs. I am staring at an older generobot
that is transforming my pod from sleeping mode to work and meeting
mode, as I say this.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Dad? Why did the United States
dissolve?”, Cindy asks me, as I am lost in thoughts with generobot
applications and Crooked Alabaman meetings.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Three main reasons, sweetie.”
connecting with my child, I launched into the background/root causes:</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<ol>
<li><div style="margin-bottom: 0cm;">
Governance for the last 10000
years was always focused on kings and rulers inflicting slavery on
its people for the benefit of the ruler-ship clique. High national
debt loads were sustainable as long as they appeared sustainable.</div>
</li>
<li><div style="margin-bottom: 0cm;">
When Canada adopted Universal
Basic Income, Direct Delegated Governance, and Cash Flow Taxation,
it created massive economic demand in Canada, a super efficient
government, and massive production and employment opportunities.
Many Americans emigrated to Canada including my grand-dad when he
was 20, back in early 2030s...</div>
</li>
</ol>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Dad?, why doesn't slavery create
more production? If you can force people to work more, shouldn't
more get done?” -Cindy interjected</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “That's a good question, that
fooled society for too long. Slaves are awesome for the rulers. For
a long time, rulers needed them to protect their interests, form the
military enforcement of their potential interests, and tough it
seemed like the obvious way to keep the ruler-ship clique as rich as
possible if those doing the work are paid as little as possible, this
is actually not so.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Cindy: “Is this that Structured
Domination Theory?”
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Cindy's education curriculum includes
advanced logical fallacies. Usually it's recommended for kids aged
12 or so, and as a society, we feel that we must teach all
corruption and lying techniques to everyone in order to protect
ourselves from the evils of our past. I most certainly could not
learn these things when I was 8, though I also enjoyed a
self-directed curriculum. One of the main benefits of gataca-ing our
children is that we mainly screen for intelligence, with of course
health and energy being very important too. Cindy had the 2<sup>nd</sup>
best predicted intelligence (of our 8 year old daughters) from our
genetically screened thousands of fertilized embryos, and though
Sarah (our 1<sup>st</sup>) is very smart, she's just not as
inquisitive and passionate about learning. I'm the only one who
knows who the real biological mother of our sons is (Cindy is the
mother of 4 of them). All of my daughters and wife had eggs that
were fertilized and they all know that they could be each of the boys
mother, grandmother or sister, but they don't know the exact
biological role. Because of boys naturally higher genetic potential
(by gataca process), they all had some of the record highest
potentials when they were born 4 years ago, though millions of
younger babies have exceeded that level already. They are all even
noticeably brighter than Cindy. I think this is the right number of
kids, and would do the same if I had to do it again. The
incubation/screening costs are about the same whether we had 1 or 10
babies at a time, and our life effort for taking care of 7 babies for
one year is much lower than 1 baby per year for 7 years. A lot more
kids would spread too thin the attention we are able to give to each
one as they mature.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Yes, structured domination is
the same benefit and control of slaves without the slaves knowing
someone specific to blame for their condition. So it's even more
powerful.” The freedom of basic income though has proven to be a
more powerful economic driver. Work is much more profitable when
only those who want to work are working, and being more profitable
motivates more people to want to work. More importantly, the more
the freed masses have disposable income, the more work is needed to
collect their spending. With basic income, and the automation we
developed to do manual labour, most work quickly became like it is
today: Sales/persuasion or some variant of it. Where slavery broke
down economically, is when society's rulers ran out of necessity to
make the slaves work, because machines could do it. They had to
choose between extermination and freedom, and many jurisdictions south of the original provinces looked long and hard at making extermination work. Also, slavery is bad, and
even if rulers can use structured domination tricks to control people
the same way, it's still wrong.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“You said it wasn't just basic income
that improved Canada. Our direct governance and tax code changes
were just as important?” - Cindy asked next, obviously attentive.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Maybe even more important” I
added. The high business cash-flow-based tax rates needed for UBI
encouraged many businesses everywhere to locate production in Canada,
because of the tax refunds that choice gave them. They also spent a
lot on marketing in Canada so that the UBI income of Canadians flowed
up to businesses. Direct democracy made sure to cut government
program spending to the super efficient minimum, since every cut
meant a higher dividend payment for everyone. So, it's the 3 things
together that made Canada into the dominant economic power with its
head start on traditional countries. Higher and higher UBI led to
higher and higher entrepreneurship.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Cindy: “I don't know if I want to
work when I grow up, Dad. How much UBI will I get?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “If it doesn't go up anymore, you
will get $30k/year or about $2M over your expected lifetime. What do
you think you'd do instead of working?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Cindy: “Draw, dance, play games,
read, watch videos, go to the beach.... so many lazy things to enjoy”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Well a couple of those are
creating stuff. You like the feeling of accomplishment and attention
you get from creating stuff? I think you like reading because you
like learning. I used to wonder the same thing when I was young, but
I had so many ideas, and it was pretty easy to ask for help with
those ideas, and people asked me to help them, and it only took a few
hours per week to help. At first the extra money was good for more
trips to the beach, then it was getting more generobots. It was fun
to enhance these, and it was also a source of extra money renting
their time to the coop. Work eventually became a path to bigger
living space, and more entertainment, and finally the security to
choose a large family to fill up our lives.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “But its not all about money.
Your mom started her baby incubation business for money, but her
contributions to the cooperative-sourced home incubator model is only
in part about money. It's much less money than old monopoly patent
models, but it's helped bring affordable and convenient child
production to the world, or at least to Canada for now. My
activities in social governance are unpaid, but it brings me
satisfaction and prestige, and like today's meeting, new friends who
want to influence me.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “... Speaking of which, I've got
to get going to this meeting. We'll finish talking about the US's
decline when I get back. Pick any tutors you want for the day, and
go with your sisters or mom if it's out of the building.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
I needed to take two generobots (the
best ones of course... if only to impress) with me. I quickly
reprogrammed the tasks they were assigned (mostly going to our
communal and private gardens on floors above 160 for cocoa
processing, and starting a new batch of lab meat), and distributed
some tasks to other bots, but mostly rescheduled them. I did most of
this on the 123 floor elevator ride to the velomobile storage room.
I still call it cycling even if the generobots are providing most of
the power. Family-sized vehicles cost too much to park, though I try
to convince everyone that I prefer cycling regardless of cost, and of
course I do, or at least I've convinced myself too. The big
advantage is that with generobots, the motors follow me around and
install themselves into any application including my (or often
shared) inexpensive light vehicle, that I built with generobots.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
My ride from Evergreen to the
Foundation for Moral Law offices in Montgomery is not one I do often.
I usually go towards Upper Mobile which is a major fundraising nexus
for building the sea wall that will restore livability in old Mobile
Bay area (where I own land passed down from my great grand parents
who fled to Toronto to join my grand-dad when sea level rise
destroyed their home). This proposed sea wall is so small compared
to all of the other areas of North America, but Alabama was so poor 5
years ago when they were “allowed” (under more oppressive terms
than any other former US state) into Canada, and part of the terms
were that it raise taxes enough to fund most of the sea wall itself.
The project is complicated because the big winners are those who own
land that would be reclaimed (worthless for the 40 years it will take
for CO2 cleanup to take its course, if no sea wall is built), while
losers would be those who currently have beachfront land, though this
land is not currently valuable and being developed due to the
expectation of either an eventual sea wall, and/or receding sea
levels. Beachfront land in neighbouring Florida and Mississippi is
10 times more valuable.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Along the way to Montgomery, I see
several new 200 story buildings, and several more under construction.
Evergreen and Greenville have grown into cities of several million
inhabitants entirely from Canadian immigration in the 5 years since
provincialization. These skyscrapers are nearly self-sustained
habitats, but significant manufacturing, including most generobot
builders have added capacity in Greenville to redevelop Alabama to
Canadian standards and take advantage of the high tax rates and
spending credits. I think fear and uncertainty about Alabama leads
Canadians to choose the ultra dense designs they know from home.
It's pretty ideal for community and cooperation, though native
Alabamans still prefer their sprawl and space.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Getting to Montgomery though is
sickening. Ruins from the stupid robocop policies of the early 2050s
are not fully rebuilt in some outskirts. The first 200 years of
Alabama politics were pretty centred on the “negro problem” but
oppressing blacks at least had the advantage of more easily
exploiting their labour. By the 2050s, there simply was no longer a
need for slaves, but Alabama politicians still held power by
supporting militarized robocop assaults on black neighbourhoods.
There was some generobot resistance/terrorism which were blamed on
black citizens, but I think what finally led Alabama to beg for
provincehood was that black people had mostly fled to lead happy
lives in other parts of Canada, and so their politics couldn't be
divisively centred on hatred of “non-real-Alabamans” anymore.
I'm not racist, but this is the roots of the redneck scumbag I am
about to meet.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Right after I ride though the gates of
the Foundation for Moral Law compound, I see two friggin 12 foot tall
robocops with twin Gatling guns “guarding” the path. Freaking me
the hell out, as I was expecting “normalish” offices. Call my
wife, “I think I just entered a Nazi compound evil KKK lair over
here. If you don't hear from me again, I've been murdered.” I said
in a semi-panicked voice.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
“Are the robocops giving you a
countdown to comply? No? Then you probably have a few more hours to
live” was her calming reply. Before going in though, I was
panicked enough to get my mind racing through to program the
generobots with electro-weapons (no real weapons with me). I knew
that they would not be allowed in the meeting (due to their
potentially incriminating recording capabilities), but my plan was to
leave them nearby, in reception area perhaps, and program them to
respond to my yell, and try to shock anyone close to me. This
seemed pretty clever for a 20 minute coding process, but it was
untested and crude.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Entering the compound with my
generobots in tow, I was comforted that there were no nazis or goons
of any type. There were in fact no noticeable people at all. A
directory pointed me to Ron Moore's 2<sup>nd</sup> story office.
This in fact did lead to a reception area, but it was unstaffed.
Just a relic of historic home designs, I think. The lack of indoor
robocops or goons of any kind did comfort me. The ostentatious
palatial 19<sup>th</sup> century mansion and outer security facade,
belied a low operating budget, that was crystallized when a very
outdated generobot (at least 5 years old!) took my coffee and pastry
order. How was this Ron Moore guy going to bribe me?</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
As Ron greets me and guides me to his
desk, he asks “So I hear you have 80 million Canadian delegates.
4<sup>th</sup> highest. Does that make you a senator or something?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Maybe a senator who can lose his
seat after every vote. It's 80 million delegates for economic
project issues, I have zero in Military budget and moral issues. A
handful in environment and energy regulation. Those that have more
delegates than me tend to vote no on all project proposals that
involve any UBI sacrifice. I vote no a lot too. The focus for most
projects is gathering private or other narrow funding and debt, such
that no UBI dividend cut results from the project, while the project
still an expectation of future increases. I gained most of my
delegates when I structured Alabama's provincialization.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron nods as though he knew that there
are no senators or parliament or head of state anymore. Just
functional silos, each with their own narrow executive power, and
subject to audit, recall, and democratic overthrow on a regular
basis.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “This morning my daughter asked
me why the USA dissolved, and my answers are always longer than an 8
year old wants, and so long in this case, that I never got to the
specific catalysts. So, bad economics/no basic income, high debt,
and high emigration were the background factors, but your grandparent's role in fracturing the nation seemed pretty central. Decades of
Republican election fraud, persecution of non-conservatives including
minorities. Sure, the first big West Antartic calving was very
destructive to banks and insurers worldwide, but other countries
managed through the devastation without dissolving their nation. Do
you acknowledge that your grandparent was responsible for... uhmm...
(lets go with the least polite version here) the destruction of
America?” -- A bold small talk question, with which I asserted my
dominance.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron did not seem upset by the
statement/question, and instead appeared very reasonable and
non-rednecky in his reply, which since I am not racist, should be no
surprise.
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “The politics at the time did
not allow for conciliatory appeasement of our enemies. Driving away
liberals and minorities was a political necessity. I heard it
justified by my family in 2 ways: First, we can value the admiration
and respect of our family and close in-group over the world's
respect, and second, our family retained power, and did better
through “the destruction of America” than we could imagine under
a prosperous but liberal blaspheme to White Christianity. Even if
there was obvious economic retardation caused by clinging to heavily
hierarchical economic domineering models, the top of the hierarchy
sees clinging to its past gains as more comforting than the prospects
of competing in the prosperity of freedom, and besides, the hierarchy
could maintain its power relationships and just invest in the
prosperity that basic income lead to.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron continued: “ Making a credible pretense to opposing progress let us make investments in that progress at a cheaper price, and channelling our
“United states of Canada” profits into acquiring cheap land in,
what you called, “Jesusland-Alabama” positioned us well for our
Provincialization 5 years ago. And this is a theme I wanted to talk
to you about, today. “</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Can you see a way for you to
leverage your position in Canadian governance to benefit yourself or
other parties on this Alabama sea wall issue?”
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “First, I've inherited what was
resort property on Dauphin island. So I do have a personal interest
in seeing sea level drop in the area put on an accelerated path.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “But I don't see a way for me to
corrupt the process of proposing a sea wall solution. We start with
computer models of everyone that benefits, then match the costs of
the project proportionally based on benefits. The biggest
benefactors by far are Mobile Bay property owners, as a very short
section of wall restores a large amount of land that was previously
heavily used and worth a lot for Alabama. The next group of direct
benefactors are the south western coast of Alabama property holders.
It seems obvious that we want a full wall that connects to Mississipi
and Florida's wall, but the south west portion is longer and reclaims
less total land than the Mobile Bay portion. It would cost Mobile
Bay property owners less if we just built a tiny wall for them, and
let the rest of the state rot.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Regardless of the funding
formula, the benefactors are currently unable to benefit from their
land. They need the help of Alabama and Canada's funds and access to
debt to fund the wall, and their property taxes (and surtaxes) will
pay that funding back. Alabama and Canada and their people also have
benefits from the land reclamation: Higher future income tax revenue
and prime space to relocate to. It means higher future basic income
dividends for everyone. Debt financing seems like the preferred
solution as it means not sacrificing current social dividends.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “This should have been relatively
easy for a small wall and done by now. The tension between Mobile
Bay and the rest of the Alabama coast is a big deal. Florida
panhandle property owners are interfering because it will make their
land less special/valuable. They're playing all sides telling
Canadians and Northern Alabamans not to pay anything, pushing every
benefactor to be extra greedy and uncompromising.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Did you mean if there was a way
to create graft on the cost side? Benefit a specific supplier?” I
asked sensing that I was focusing on issues that were preoccupying me
the most, rather than answering Ron's question.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: I did want to know all the stuff
you just told me, but Yes I am interested in this question”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “So the implementation proposals
are separate votes from the funding and needs arrangements, and even
when a proposal is approved by the majority of funding stakeholders
(Property owners, Alabamans, Canadians or their delegates); many
improvement proposals usually get voted on in quick succession, often
with competing suppliers arranging among themselves to subcontract
portions of it. Its very hard to pad the cost budget because of
this. Providing cost and completion time guarantees or penalties, is
not really padding. It's risk shifting. Also, because we do almost
every project with thousands of generobots from the Borg cooperative,
the costs are very predictable: A function of materials needed
really, since there is no manual labour. The cost of the design file
isn't big and doesn't vary so much even with constraints placed by
the approved proposal.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Let me suggest a way we can
profit from this process, but first, is this project something you
want, and how sure are you it will get funded?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: Yes. Even with high property
taxes on the area, and Mobile Bay property owners subsidizing
southwest Alabama's wall portion, I expect high property value
appreciation. The returns to Alabama and Canada fully justify the
debt involved (there are regulatory safeguards on allowable public
debt). So no one has to sacrifice their UBI dividends to support it,
and so as soon as we settle on a compromise among the property
owners, it will speed through approvals at the higher financing
levels.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “My idea is to propose a
solution that will cost 5 to 10 times as much: Build a giant sea
wall laying machine (fairly high fixed cost), but that reduces the
variable cost and time per meter of wall drastically.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “That doesn't make sense.
Alabama is the last place in North America that needs a sea wall.
This would seriously sabotage the project .”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Well the advantage of
“sabotage” is that we can acquire land cheaply if the sabotage
successfully depresses expectations of any project, but even if the
new project fails we can go back to the simpler one. When I say we,
I am suggesting that you may be offered blockchain smart contract
payments upon profitable land resales... The giant machine would be
justified if Mexico or parts thereof were provincialized with UBI.
What do you think of that?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Well Mexico and Latin America
did poorly over the last 50 years. They lacked the capital and
consumer wealth to compete with automated production. The region was
a source of very heavy emigration to Canada. The powerful there
lacked the will to copy Canada's high tax structure because it
threatened their exploitation profits (even though automation
threatened it more), so they never offered the production credits
that could attract foreign capital to their nations.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Also, there was considerable
opposition from Canadians to provincializing Alabama 5 years ago, and
Mexico is even poorer than Alabama was. It meant sacrificing “real
Canadians” UBI dividends to sponsor “inferior hateful rednecks”
as an investment in their development. Some made it out as a
charitable request. It was a major uphill campaign to get a majority
approval, and I'd see even more resistance to assimilating Mexico.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “But the terms of Alabama's
provincialization were fairly oppressive... including tributary
levies of Alabama tax revenue back to Canadians. Limited state, I
mean provincial, UBI until we paid off the advances. Imposed
deadlines for democratic reform to your delegate system. Our
foundation here protested against provincialization... But it's
turned out great. Land values soaring. No crime. Millions of
square feet in new development each week. Elysium and other
technology.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “And the tributes back to Canada
are ahead of schedule. I think all peoples are pretty happy with how
it turned out.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Exactly!... and Alabama serves
as a model for provincializing Latin America. It shouldn't be sold
to Canadians as a charity project, because it's not. Alabama was not
a charity project after the terms YOU insisted on. Provincializing
the world is a development project that leads to higher UBI for
Canadians, just like it did in Alabama, and gives them a sunny
destination to develop and expand with ever larger families.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Canada had always wanted to
drastically increase its population. Is there a concern for world
overpopulation though?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Overpopulation is always a
local issue. Our nearly free energy allows indoor agriculture and
those 200 story habitats you people are putting up all over Alabama.
How come you guys don't sprawl out on all of our empty land?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Our habitats are cooperatively
owned, financed by Canadians before they come down, and it's cheap
enough that UBI covers the financing. It's an open design. No
speculator intermediary. With space for 200k adults, were paying for
1/200000<sup>th</sup> the land, the foundation, the roof,
elysium-centers, power backup... Density saves on energy. Having 20
times the space in the open would cost 200 times as much. Part of
the appeal for immigrants is not relying on local police and
authorities for protection. Part of the coop appeal is people
contributing their generobot time to the project and/or getting a
used generobot upon completion. So getting back to your giant sea
wall machine proposal, the recycling/reuse/occupancy time of
generobots is a major factor in keeping projects that use them,
inexpensive. They transition to industrial and home use very
easily.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: Newest generation of generobots
are strong enough to weld and build large complex machines.
Generobots will build the machine. It's expensive because it's
complex and will probably require several prototypes. Building a 2<sup>nd</sup>
copy will be cheap. By the way, I have no involvement in the
building of this machine. I just want to buy cheap land ahead of the
projects when the public is unaware that approval is imminent. The
machine can be up for public bids, financed privately, if Canada
guarantees say 1000 or 2000 miles within 10 years at half the cost of
generobot build per mile.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “You also want me to create an
impression that an immediate sea wall protecting Alabama is being
abandoned? For weeks? Months?”
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “A few days should do it. Just
announce something pessimistic about East side vs. West side
squabbling. We'll put in a lot of land purchase offers just below
current market. Many properties are bank-owned and even securitized
into portfolios. Dumb AI will react to the news by automatically
accepting our offers, and the drop in the securitized indexes will
scare real people into accepting too.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “I'm liking your plan in terms of
what is good for Canadians and Mexicans too. The South East and
South West Alabama squabbles can get resolved by diverting their
property taxes into royalty shares from the giant machine project.
So even if Mobile Bay area pays a bit more than the land reclamation
costs for their area, they'd get paybacks later... How sure are you
that Mexico, or regions thereof, would accept provincialization?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Mexicans I think would
appreciate the substantial increase in living standard that comes
with UBI even if development doesn't materialize. Businesses there
will appreciate their customers being able to spend more, and as for
the sovereign power structure, tipping them off to buy up underwater
and other land, is a way for them to trade their current power for
money, and should bring them on board. Canada is also very well
regarded in the world for the very high contributions they made in
carbon capture and sequestration devices... A sacrifice Canadians
made that have rescued the world from climate catastrophe.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “OK. If UBI can work in
Alabama, it can work in every backward hellhole, right?”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “Ha. And the old politics of
sell high, create shitstorm, then buy low can always get around your
ideal direct-democratic structure.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
As we finalized our agreement,
including the specific “small bribe amount” I was to receive, and
the theatrical press leak timings and whatnot, I did an internal
check for how I felt ethically about this. I realized that neither
of us really needed each other very much in this plan. I could get
friends and family to buy land without Ron, and I can propose this
plan that helps Canada, Alabama and Mexico, also regardless of my or
Ron's land purchases. I also realized that this was essentially
Ron's surprisingly very liberal and progressive idea that was not
consistent with his family's historical political stances. Perhaps
progressive action requires demons to rally them?</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Me: “Ron, I actually think politics
have changed and are less corrupt than before. We just can't stop
some of us from knowing the future ahead of the rest. I guess
profiting from that knowledge is not exactly admirable. But, if
letting a few Mexican politicians know the future early is the only
way to grant Mexicans the freedom of Canada, then that isn't so...
corrupt.”
</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron: “You've convinced me too...
hahaha.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
The laugh unsettles me.</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<div style="margin-bottom: 0cm;">
Ron pours some drinks and hands me one.
He raises his glass and shouts “TO CANADA!”. I raise mine and
yell “TO ALABAMA!”. The door bursts open, and I yank my head
around to see my generobot there. It fixes its camera on Ron, and
lunges towards him. I yell “STOP PROGRAM” barely remembering the
security program I'd hacked in the parking lot... and fortunately I
react in time, and the generobot stops. I stumble through a non
explanation, and then we merrily talked drinking conversation
ignoring the incident completely for the rest of my short stay. </div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
“To
the start of a beautiful friendship.”</div>
<div style="margin-bottom: 0cm;">
<br />
</div>
<br />
<div style="margin-bottom: 0cm;">
<br />
</div>
Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com32tag:blogger.com,1999:blog-2467928492793719077.post-18000789629879899182018-02-17T18:07:00.000-08:002018-02-17T18:07:00.324-08:00Lightning Network Economics and business modelsThe <a href="https://lightning.network/lightning-network-summary.pdf" target="_blank">lightning network</a> (LN) is an off chain protocol that works with the cryptocurrencies bitcoin, litecoin, and bitcoin gold and others. Its not completely ready/deployed, but I think it will be successful.<br />
<br />
This paper assumes a high familiarity with the concept of LN. LN promises free instant direct payments, and cheap indirect/routed payments. There is more anonymity than blockchains as most information exchanged between 2 parties stays with the 2 parties rater than becomes public record.<br />
<br />
<b>Business use case 1: Settlement layer for exchanges/banks</b><br />
Bidirectional channels between exchanges allows them to conduct customer balance transfers free and instantly. This is of significant decongestion benefit to the main blockchain freeing up transaction space and lowering its fee level.<br />
<br />
<b>2. Customer to exchange channels</b><br />
Exchanges offer gateways between crypto and fiat, but also between the blockchain and LN. Closing LN channels is the means to transfer LN balances to the blockchain, but ideally, LN channels are never closed, because doing so closes a path for free and instant transactions and incurs blockchain fees.<br />
<br />
Customers having a LN channel between them and their exchanges allows them the opportunity to mitigate the risk of exchange hacking/seizure by providing a way to keep some of their crypto funds off exchanges, but with an instant and free method of putting it back on the exchange. They also gain the ability to load and unload LN funds with the blockchain without closing their channels by having the exchange convert the funds.<br />
<br />
More importantly, the customer channels provide a way for the exchange settlement (and customer) channels to rebalance: restore transactibility in both directions of the channels. ie. a more popular exchange having transfers with a less popular exchange is likely to have the interchange channel balances saturate in favour of the more popular exchange.<br />
<br />
<b>Rebalancing economics: popular vs unpopular exchange</b><br />
A popular exchange is defined as one where cryptocurrencies are deposited more, while an unpopular exchange is one where crypto is deposited less. A more popular exchange will eventually/quickly saturate (transfer capacity towards it being full) its direct settlement channel(s) with a less popular exchange and then also saturate the indirect channels (through customers of both). There are several ways for the unpopular exchange to restore LN capacity towards the popular exchange<br />
<ol>
<li>open new direct channels to the popular exchange committing blockchain funds(/fees) to do so. Or request that customer pay to open new capacity with it.</li>
<li>let the natural LN fee structure through indirect channels develop that would charge fees in the direction of the popular exchange while being free (theoretically even negative) in the unpopular direction.</li>
<li>A popular exchange where crypto is flowing is one where sellers are flowing in. It is likely/possible that the trading price would be pushed down compared to the unpopular exchange. LN's instant and free transfers towards the unpopular side would encourage channel rebalancing/deposits to the unpopular side.</li>
<li>An exchange can request to increase a customer or counterparty "bank" balance in exchange for a decrease in their channel's LN balance, so that the customer-unpopular LN channel can be restored to customer balance, while the popular-customer LN channel set to popular balance. Very likely that a sizeable fee is paid to the customer (and charged to the originating transferer) for this extreme LN routing assistance.</li>
</ol>
<div>
<b>Deposit account regulation</b></div>
<div>
Exchanges provide deposit/withdrawal services to their customers. They do so with a private ledger that (should) keeps some audit trail of user requests. It is not ideal that this audit trail is generated by supposed user clicks on their banking interface, and so not a truly verifiable audit trail.</div>
<div>
<br /></div>
<div>
An append only ledger as a form of blockchain is a verifiable audit trail. Where user requests are cryptographically signed requests a mechanically verifiable/regulatory judgement can be made if the "bank" is a legally identifiable entity, and if the customer (not required to have public identity) is able to provide a copy of the blockchain generated by the bank that disagrees with the calculated balance.</div>
<div>
<br /></div>
<div>
The LN network and clients is fundamentally a cryptographic communications channel used primarily to secure and transact money. LN clients including functionality to manage deposit accounts with nodes cryptographically signing requests and receiving/storing the "tx history blockchain". A "LN communications service" that helps the nodes be banks by providing them software and/or acting as an intermediary layer that helps clients manage their requests/blockchain copies. A inter/trans/exa-national "LN Regulatory service" can exist to handle "bank customer" appeals to impose retribution on legal entities to their customers.</div>
<div>
<br /></div>
<div>
but wait there's more ....</div>
<div>
<br /></div>
<div>
<b>3. LN channels as 3rd party deposit accounts</b></div>
<div>
A LN channel is a signed balance assignment by 2 parties (and 2 signatories). There is no limit however on the number of output accounts (extra balances) that the channel can hold. Simply that the 2 "real" parties agree on the balance assignment. So, providing deposit accounts within a channel is possible.</div>
<div>
<br /></div>
<div>
The external security/regulatory service mentioned in previous section is made stronger because when closing a LN channel through timelocks (doesn't apply to penalty version of LN) there is time for regulatory intervention, and bankruptcy/insolvency cannot be a defense because funds exist in the closing transaction.</div>
<div>
<br /></div>
<div>
While a 3rd party LN channel deposit account does not provide the depositor with perfect cryptographic security (secure if secrets not lost/stolen), it is better than a deposit account with a single institution because it requires 2 parties (both individually liable) to collude to steal the depositors funds.</div>
<div>
<br /></div>
<div>
A primary use for such deposit accounts is to accumulate "dust" (small amounts) in small increments to be paid later either through LN or the blockchain during closing transaction. Even if routed transactions are very cheap, when dealing in dust, even cheap can be expensive. There are no LN fees involved in requesting a channel to create a balance for you (though there may be channel fees). This allows the unbanked or unbitcoined to participate in LN without incurring the costs of opening their own channel(s). Depositors can move their balance upon request to any other channel accepting deposits or to their own controlled channel for cryptographic security.</div>
<div>
<br /></div>
<div>
A secondary, but almost as important, use of "LN bank accounts" is for channel rebalancing purposes. Moving deposits to other channels can free up directional capacity on the free'd channel. The moved depositor can even be compensated (along with channel owners) for being moved. This works the same as point 4 in rebalancing economics section.<br />
<br />
LN Channel "bank accounts" can be teleported accross the network without a routing path between channels. This improves rebalancing options for the network, and allows payments anywhere on the LN network without routing fees, though hosts may require fees if they have no economic relationship with the depositor.</div>
<div>
<br /></div>
<div>
<b>The elements needed for a robust economic network</b></div>
<div>
The use cases so far, seem to meet all of the preconditions for useful adoption and maintaining balanced payment capacity. Even onboarding anyone who can simply download a bitcoin wallet (without resorting to usual means of obtaining cryptocurrency). The key to all of the above is popular exchanges adopting LN. There are certainly more adoption reasons and network enhancement benefits listed below.</div>
<div>
<br /></div>
<div>
<b>Node quality</b></div>
<div>
A node just refers to an account/person. A high quality node is one that is highly available (monitors/responds to channels 24/7), has enduring attentiveness (will be responsive for many years), highly connected (has many quality channels), offers a useful service, and is a payment destination away from popular receiving nodes. The latter quality criteria is essential for channel rebalancing.</div>
<div>
<br /></div>
<div>
The highest quality node is an exchange service that you can use. The 2nd best node would be one that you might still see a purpose of potential trade with, but that trades in the opposite direction from the service channels that you (or the wider public) often trades with.</div>
<div>
<br /></div>
<div>
<b>4. Traditional commerce channels</b></div>
<div>
Stores and consumer services accepting LN channels for free instant payments should seem like a good idea for stores and customers. Once, accepting payments is seen as a good idea, LN remittances are also a good idea, as the flow to suppliers and employees can find their way to rebalancing customer channels.</div>
<div>
<br /></div>
<div>
Payment and remittance service are a good idea for those who don't want to manage any complexity or work in processing LN payments/remittances.</div>
<div>
<br />
<b>Security and risks in LN</b><br />
An LN wallet connected to a frequently used computer has the same malware risk as an online bitcoin node/wallet. Running the LN wallet on a single purpose low power computer may be a worthwhile precaution.<br />
<br />
In addition, a LN wallet that is rebalancing or routing transactions for others is making frequent updates that must be saved, and backed up to an encrypted cloud service or private network computer. Furthermore, to monitor your channel counterparties for potential cheating when offline, you need either an alert service that emails you, or confederates you trust enough to provide signed blockchain transaction copies to, and who will have their LN software always on in the future or can respond to their own alerts.<br />
<br />
In terms of counterparty cheating risk, the risk is much lower with a publicly known commercial entity because even with the 1 week+ time window available to respond to cheating attempts (by submitting proof, or truer transaction copy to blockchain), its possible to prove cheating even if you are too late for the blockchain update. Real identities of counterparties are strong insurance against cheating.<br />
<br /></div>
<div>
<b>Who would screw yew?</b></div>
<div>
In the section of node quality most people would fail. They would not want to keep consistent uptime. Most people would not have high bidirectional transactional volume, and are not already highly connected, or seen as potential trading partners for third party audience.<br />
<br />
Because of these reasons and the security issues with managing your own poorly connected node, a gateway service can be appealing to many.<br />
<br />
<b>5. LN Gateway service</b><br />
Opening a LN channel does not have to have a funding source controlled by the 2 counterparties owning that channel. A gateway service is like a deposit account bank but with the added feature that customers open/fund LN channels in its name with the counterparties they wish. Channel capacity funding customers of the gateway service may share in the fees generated by that channel capacity.<br />
<br />
The gateway service should be a publicly identifiable entity, and the audit chain tools mentioned in (3) LN banks should be employed. In addition to deposit account management audit trail, software should provide channel management commands that include delegation to gateway to maximize either convenience or fees.<br />
<br />
An even better security proposition for general users is to open a channel between 2 gateways, and keep their bank balance in that channel. From a security standpoint it requires collusion by the 2 gateways to steal customer/user funds. The gateways have direct channels to where the user needs/wants to spend, though this is likely to be charged fees to the user. Once the user balance decreases, the channel capacity between the gateways can be used to share fee income on that channel with the customer. If LN is being used by the customer to pay monthly bills, then in subsequent months, the customer can open channels from gateway(s) to payees in order to make use of those channels free for the customer.<br />
<br />
A note about the audit management software is that it should be free and open to provide a consistent and compatible interface for gateway services, and the interaction between dual gateways. One arrangement of channel/shared gateway customer bank balances is the customer has 2 accounts (to be consolidated in a cooperative channel close) where each balance deposit/withdrawal results in adjustment of each specifically assigned channel counterparty's balance.<br />
<br />
Operating a gateway service involves no investment by the operator in opening customer channels. For a user that is already committed to have high uptime and their own direct channels to popular services simply for the free/instant benefits and small fee income, starting a gateway operation is an opportunity for more income and better utility/interconnectedness that also enhances the LN's "userful decentralization". Useful decentralization refers to more highly connected hubs being obviously useful compared to fewer hubs. A solitary connected spoke being useless decentralization, and a moderately connected node, less useful decentralization. A new airport is almost always useful (and decentralized node of air network). A cul de sac without any homes or interesting destinations is useless to the road network, and if it has useful destinations, strains/congessts the feeding arteries without opening relief paths to other road network arteries.<br />
<br />
<b>Ideal LN channel balances</b><br />
The great majority of economic relationships are between sellers/buyers. Even banks/exchanges and even personal barter relationships have periods of consistently imbalanced transaction flow towards one side. So, all economic relationships at a point in time can be described as one of Net buyer/Net seller. In LN channel terms a net buyer is one that is sending their balance to the net seller.<br />
<br />
The ideal balance setting for a LN channel from both the buyer and seller's perspective is one tilted to the buyer, so that he's empowered to buy from the seller. This means that for transaction and routing purposes, the seller would never need to charge fees to the buyer to send in either direction. The buyer will want to charge fees to route towards the seller assuming he anticipates buying again. If he doesn't immediately value buying power, the buyer c/would charge fees for routing in the opposite direction as well. The seller would charge fees for routing to non customers... ie on its remittance or its non-business related channels.<br />
<br />
<b>Routing and rebalancing basics</b><br />
<br />
<ol>
<li>You cannot route or send LN txs if your total LN balance is 0</li>
<li>Though you cannot route txs if your total LN balance is full (equal to all channel sizes), one way to make it less full is to make a deposit to an exchange or bank</li>
<li>While a user might have preferred channel balances based on the spending propensity of channel partners on that channel, if all channels are to well connected nodes (gateways, merchants, exchanges), then it is always (at least usually) possible to spend the entire LN balance on one channel. ie. There is either a route departing every channel to your destination, or a rebalancing route towards hops on other routes that have multiple routes to your destination.</li>
<li>Therefore, for well connected channel partners a 50% balance setting is ideal as it allows the quickest bidirectional routing fulfillment, and provides the most rebalancing path options upon moving the first balance. When total LN balance is above or below 50% of total capacity, excesses or deficits should be moved towards lesser connected nodes. This is simpler than setting preferred target balances per channel. </li>
<li>To be a well connected node needs just a channel to 2 well connected nodes.</li>
<li>A node receiving more than it spends will either have to keep opening more channels to maintain routing capacity, or make bank/exchange deposits. An exchange receiving excess LN deposits that are not traded will need to aggressively open (or have opened for it) channels to keep incoming routing/spending paths open.</li>
</ol>
<br />
<br />
<b>Economics of opening LN channels</b><br />
Some sellers are monopolists that take a "fuck you pay me" attitude to their customers. Most sellers, though, are hungry for business. All LN participants should accept a channel opening request from any other participant when the offering participant agrees to pay all opening costs (fees paid to blockchain miners).<br />
<br />
A reasonable promotional proposition on behalf of sellers is to provide a customer credit equal to part or all of the costs in opening a LN channel between the buyer and seller. In fact, if the seller offers a 3% customer credit for opening the channel, he's offering the equivalent of the visa/mc fees that the seller would pay on the first channel balance paid by the customer. When opening a LN channel, the initial balance is set by the opener, and so for a merchant, offering 3% rebate for an immediate sale while gaining the benefits of a permanent LN channel.<br />
<br />
Exchanges and banks don't save payment processing fees when their clients deposit crypto. They are both ultra desirable nodes. In the case of exchanges, they are by definition always perfectly balanced in customers being sellers or buyers. Where customers are repeat traders, they should all want LN channels to their exchanges. The fee to open a channel may be 50% higher (not positive of this amount) than a one-off transaction, but it is profitable to have the channel after the 2nd transfer, and there is additional profit opportunity from fees from that channel. The gateway account option carries no additional security/operating costs compared to a personal wallet. Withdrawing from an exchange normally involves the customer paying the mining fee (+profit fee to exchange). For same fee, withdrawals should be preferred as LN channel openings, with subsequent withdrawals free.<br />
<br />
Exchanges (and other businesses) may still wish to offer LN channel opening bonuses above and beyond the single transaction processing fee savings as a competitive marketing promotion. So, in terms of user costs, many useful channels can be opened at no user costs compared to alternative payment schemes, while generating lifetime passive (your computer finds fees for you) fee income.<br />
<br />
<b>6. Opening LN channels for others</b><br />
When a merchant accepts a LN payment, he does not own bitcoin that he can spend anywhere but back to his channel partner, until the channel is closed (which can be initiated by either party) which defeats the purpose of opening the LN channel just for the one transaction. The normal buyer/seller financial relationship makes a balance tilted to the seller not useful.<br />
<br />
A buyer opening a channel between the merchant and a remittance or exchange partner of the merchant (and of the merchant's choosing) provides the merchant with bitcoin that they can immediately spend it instantly and without fees, along with a channel they can reap long term benefits from. If the channel is with an exchange, the merchant now has bitcoin which they can use to open a channel with a remittance partner. At time of 2nd purchase from buyer, they can open a direct channel between buyer and merchant (if first channel opened was with exchange). If the buyer has a channel with the same exchange as merchant, then there is a closed rebalancing path that allows all parties to reset trade balances in their preferred direction allowing for the buyer to spend to merchant and merchant immediately offloading to exchange. Even without setting up a direct channel between buyer and seller (for 2nd purchase), the buyer can pay the merchant again for free (small fee possible) either through his exchange balance or LN channel with the exchange, or for a small LN fee by routing through a LN path that goes through the exchange.<br />
<br />
Payment/remittance gateways for merchants through LN will be popular services just as user gateways, but improving the merchant or its gateway's spending connections will usually always be the most valuable connection for the merchant. If a business transacts everything through LN, then its revenue channels must carry the same volume as its remittance + profit (exchange/bank) channels. Making the first transaction with the merchant on their "outgoing" side is of greatest utility to the merchant.<br />
<br />
So, the discount/promotion offered to buyers in the previous section can be higher.<br />
<br />
<b>7. An electric utility settlement market</b><br />
Electric utilities and bitcoin miners should form special relationships. Bitcoin miners are heavy users of electricity and they may have more bitcoin than cash to pay their bills. Electric utilities that own their transmission lines often have to trade with neighbour utilities.<br />
<br />
Ultra High Voltage DC intercontinental transmission lines are one of the highest potential projects for humanity this century. It would allow solar electricity produced in the deserts of the world at a cost of under 2 cents today (and getting cheaper) to be transmitted halfway accross the world (where it is night) delivered at triple the cost (but still cheaper than local fossil production). Whether or not bitcoin can help fund the buildout of this infrastructure, using LN as an inter utility/national settlement network for electricity is something that can definitely be funded by bitcoin miners and other utility customers using the techniques in previous sections.<br />
<br />
An advantage to using the "global money" settlement network that is LN for electricity settlement is that it adds substantial global cyclical transaction bandwidth that concentrates in both directions with the sun, and disperses before the sun returns again. The electric settlement network can both borrow and lend capacity from the rest of LN.<br />
<br />
<b>channel factories</b><br />
<a href="https://www.tik.ee.ethz.ch/file/a20a865ce40d40c8f942cf206a7cba96/Scalable_Funding_Of_Blockchain_Micropayment_Networks%20(1).pdf" target="_blank">channel factories</a> are a means of setting multiparty channels where pairwise subchannels between each party are set up with the advantage of lower blockchain fees than independently opened channels, and creating a defacto gateway service with connections to all nodes owned by each party. The cost, however, is increased risk of one party becoming unresponsive, though there are "splice out" and "overlapping subgroup out" solutions to this that increases the size of the final commit transaction while waiting for unresponsive party to come back.<br />
<br />
<b>Faults with LN</b><br />
The current specification of LN uses penalty transactions. This makes "on channel 3rd party bank balances" not possible, and also makes channel factories and the following section(s)' features impossible. Only the 2 signatory parties can ever receive an output, because with penalty transactions only one remedy to an inaccuracy is possible.<br />
<br />
Other faults with LN 1.0 include tying up a minimum balance per channel recommended as 1%, using very small maximum channel (0.04 tokens) and transaction (0.004 tokens) sizes as a safeguard for bugs, and a dependence on mainchain miners setting a "congestion flag" on mined blocks that may potentially never allow a closed channel to unlock the balance of the closing party.<br />
<br />
For these reasons, LN 1.0 is more suitable to LTC and BTG than BTC (bitcoin). The main reason for a LN maturity delay for bitcoin are that the small channel sizes prevent much of the decongestion benefits to the main chain. Exchange channel openings may be 10 to 10000 times higher than they would need to be if there were no maximum size. Enabling merchant mini/micro transactions use cases are pro-congestion expanded uses for bitcoin, which are better suited until the decongesting appllications of LN/transaction channels are applied.<br />
<br />
The good news is that alternate payment channel structures are entirely compatible with LN 1.0 and drastically different payment channel structures still compatible. LN 1.0 gets the interchannel routing process right, and that is the only criteria for compatibility.<br />
<br />
<b>Escrow/Regulated 2 of 3 LN channels, is there a need?</b><br />
A 2 of 3 signature contract is typically used for escrow/arbitrated contracts where a 3rd party is able to intervene if the 2 principal contractees are unable to agree on the distribution. The risk of such a contract though is collusion between the arbiter and one of the parties. LN channels could be created with 2 of 3 signature requirements (instead of 2 of 2).<br />
<br />
A naive appeal of such channels is that it has the same connections as 3 channels for rebalancing and routing purposes, and only 2 of 3 people need to be online for rebalancing operations. Yet, a channel factory creating those 3 channels still meets the requirement that only 2 of 3 of the parties need be online for a route or trade to take place. It may also be possible to use a common routing to a 3rd party as an escrow service with 2 of 3 contracts within one/some of the channels.<br />
<br />
<b>8. Private blockchain enabler services for LN channels</b><br />
LN (or more accurately negotiated payment) channels have much higher potential uses than tracking just 2 balances, some of which have already been described in this paper. A LN channel private blockchain is described as an append only log managed by the 2 channel signatories. There are 2 attack vectors on "the log": Ommitting last few transactions or pruning the log to append to an older state. The easiest structure to guard against these abuses is a 2 of 3 signature channel where the 3rd party understands how to compute final balances from the specific private blockchain channel, and 2 of 3 channels between each of the channel main parties, the "regulator 3rd party", and a publicly identifiable, reputation at stake, 4th party "regulator of regulators". The main 3rd party provides the following functions:<br />
<br />
<ol>
<li>Acts as an oracle, such that a closing/consolidation of the blockchain between the 2 main parties obtains a closing signoff from the regulator effectively making the channel 3 of 3 signatures in the ideal.</li>
<li>Maintains a copy of the chain each time it is modified, receiving updates from any stakeholders.</li>
<li>Acts as a routing node to the chain preventing, or at least detecting, unfair blacklisting/refusal to include transactions from stakeholders.</li>
<li>Assists with closing a channel when 1 of the 2 parties is not responsive for a considerable time.</li>
</ol>
<br />
<br />
The 4th party (regulator of regulators) is there to receive complaints from blockchain stakeholders and with the assistance of the 3rd party, to make correcting offsets in the sidechannels (the 2 extra channels with parties 3 4 and each of 1 2) of the private blockchain. This assumes there is no 3 of 3 collusion (or 4 of 4). A reputational stake is essential for 4th party, and arguable for 3rd party. 3 party collusion is provable with a blockchain (each transaction signed by channel partners, and refers to previous transaction hash) that is longer or different than the computed chain. In 3 of 3 corruption/collusion, a remedy against the 3rd party is available if the 3rd party is monitoring other blockchains with 4th party as supervisor. The proof of corruption is sufficient to make a balance adjustment on other 2 of 3 chains that the 3rd party is member of. 2 of 3 collusion is fixable within the channel groups set up with original chain.<br />
<br />
The required stake of the 3rd party in the sidechannels would go down with the more channels they supervise.<br />
<br />
<b>Features and benefits of private settlement chain administered private payment (LN) channels</b><br />
The features of private LN settlement chains are unlimited including handling other assets/balances that settle on multiple blockchains. But they also must include the core LN functions of deposit/withdraw/move/route funds.<br />
<br />
Benefits include:<br />
<br />
<ol>
<li>Only the partner side(s) reducing their balance must be online to sign the transaction in addition to the original stakeholder (spender).</li>
<li>Final closing blockchain transaction is the simplest possible consisting of spend of original channel funds. So, lowest bitcoin fee possible.</li>
<li>Allows true 0 fee micro/nano transactions. For example a channel between advertiser and web site that shares pageview/click revenue with browsers.</li>
<li>upon channel closing, allows moving balances too small to be included on blockchain to the associated side channels.</li>
<li>Can reset channels without closing them by moving 3rd party ("customer") balances elsewhere. Or generating periodic external (non btc) blockchain transaction posts without closing the LN channel/posting to bitcoin blockchain.</li>
<li>Cloud computing, cloud storage, smart contract "sidechains", micro power generation are all suitable "micro revenue" models administered by a pair of service-offering and a domain partner.</li>
<li>Feeless micropayments are best implemented as a channel between payer and a micropayment aggregator service, though these also work if aggregator is a LN hub connected to payees, private settlement chains allow payees to accumulate funds prior to seeing benefits of opening a channel.</li>
<li>cross chain balance transfers are LN transfers.</li>
<li>Transformation of LN network as a cryptographic communications and routing platform that includes services such as offline (email) storing/routing of communications, content publishing, and micropayments for those services without LN channel creation, but with LN channel settlement (3rd or 4th layer "blockchain") allows an infrastructure supporting nanopayments with much higher throughput and lower fee friction than other methods.</li>
<li>The pitfalls of LN channels: guarding against cheating, inconvenience of online status of counterparty, minimum balances, are significantly mitigated by a "usually-on" 3rd party. </li>
</ol>
<div>
An important glossed over concept in the above is the distinction between nano-revenue (payments usually by business to thousands or millions of individuals) and nano-payments (payments by individuals for services). Individuals should have one "LN" channel with a nano-payment hub that also allows for settlement with their micro-revenue balances. Businesses accumulating micro payments can also settle/consolidate amounts from multiple "hub channels".</div>
<br />
<b>The economics of closing channels</b><br />
LN/Transactional channels are revenue generating assets. Closing them is destroying that asset, and incurs a blockchain fee. The LN 1.0 specification is defective in not formalizing the most useful fee allocation scheme to disincentivize closing channels:<br />
<br />
<ol>
<li> On cooperative closing, fees paid should be proportional to balance of each party.</li>
<li> On unilateral closing, the closer should pay (most of?) the fee. Asymetric transaction balance states should be used to account for this.</li>
</ol>
<div>
<b>Economics of channel fees</b></div>
<div>
These will be broken down by type of node. The primary concern is return on channel opening costs. Often, though the opening costs are paid by just one of the parties, even when they benefit both. LN fees generated are based on a small fixed fee and a percentage of the transaction value. How often a route gets used determines the ROI for the channel. Pressure to make the fees low include the alternatives to routing through your node are:</div>
<div>
<ol>
<li>An on chain transaction: since it has fixed fees independent of the transaction amount, the average routing channel fee will limit the threshold for which a LN tx is a viable alternative to an on chain tx. </li>
<li>A direct LN channel: about the same cost as a mainchain tx, but with long term revenue potential. This limits average routing fee levels both in terms of frequency of transactions for the economic relationship of the ultimate 2 parties, and if too high, further incentivizes creating channels with infrequent natural trading partners (but high routing volume) for the high ROI of routing transactions for others.</li>
</ol>
<div>
Of note, LN transactions are cheaper the higher the price of bitcoin. Transaction prices are measured in fiat equivalents, and so a % of transaction amount is smaller the smaller the amount of crypto is transacted (though % measured in fiat is constant). A given channel capacity generates more fiat-equiavalent-fees the higher the value of the crypto.</div>
</div>
<div>
<br /></div>
<div>
with a 0.16 max btc channel, 0.04 max btc transaction, 5000 satoshi channel opening cost, then a LN fee of 1 satoshi + 1/10000th of value (what I understand to be defaults)</div>
<div>
<ol>
<li>with price at $10000/btc: a $400 transaction costs 4.01c, a $4 transaction costs 0.05c. a $0.04 transaction costs 0.0104c.</li>
<li>with price at $1M/btc: a $400 transaction costs 5c, a $4 transaction costs 1.04c. a $0.04 transaction costs 1.0004c. A $40k transaction costs $4.01</li>
<li>in satoshis, transacting(routing) the max btc transaction on LN earns 401 satoshis.</li>
</ol>
</div>
<div>
These returns can be potentially very high if transaction volume is high, and/or if the channel opening was inherently a substitute for a payment that needed to be made anyway. Note that the main barrier to nano transactions in the above is the 1 satoshi fixed transaction fee component. LN 1.0 allows setting it 1000 times lower, which even at $1M/btc, would bring a 4c transaction fee down to 0.00014c, and feasibly allow 0.01c transactions and comfortably 0.1c transactions.</div>
<div>
<br /></div>
<div>
<b>Economics of rebalancing transactions</b></div>
<br />
Rebalancing transactions c/should be free of fees. Every channel has a natural economic usefulness balance (more useful to net spender to have net balance), and a desire for nodes to increase the balances in their spending channels and decrease them in receiving channels.<br />
<br />
0 fees for transactions in a certain direction is probably sufficient to get regular rebalancing to occur. If a network of 0 fee routes exist then rebalancing will be easy. The incentive to participate in 0 fee directions is to give your "customers" the power to buy from you. Yet if I have a channel with coinbase that I usually fund from, my other channels could still potentially use me as a route to pay coinbase, and so unless I have an immediate need to withdraw funds from my coinbase account, I can set fees to transfer in the counter-economic direction to just be low enough that a route through me is likely to be used eventually. Until I need to withdraw from coinbase, I don't need to set fees in other direction to 0 to facilitate that.<br />
<br />
An important feature needed on LN is the ability to set fees for setting a balance to the halfway point (likely lower) compared to fees for spending over the halfway balance point. A halfway balance allows earning fees in 2 directions for routing as well as providing direct spending flexibility.<br />
<br />
<b>Economics of LN fees for exchange/bank nodes</b><br />
As a competitive advantage/service and to promote LN health, exchanges/banks might set transmission fees on channels with their customers to 0. Since exchanges are likely to be the most well connected nodes, and they offer the ability to set LN balances to any point through customer account balance changes, they offer high availability short routes from most point As to most point Bs.<br />
<br />
Customers of an exchange will thus be able to set their fees for transmitting towards the exchange to 3-10 times the "standard fee level" because going through theses channels is likely to be shorter and higher-available path than alternative routes. This further incentivizes creating channels with exchanges even without customer relationships with the exchanges.<br />
<br />
<b>Economics of merchant LN fees</b><br />
A merchant is a (likely highly connected) node with overwhelming balances on its customer channels in its favour. Even if it is able to get a significant portion of its employees and suppliers on LN payment channels, a profitable merchant will have an overwhelming channel balance in its favour, and the need to funnel the excess balance to an exchange/bank.<br />
<br />
A merchant customer that is also highly connected with spending capacity on routes towards exchanges is highly valuabable to a merchant, because it gives it a path to spend its LN balance towards something useful to it, while freeing "return capacity" for any customer that has a route to the exchange, and likely willing to pay any reasonable fee to use that route.<br />
<br />
Merchants are also likely to offer negative channel fees in the direction of their customers, thereby enabling payments from exchanges to those customers to route through them cheaper than any free or direct path between the exchange and that customer, and allowing the merchant to increase its balance with the exchange in an immediate subsequent transaction.<br />
<br />
For this reason, having channels to merchants is a highly profitable option for any node connected to popular exchanges. Negative fees on the merchant side allows for higher fees on channels that could be destinations of either the merchant or its channel partners. It also further incentivizes employees/suppliers to obtain LN channels with the merchant because they can have relatively high fees in both directions and capture high trade volume on their channels.<br />
<br />
Earlier in the paper, I mentioned the option for a customer to pay a merchant invoice by creating a channel between it and a supplier. The value of that option involves creating value for 2 parties and so is difficult for the channel creator to capture remuneration from both sides of that channel.<br />
<br />
If a customer already has spending channel capacity with a merchant's supplier, for instance an exchange, then there are 2 options to funding a channel between the merchant and exchange.<br />
<br />
<ol>
<li>Pay the merchant invoice through free routing through the exchange assuming the merchant already has such a channel, and its spending capacity is nearly always tilted to the exchange. The customer captures no value from this option, other than a free transaction, and may find the effects of depleting his exchange balance to be negative.</li>
<li>Create a direct channel with merchant, and set routing fees to exchange to 30x "standard levels" and routing fees to other nodes to 5x-10x standard levels if the customer prefers those channel balances to be depleted. 30x standard can be 0.3% of transaction. The value to the customer is a long term profitability of a high volume route to a merchant, and the "double fees" of the return path from the merchant to an exchange or suppliers.</li>
</ol>
<br />
<br />
An important LN feature (needed rather than existing) is the ability to chain transactions and chain routing. If a customer has a $50 channel with a merchant but $1600 spending capacity to an exchange that the merchant is happy to dump all proceeds to, then the customer can spend or route $1600 in chunks, where each chunk results in a chained transactions in the reverse direction and routed to the exchange, freeing up pending capacity for the next chunk. Being able to advertise $1600 spending capacity to the merchant as a routing option is important to facilitating large transactions (and large fees paid by merchant). A "chained route back" setting can travel backwards for multiple hops on a route permitting large transactions through small channels and/or small direct routing capacity on those channels. Its also a component to permitting payments of an invoice through multiple routes.<br />
<br />
<b>Economics of paying fees instead of generating fee producing assets</b><br />
For those who receive a lot of LN payments, respending those through any available route by paying fees can be preferable to spending mainchain bitcoin they may not have to create new channels.<br />
<br />
In the example of creating a channel with a merchant for payment, the creator can "capture" the merchant by setting high fees to any route the merchant would use to spend those funds. The customer can also setup a channel with the merchant's employee, and capture the employee's use of funds on that channel too. Setup channels with the employees landlord and credit card payment processor to capture those channels.<br />
<br />
Note that the value of these channels to the "customer's" partners only exists if the customer keeps spending power above 0 on some of his LN channels. Otherwise there is no routing possibility, and spending the balance only exists for inherent services provided by the channel partner.<br />
<br />
When accepting a channel from a random source, the value of that channel to the recipient can be negative if the recipient incurs any closing fee costs, and spending the funds through LN is either impossible due to all 0 balances of partner, or the fees for spending through LN are higher than closing the channel and spending the funds through alternate means.<br />
<br />
Even if fees are 1% or 2% to spend through a route, this can be more attractive than alternative ways to spend/take the LN channel balance, yet there is a tremendous difference in the value of a channel when your partner has high balances and an eagerness (low fees) to spend them compared to a partner with low balances and high fees to route through them.<br />
<br />
<b>Economics of being a LN hub</b><br />
A hub is defined here as being a node that spends mainnet bitcoin to create channels, and that has little to no natural economic receipts for btc/LN payments. If the hub can consider natural spending options, then over time, their balance in useful channel directions will tend to 0.<br />
<br />
A hub with no economic value is a poor choice to pay (use mainchain btc) to create a channel with. Destinations that you might route to (especially if they are net recipients of LN payments or at least have high bidirectional volume) are always better choices, because you can capture your partner's spending on that channel instead of being potentially extorted yourself in fees.<br />
<br />
An important needed feature for LN is an ability to query (or for a node to publish voluntarily/verifiably) a node/hub's connections, spending capacity, channel addition rate, and fee levels on its channels. A node's natural revenue rate is also valuable, but less important than the former list. Doing so can provide a single number estimate of the potential value of that node as a trading partner, and from that single number, a merchant discount/service credit can be calculated, or the general advice of not connecting to a hub can be ignored, or connections to hubs with the highest index score can be pursued.<br />
<br />
Still, positive hub metrics are likely temporary. A node could/will eventually stop creating useful channel routes. <br />
<br />
A "good hub" has a channel with an exchange and a merchant. An important LN needed feature is the ability to discriminate on fees based on the source. The most important spending balance to maintain is one towards exchanges. So fees routed from an exchange being lower than the standard charged to "captured" channel partners, can allow for high transaction volume flowing to "your captured merchant" (from a customer routed through exchange), and then high fees on the return path from merchant to exchange.<br />
<br />
A routing segment needs to be understood as 2 channels connected to a node. And fees set based on the 2 affected balances for the node, and the perceived value of the combined effected balances from the node's perspective.<br />
<br />
Connecting to other "good hubs", and generally having (mutually not needed) low fees for routing to the other hub allows you to "dump balance" towards the other hub while increasing your other balances, and increasing your overall transaction volume/paths towards your captured high fee return routes.<br />
<br />
Basically, if any funds routed to a merchant always get immediately routed back through you to an exchange at 2% fee, then huge potential profits are realizable by even offering slightly negative fees for routing funds to the merchant in order to boost volumes.<br />
<br />
An essential LN tool to help merchants mitigate their capture would be a variable customer discount based on the route chosen to pay them, that gets factored into choosing the best route by the customer. For example, a base LN discount of 3% could be offered to all customers (VISA alternative reference), but this discount is adjusted down based on the routing fees the merchant must pay to spend those funds where it wants to (exchange most likely). This would mitigate the "extortion" of merchants to "market levels". <br />
<br />
Though, "chained route back" and "extortion" are mitigated by using routes that go through exchange directly to merchant, and then "chained back" as merchant deposits on exchange provides low fee preferred value to customer and merchant, the value of hubs becomes using alternate balances than a customer's exchange balance, and rebalancing alternatives. Hubs/customers also onboard merchants and their LN capacity.<br />
<br />
Despite the above, a "good hub" can simply be a channel to an exchange. If the expected centralization occurs, there are still paths to every useful destination, and the exchanges adoption of LN can be motivated by other business models than LN transaction profit (pressuring fees down). LN and hubs become a mutual check on exchange merchant services extortion. LN channels can be profitable without extortion power and priced below current crypto merchant service fees.<br />
<br />
<b>Economics for the marginal LN participant</b><br />
The marginal LN participant is one who is unlikely to be enthusiastic to run a node, and unlikely to own bitcoin. But it is someone who someone else wants to pay through LN. The merchant's employee in previous sections may make a typical example.<br />
<br />
Onramping these people is best done through exchange accounts. It avoids the extortion capture of previous solutions, and an exchange account is a jumping pad towards forming new LN channels if the user wishes to adopt LN's security model (security from exchange's risks/policies), transactibility and revenue generating features while choosing bitcoin as an investment/savings vehicle.<br />
<br />
LN, even with 1.0, facilitates "mini payments" ($1- $8) which allows new digital business/transaction models at scale greater than VISA, both regulated and unregulated, with a standard way to enhance any exchange's merchant services by opening up those who can transact freely with it.<br />
<br />
<b>Centralization concerns</b><br />
By describing a network topology that economically rewards channels with exchanges and popular payment recipients suggests a highly centralized LN world. Some people wish for decentralization. LN is a decentralizing force permitting permissionless payment channels (structural relationships). It incubates many services to facilitate access to the network (including launching new competing exchanges and other highly connected hub services), eventually applications including blockchains currently implemented as separate tokens, and eventually the web protocol itself will be updated to support payment channels.<br />
<br />
Where centralization is an objectively undesirable risk is the risk of an attack on key hubs/exchanges harms the whole network. Redundancy is valuable in of itself. Exchanges successful in being a highly centralized focus of the network, are likely to seek LN fees instead of relying only on main service fees. A cure for centralization is centralization, motivating alternate path creation.<br />
<br />
<b>Privacy and regulation concerns</b><br />
An open LN network provides advantages of discoverability and enhanced trust from identity-based relationships. The LN protocol itself leverages the privacy infrastructure of the TOR network, and privacy-first approach is built in, though deanonymizing of bitcoin addresses and LN nodes is likely (and easier with centralization). Open portions of the network can and should exist if only to satisfy the needs of those transacting with the official economy and financial system. Nodes can act as bridges between open and dark LN paths, as well as bridges across currency tokens.<br />
<br />
<b>Estimating value of a channel</b><br />
Projecting a 6 month payback on channel opening costs seems like a sufficient incentive to justify opening that channel. When opening a channel replaces a mainchain transaction that payback can be almost immediate. At 1/10000th transaction fee and 5000 satoshi channel opening cost, payback occurs after 50M satoshis (0.5btc). Over 6 months, that is 300k satoshis/day in transaction volume, or a single transaction worth of saved fees.<br />
<br />
Transaction volume processed increases the more channels one has. Many people will respond positively to the binary decision of opening channels to many destinations.</div>
Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com16tag:blogger.com,1999:blog-2467928492793719077.post-76128799130027556212017-12-22T10:46:00.000-08:002017-12-22T10:46:39.386-08:00Bitcoin is worth more than goldThe value of an asset class is measured by the unit price times the total supply of units. For bitcoin at current prices it is known to the penny ($313B when $18730/btc). For gold, the total above ground supply is estimated as 187200 tonnes ($7.6T @ $1250/troy oz.). Of this, $1.63T is the value of the gold private investment sector. $1.28T is held in central banks. $3.62T is held as jewelry. Another $2.43T is held under ground.<br />
<br />
<b>Why is price of bitcoin less than gold if it is worth more?</b><br />
First, what makes it worth more than gold is that there is no investment reason to choose gold over bitcoin even when their values will match. But to answer the question, it takes time for prices to adjust. Many people have ended up with 90% of their wealth in bitcoin, and even if they understand that its worth much more than its current price, some diversification, debt paydown, and life changing spending all contribute to supply meeting the adoption demand. More importantly, bitcoin supply is currently growing by 4% (gold is only 2%), and miners need to take some profit to pay for electricity and equipment.<br />
<br />
Also, the complaint that many people are rushing into bitcoin for fear of missing out, actually serves to reduce the volatility of the price, and slow down its price rise. Most in this group who do not understand bitcoin are happy to get 20% return in a week, and then wait/hope that the price comes back down.<br />
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The fear spreading by financial industry deadenders that bitcoin price has risen too quickly can be motivated by hope of buying at a lower price, but its false on several counts. First, when looking at a parabolic chart it is not appropriate to compare it to stocks (or NASDAQ tech indexes in late 90s), but instead to technology adoption curves.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="http://i.imgur.com/UbsADfW.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://i.imgur.com/UbsADfW.gif" data-original-height="336" data-original-width="800" height="268" width="640" /></a></div>
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Not listed on this chart is the deregulation of stock brokerages in the 1980s that <a href="http://www.businessinsider.com/historical-trading-commissions-2014-3" target="_blank">allowed self-directed brokerages and lowered trading costs by 90% and increased trading volume by 2500%</a> (just by 2004). This democratized stock investment to attract people with much smaller wealth levels. More wrongly than rightly, this allowed exhuberance in penny stocks with players having a few thousand dollars hoping to reach life changing goals with it. Bitcoin as an investment has the powerful advantage of having large and small investors in the same asset, as opposed to segregating worst scams for small investors than lesser scams for large. Most ICOs and many alternate cryptocurrencies are unfinished projects that include a portion of coins for management and marketing, and so not only lack the fairness of bitcoin, but the financial industry's mantra of "blockchain not bitcoin" is one of forming the same bribery promotion agreements for other projects. The ICO markets are more prone to overhype and fraud than is bitcoin, and may lure in the smaller less sophisticated investor.<br />
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A little known key adoption metric is that <a href="http://markets.businessinsider.com/currencies/news/daily-cryptocurrency-volumes-vs-stock-market-volumes-2017-12-1011680451" target="_blank">daily crytocurrency trading volume has surpassed that of the NYSE</a>. Crypto trading is also for 7 days/week not just 5.<br />
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<b>The intrinsic investment value of gold and bitcoin</b><br />
At their core, both have value because they are expensive to mine. Gold keeps its value (after inflation) because the mining expense mostly goes up with energy and labour inflation. Bitcoin's mining expense goes up every 2 weeks (20% over last block period), and every 4 years, doubles in cost with a halvening-reward event. Bitcoin will have a natural tendency to keep increasing in price due to the human nature of trading: Miners being predisposed to accept only prices higher than their cost (and even if out of desperation they'd violate the rule, they would stop producing), and buyers accepting that a reasonable and fair offer should consider those costs. Once you are willing to accept that a mathematically formulated number is worth more than a penny or a dollar, there's no longer that argument that it should be worth less than a trillion. You can't wear either price's "object" around your neck.<br />
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Other reasons that gold price upside is limited is that as price increases, more supply expanding mining ventures are made, and people with jewelry "cash it in" to also contribute to supply increases. Even central banks can be net sellers of gold (2016 world bank reserves were 5500 tons below 1965 levels). They don't yet have bitcoin to sell... only to buy.<br />
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<b>The historical case for 10% of wealth in gold</b><br />
Gold as part of a portfolio offers diversification benefits to stocks and bonds in that the latter's value are highly dependent on strong banks that do not require to withdraw from their client-frontrunned positions to bail out the relatively frequent failures of one of their other scams. Weak banks can't keep funneling money too prop up the two main financial markets, and they tend to be net sellers of gold (to clients) as they usually seek holdings opportunities for earning interest or fees.<br />
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Similar to financial panics, gold is insurance against government failures/panics related or not to financial system failures. This broadly affects banks, housing, and business throughout a nation, and gold at least goes down much less than the other asset categories, and if the problem occurs in a relatively unimportant far away land, gold will usually go up as it is demanded by those affected.<br />
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Gold is insurance against war and uninsurable housing destruction. War is usually a much worse form of panic than simple government financial collapse. Gold tends to go up in value due to demand for it being the only form of wealth in the area affected.<br />
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Gold is insurance against official asset seizure/freeze. You might be able to escape bankruptcy or governments without there being an official trace of holdings.<br />
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The 10% of portfolio in gold advice is admittedly much higher than the 0.6% of global wealth in private investment gold sector. It is also advice that is based/suitable for people highly concerned with preserving wealth as opposed to reaching for expected returns under the best case optimistic future scenarios. The rationality line that separates these 2 groups is whether they consider themselves already rich. For the latter group, lottery tickets are better investment choices than gold which is appropriate for reducing wealth variance over the broadest range of scenarios.<br />
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<b>Bitcoin is a better investment than gold because</b><br />
<br />
<ol>
<li>It will go up in value in nearly all eventualities, including the eventualities that would propel gold's value. Any eventuality that is good for gold is even better for bitcoin. The new supply rate for bitcoin will drop to 2% 1% 0.5% 0.25% on years 2020 2024 2028 2032.</li>
<li>There is an estimated 4M bitcoins that has been lost foreever. Gold is always recyclable (cost permitting, but technology can always open options) or findable again when it is lost. The above supply growth rates do not take account of bitcoins lost due to death or innadequate backup procedures. Global available supply may thus decrease within 6 years, even as adoption demand continues to increase.</li>
<li>Technological improvements in bitcoin that permit widespread currency/transactibility applications and enhancements are likely. Not possible for gold.</li>
<li>Currency use is unimportant for value as long as you can "annuitize" your holdings. Converting a small amount to fiat monthly to cover needs. This is much easier with bitcoin than gold, and carries less fees/slippage and time costs. Holding an asset that goes up significantly may not even decrease its remaining balance month to month. Debit card products for some cryptos are also effective at "conversion on spend" transactions.</li>
<li>Security/storage is cheaper and more effective, though it does require understanding good/best practices. Its also more portable. 100 pounds of gold is worth under $2M. You can have an unlimited amount of bitcoin on your phone.</li>
<li>Both gold and bitcoin are better holdings than fiat, when fiat has negative nominal or real interest effects to holding them. There is a good case for bitcoin being a better holding than long term government bonds. The lower the interest rate, the better the case. But also, where a high interest rate indicates default risk, that too is a good case.</li>
<li>The advantages to personal investment are the same as reasons central banks should have bitcoin in reserve. The most important being #1 (they will go up). In the event of war or catastrophe, a state can pay soldiers or other payroll/social support in bitcoin. Gold can be a liability for war, and historically has served as motivation for invasions. Iraq had 6 tonnes of gold reserves in 2003. Bitcoin is more flexible and with more long term value than holding individual nations' fiat as reserves. </li>
<li>Gold has been banned by governments including laws against hoarding in the US. Transporting cash or gold even within the US is subject to confiscation, but even more opportunities exist to do so at the border. The transportability feature of bitcoin is especially useful for oligarchs and heads of state that may be vulnerable to revolution or international persecution/war.</li>
<li>Every other reason than #1, increases the expected value appreciation of bitcoin relative to gold, and so strengthens reason #1 which is the only necessary reason to choose bitcoin over gold.</li>
</ol>
<div>
<b>Currency value of bitcoin</b></div>
<div>
While already substantially higher than gold's ability to be used for purchases, and likely to improve, bitcoin has the significant current purchase utility of being able to buy/trade other digital assets and crypto currencies. Alternative currencies have short term or speculative cases/stories that may create an expectation of higher value increase than bitcoin. Bitcoin having a market value about equal to all other crypto assets combined , and having the highest trade volume provides liquidity and safe haven stability during market turmoil.</div>
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<div>
As bitcoin grows even more in value and trade volume it permits trade in digitized/blockchained higher value asset categories such as commodities and companies. Amazon stock cannot be used as currency for purchases on Amazon (until it is blockchained, that is), yet there is still a value proposition for owning Amazon stock independently of its direct purchase power.</div>
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Several governments are planning their own digital currencies. These will make great transactional mediums and retain value very close to the underlying fiat. Goods and services will be priced in them. It will be good for bitcoin in that it will create an onramp from the banking system to direct acquisition. Some will prefer bitcoin holding to cash equivalents or to Amazon stock.</div>
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<div>
<b>Bitcoin has greater value or safety than competing crypto currencies</b></div>
<div>
<ul>
<li>Bitcoin was fairly distributed, with the very first miner(s) either losing, abandoning their coins, or potentially waiting to apply them to a large scale philanthropic goal. There is legitimacy attached to being first as compared to what are mostly copies of it. Alternate coins have had either pre-mines and/or pre-sales (with proceeds going to preminers) that provide insider benefits. ETH has an undefined supply limit, and is focusing on utility rather than value. </li>
<li>Bitcoin has the most studied and most certain cryptographic/economic soundness compared to newer claims of smaller projects.</li>
<li>Bitcoin has a decentralized governance process. Coins with premines or backed by large holders have centralized governance. Governance decisions will benefit the governors. With centralized development controlled by the governors, for instance, a decision to expand the supply beyond the publicized limit in order to further incentivize development (possibly due to missed timelines) is a power that centralized developers could inflict on their community as leverage over the communitiy's dependence on them. There is never a reason to buy a coin based on the reputation of its team/investors. That reputation is currency to fuel scam.</li>
<li>Bitcoin has the highest mining costs and fees. This is the single most important factor in protecting the value (preventing cheating) of the chain. This makes the chain safer for receiving large transactions. Low/no mining fee coins may lack incentives to sustain the chain under low activity or when its size increases greatly.</li>
<li>The highest valuation and trade volume makes it most suitable for the largest transactions, and wealthy players participating in the investment value. Circularly, bitcoin should make up the largest portion of the largest portfolios for its liquidity benefit.</li>
<li>The suitability of bitcoin as the trading counterpart to other crypto (because its the largest and most liquid) makes bitcoin a safety destination when there is market turmoil, and so the safest crypto currency. If any alt-coins or ICOs are scams, then their temporary value is a spring waiting to be dumped into bitcoin.</li>
<li>The high and rapidly growing cost of creating bitcoin means it has clear intrinsic value independent of its ease of transactibility or adoption. Though the network effects of having heard of it, knowing how to receive it, or being able to send it do increase its utility and value.</li>
<li>The forks of bitcoin (copies that act as a dividend to bitcoin holders) create scaling capacity indirectly (and low fee transactable units) and provide bonus advantages to holding bitcoin.</li>
<li>If a competing crypto currency is successful because of a well implemented feature, then a new fork of bitcoin that copies that feature will reward bitcoin holders who bother to collect the new fork's value. Bitcoin's widest adoption level would permit the fork to leverage the desirable feature more thoroughly than its innovator. The ecosystem of transactibility services for bitcoin has a naturally easier time including support for one of its forks than a different coin.</li>
</ul>
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</div>
<div>
<b>Risk of government attack on bitcoin</b></div>
<div>
Though a concern and something lobbied for by those scared of bitcoin, the risk may be overblown.</div>
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<div>
Stock exchanges and inter-bank remittance/settlement services are not big enough to own the politicians needed to counteract the large bank owned politicians to serve large bank's opportunities in wealth management, ICO marketing, and internal efficiencies from replacing those external services that fear blockchains the most.</div>
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<div>
There is an established infrastructure for dealing bitcoin off exchanges. The advanced peer to peer cash network in China makes it especially easy there. There would be rapid improvement to decentralized exchange technology that exists already, if the KYC/AML regulated exchanges were attacked.</div>
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<div>
Driving bitcoin underground would not successfully kill it, and in fact, any concerns for money laundering, terrorism financing or other stupidity a bought politician expresses as motivation for attack is increased by driving trade away from tracked and semi-regulated exchanges.</div>
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<div>
Fear of state/bank bans of crypto currencies is reason to buy in now. Similar to fear of gun regulations. Crypto to crytpo trading is much harder to prevent/control than the fiat gateways into the space. Bitcoin (and drugs) is worth more in locations where capital controls exist or its access is persecuted.</div>
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<div>
Russia is launching the cryptoruble. Venezuella a Petro (asset) backed crypto currency. France has authorized blockchains for trading securities as a fintech positioning measure. Japan has taken a leading/enabling policy position on fintech/bitcoin. For any government crypto fiat to be useful/have value, it must be free of capital controls and exchangeable for bitcoin or alts. If the only fiat window into crypto is the Ruble or DPRK yuan, then those fiats will be used on the web and throughout world economies even if the only road back to fiat involves an intermediary from that country. Any one state attack against crypto currencies is an isolationist and economically deprecating/supressing move that benefits those competing societies that adopt/embrace crypto. </div>
<div>
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<div>
Deceitful bankster fuckfaces that call bitcoin a fraud, while being directly implicated in fraud findings, and promoting blockchain initiatives that are far more likely to be fraudulent insider rewards vehicles can't really do that. You cannot be pro blockchain and anti bitcoin when bitcoin is the most decentralized blockchain that is free from unfair allocations of tokens.</div>
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<div>
<b>Catalysts for futher increase in bitcoin's value</b></div>
<div>
<ol>
<li>Continued adoption as an investment consideration, and money inflows.</li>
<li>Technology that lowers fees per transaction, eases decentralized trade, creates instant settlement channels, and sidechains with new features.</li>
<li>Crypto debit cards and web payment cart options being more widespread. Rents and taxes payable through web interfaces with banking independent options.</li>
<li>Other applications of technology or adoption improvements include exchanges acting as a low fee banking/settlement network that provides an off chain (or lighting network) visa+ scale commerce platform. </li>
<li>ETFs on major stock markets that hold/buy bitcoin.</li>
<li>China (and minor countries) unbanning cryptos again.</li>
<li>Central bank reserves and corporate long term asset holdings.</li>
<li>Banking system integration and custody/payment services.</li>
<li>Recognition that bitcoin is a more suitable investment than bonds or stocks up to 50% of a portfolio.</li>
<li>Even after all of the above adoption points/levels mature and level off, price will continue to increase above and beyond fiat inflation as part of the 4 year new supply halvings, and associated increased mining costs.</li>
</ol>
</div>
<div>
<br /></div>
<div>
<b>Next Price level threshold @17M bitcoins: $1.63T = $95.8k/btc</b></div>
<div>
$1.63T is the value capitalization of gold private investment. The logic for this valuation threshold is simply that if bitcoin is a better personal store of value than gold, then it is stupid not to make that choice, and so eventually all who made the wrong choice will move to the correct choice. This doesn't imply that the entirety of the value is made up of "store of value private investment" purposes, but rather that this amount is a floor... a component of the total value. But the number itself is a key milestone.</div>
<div>
<br /></div>
<div>
<b>Unlocking further value increase thresholds</b></div>
<div>
Central banks have gold reserves only because there is a private investment market for gold. They, or the potential parties it would transfer to, are uninterested in opportunities for supplying the jewelry industry as a reason to hold gold. The central banks assess the value of their gold reserves based on the private market price settlements.</div>
<div>
<br /></div>
<div>
Once bitcoin's market value reaches the above "gold private investment value" threshold, it becomes stupid for central banks to hold gold instead of the cheaper to secure, easier/faster more liquid to transact, and perpetually-value-increasing bitcoin. $1.28T in "physical" reserves switching to bitcoin would add another $75k/btc ($170k/btc totalling above 2 "floors"). Further, the slower any one central bank is in adopting bitcoin as reserves, the higher price it will pay to join the club.</div>
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<div>
I suggest again that this is a "floor" component value based on the interaction of private and state investment consensus value. I'm reluctant to quantify any competitive interaction between these 2 groups, but if bitcoin is worth more/is better than gold, then I'd expect that both of these groups would demand more of it. If bitcoin's price is only $170k/btc, then close to 8M coins are to be taken out of private investment circulation (for central bank use). This competition is likely to make the "floor value" higher. </div>
<div>
<br /></div>
<div>
<b>Other safe store of value investments</b></div>
<div>
Real estate investment properties and government bonds are stores of value with the appeal of strong expectations of value retention (when no state or banking panic occurs) and a slight beat of expected returns over inflation. When you (or widespread others) expect that bitcoin volatility is merely a short term phenomenon, and has high expected returns over the next 2 to 100 years, then a high proportion of portfolios should be allocated to bitcoin. This applies both to short term volatility traders and long term wealth preservation investors.</div>
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<div>
There is a strong case for a 10%+ portfolio allocation amount for bitcoin, and a strong case for adoption rates to reach that 10%. I would recommend accumulating bitcoin up to 10% of long term portfolio for any investor, and draw down for lifestyle improvements at 50%+ of portfolio, though debt elimination and food/housing supporting income streams or short term stable assets (cash) should be secured after bitcoin holdings reach 20% of portfolio, for nearly everyone.</div>
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<br /></div>
<div>
Global wealth in 2017<a href="https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/global-wealth-report-2017-201711.html" target="_blank"> reached $280T</a>. 10% of that would be a $28T market cap for bitcoin. A 50% of wealth levels in bitcoin would be $140T in 2017 dollars. With 20M btc coin supply, this represents a price target range between $1.4M/btc and $7M/btc in 2017 dollars. </div>
<div>
<br /></div>
<div>
<b>Infationary effects of $1M/btc+ valuation</b></div>
<div>
The QE/money printing response to the last global financial crisis is still ongoing, and from 2008-2016, resulted in over <a href="https://www.cnbc.com/2016/06/13/12-trillion-of-qe-and-the-lowest-rates-in-5000-years-for-this.html" target="_blank">$12T new imagined money</a>. This money was directly gifted to financial institutions and billionaire bond investors, who then funneled it into broader stock market and housing assets. The low interest rates and bank solvency created by QE further supported the housing and auto and student loan markets and continued broad economic participation even when wages and employment did not change significantly.</div>
<div>
<br /></div>
<div>
If we accept that the real economy has not changed much between the halfway point of 2007 and 2008 (pre/post crisis end of years), global wealth increased 27% over 2007 levels, and 50% over 2008. 33% over the midpoint, and that $12T of monetary stimulus created $86T of wealth inflation with at best minimal real economic growth. Low interest rates are the most significant contributor to housing and securities price inflation. The monthly debt payments are more affordable, and business earnings compared to low return bonds are more attractive.</div>
<div>
<br /></div>
<div>
If Bitcoin's value grows by $28T, it will have a similar effect to QE. A big difference is that the profits will flow to some non-previously millionaires and billionaires. They will be able to buy stocks and housing and gold without debt driving the price of those other assets up. It could also keep interest rates low if the overall demand for debt grows down, but on the other hand, those left behind from bitcoin adoption will have to pay for those higher priced homes out of economic effort.</div>
<div>
<br /></div>
<div>
The important point of this section is that bitcoin value is entirely additive to global wealth, and not at all substractive. Every fiat transaction purchasing bitcoin is fiat received by the seller. So if 50% ($140T) of 2017 global wealth is added to bitcoin, the total global wealth in 2017 dollars would be $420T (280+140), and bitcoin's share of that $210T. $10M/btc+.</div>
<div>
<br /></div>
<div>
Just like QE (still aggressively ongoing in 2018), bitcoin value appreciation will boost other asset values and so global wealth further. The key sustainability factor for wealth levels is low interest rates. All assets including bitcoin, but especially real estate (still by far the largest wealth component), prices are significantly affected by interest rates and mortgage availability.</div>
<div>
<br /></div>
<div>
Even after maturing adoption and a $10M/btc price, there would be continued expected price appreciation equal to fiat inflation (assets and consumer prices) level. Bitcoin appreciation will still maintain high wealth inequality levels. But there will be a 2% group even more "unfairly" separated from the 98% until fairness/UBI is instituted through higher tax rates.</div>
<div>
<br /></div>
<div>
<b>The case for over 50% porfolio allocation to bitcoin</b></div>
<div>
There is a high risk that Stocks, bonds and housing values will reach a high that is not exceeded again for 10+ years in the coming 36 months. <a href="http://www.naturalfinance.net/2017/12/how-to-destroy-america.html" target="_blank">The recent US tax plan is destructive to growth. Lies that it is pro growth are made for the exclusive benefit of pumping the stock market which this tax plan will have minimal effect on earnings, and as typically occurs, will lead to banking system failure</a>. The tax plan includes elements that will depress housing prices, and banking loan demand. The effect on the US banking system will be for it to lower its net interest margins, chasing what little loan demand there is, which will expose the banking system to bankruptcy resulting from housing loan losses, and capital markets crashes. Enough people can believe the lie a long time, and especially if further deficit fueled infrastructure and other spending does boost growth, interest rates will rise until it likely collapses housing and banks and auto sector.</div>
<div>
<br /></div>
<div>
Its still possible for there not to be a collapse. More QE is a policy tool the establishment will reach for, and the quid pro quo between banks and central banks if it holds will stabilize the sector. I can't know if unlimited, or double/triple QE programs are a problem, even if intuitively it should be understood as a shameful gimmick. The reason the QE levels will have to be much larger to rescue the next financial panic is that government debt levels are insanely higher than in 2008. QE is a gimmick to erase these.</div>
<div>
<br /></div>
<div>
Even under a no collapse/panic scenario, there is a better than 50% chance that bond prices will not reach the highest levels (lowest yields) seen in 2017 for another 10+ years. The most likely scenario where that doesn't happen is one of a 2008 comparable panic that fuels more QE and near negative interest rates. There is some risk also that Stock indexes might also top out in 2018 or 2019. A 5%-10% likelihood/risk of the main scenario I outlined should be appreciated (even if I am concerned the risk is higher). A 5% chance of a near term 10 year top to stocks is a higher chance than seeing a 10 year top in bitcoin value in the next 100 years. Under these criteria, bitcoin is a safer long term investment than stocks or bonds.</div>
<div>
<br /></div>
<div>
Collapse/panics will negatively affect the price of bitcoin along with every other asset class. Like gold, it should be less so. War and climate change risks will affect housing and banking/economic profits more adversely than bitcoin price..</div>
<div>
<br /></div>
<div>
The case for bitcoin over stocks and bonds with no collapse/financial panic events is that for, the next 10 years at least, while the adoption level is as steep as radio or cellphones were, and ample event catalysts for explosive upside remain unfilled, the expected investment returns are much higher.</div>
<div>
<br /></div>
<div>
Under this expectation, having a paid for house, and financial assets that produce $20k-$40k of income, enough gold to survive a year long electricity outage (5-12oz), and the rest in crypto currencies with a majority in bitcoin is a sensible portfolio regardless of how high the bitcoin percentage is.</div>
Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com215tag:blogger.com,1999:blog-2467928492793719077.post-48316970070949376552017-12-15T15:08:00.000-08:002017-12-15T15:15:58.345-08:00How to destroy America<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><span style="font-size: medium;">Use a catchy name such as Make America Great Again. Then lower corporate tax rates.</span></span></span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><b>Why
destroy America</b></span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">First,
like climate change or exploiting whale oil, it is more a matter of
whether there is a dollar to be made by ignoring the destructive
consequences of that activity, than seeking the destruction
itself. The republican party is owned by those wanting profit despite the consequences of destroying America.</span></span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "times new roman";">The media wants to destroy America for its sensationalist entertainment value, but also because they are controlled by Republican destroyers.</span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<b style="font-family: "times new roman";">What
a destroyed America will look like</b></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">First a banking crisis with currency devaluation and economic decline. Then the only technological progress being tools to protect the oligarchs from the poor masses, and ethnic/racial cleansing programs to address the concerns manufactured for the slightly less poor. Greater totalitarinaism from government until it defaults on debt.</span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><br /></span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><b>Corporate income tax cut to 20% will destroy America</b></span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">A lower corporate income tax necessarily destroys jobs and business spending, because spending results in a tax reduction equal to the tax rate. Lower rate means lower deduction.</span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><br /></span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">Business spending is done in the anticipation of making more money. The preferred source of that money is always current profits rather than dipping into business savings, and so if there is an idea that has hope of being profitable, it is invested in regardless of tax rate. Also, regardless of tax rate, <a href="http://www.naturalfinance.net/2012/04/economic-justification-for-taxes-and.html" target="_blank">the after tax return is the same, but with a higher tax rate, there is lower risk: The higher tax rebate is certain; the future profits not.</a> This applies even in the rare cases that the investment comes from a dip into corporate savings.</span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><br /></span></span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";">The effect of cutting business tax rates is to provide incentives to cut costs in everything that doesn't obviously enhance profits: Executive assistants, quality assurance, customer service, newer computers/phones, conferences in Hawaii... any cost cut that is theorizable to increase profits. <b>The cost of all business spending under a 20% corporate tax rate ($0.80/dollar) is 23% less competitive </b>(more after tax)<b> than under a 35% rate</b> ($0.65/dollar). </span></span><span style="font-family: "times new roman";"> </span><span style="font-family: "times new roman";">Lower business tax rates shift the balance towards greed and away from ethics in all decisions. </span><span style="font-family: "times new roman";">Bribes, illegal immigrant cash paid exploitation, and other off-the-books payments are 23% more competitive.</span></div>
<div style="margin-bottom: 0cm;">
<span style="color: black;"><span style="font-family: "times new roman";"><br /></span></span></div>
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<span style="color: black;"><span style="font-family: "times new roman";">Another provision of the tax bill also inexplicably increases risk of investment for no good reason: A cap on business loan interest deductibility. Normally, a restaurant owner that wants to expand to a new location could feel comfortable that the incomes from the new and old business would cover the loan interest. Even if he hopes that it will greatly exceed the loan interest, as long as he's fairly certain that it will cover it, it makes sense to go with it. With new rules, if the new restaurant doesn't meet high expectations, the business may owe taxes that exceeds its net income. </span></span></div>
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<span style="color: black;"><span style="font-family: "times new roman";">When every business is directly incentivized to spend less, it is necessarily destructive of jobs and the economy. Any people telling you different are either retarded imbeciles who should keep quiet, or actively lying and intentionally destroying America's economy in order to channel a larger share of the pie to their masters. Even more simply, stock market salesmen use tax cuts as a good sounding story to get you to buy more stocks, even when the job creating story is a lie, and even the intrinsic effect on stock prices themselves is, in most cases, a lie.</span></span></div>
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<span style="color: black;"><span style="font-family: "times new roman";"><span style="font-size: medium;"><b>Republican masters and desperation</b></span></span></span></div>
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The Koch brothers and other energy dead enders (climate destroying and murderous (polluting, explosions, geopolitics) energy that is already more expensive than renewables without even including the environmental restoration costs) are the key group intent on destroying America. They and other billionaires are the ones pushing for this tax plan, really as a single issue for them, and are the corrupting influence that allows the republican party to remain influential. They are also threatening to withdraw support for what will be difficult mid term elections if they don't get the tax plan they want.
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The corporate tax cut, and estate tax elimination, electric vehicle credit, continued subsidization of carried interest and 401k plans for wall street, are the key aims of America's destroyers. They want this tax plan, not because they wish to dip into their or their corporate savings to create jobs, but so they can die with more in savings.</div>
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Many key republican Oligarch minions have ties to Russian Oligarchs and/or mobsters. Its my opinion, that though most of those relationships are to facilitate money laundering, the support that the Russians provide these minions and republicans is to facilitate their intended destruction of America. At any rate, Americans should be more concerned about Americans trying to destroy America than whether Russian agents left a paper trail in assisting them, which since they could use their own money, is unlikely.<br />
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<b>The foreign competitiveness argument</b></div>
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By leaving much of the transfer payment structure, there's no effect on tax competitiveness. There continues to be opportunity to shift profit to low tax countries independent of where the revenue comes from, but a lower US tax rate encourages putting production expenses elsewhere. There may be a bit more profit assigned to US jurisdiction as a result of this, there will be political grandstanding of HQ's announcing a move to the US, but the real spending of production may move to Europe if that makes sense (wage costs and talent usually much more relevant than tax considerations in where to produce).</div>
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<a href="http://www.naturalfinance.net/2017/02/border-adjustment-tax-and-natural.html" target="_blank">Real tax reform addressing foreign competitiveness would eliminate all transfer payment discretion, taxing money earned in a jurisidiction as a taxable expense only to entities in that jurisidiction. Allow for corporate tax refunds for production in the local jurisidiction. Taxes owed where the sales occur.</a></div>
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Lying fuckface Tim Cook, CEO of Apple, has made 2 disgustingly absurd statements in support of the parasitic oligarch destruction of America.<br />
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First, he's committed $1B to an investment fund as a purely political grandstanding measure he falsely claims is in anticipation of the corporate tax cuts. Lying fuckface controls $270B in cash, and tax cuts have no bearing whatsoever on this political grandstanding. He can make any investment he wants by borrowing against cash (/assets earning the same return as the loan) held overseas. If those investments fail, he will reap a larger tax offset if the rates are lower. Though this perfectly offsets the risk for paying taxes if the investment wins (and so the investment decision is completely unaffected by tax rate), if the investment pays off, its more cash for the hoarde regardless of tax rate.</div>
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Second, he's said "Why repatriate cash and pay 35% tax when we can pay 0%?" So then why pay 14%? Placing surtaxes on foreign subsidiary profits should shift more spending overseas to reduce overseas profits. With blue state surtaxes, R&D should be shifted overseas where it will reduce profit at higher tax credit, and where specific research credits are available. Arguably has a fiduciary duty to shareholders to do so.<br />
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<b>An aside on the <a href="http://www.naturalfinance.net/2015/10/the-hamster-wheel-economy.html" target="_blank">hamster wheel economy</a></b><br />
The US QE money printing program was used, if as we are told, to save civilization from collapse. Though fundamentally similar to Zimbabwe monetary policy, the quid pro quo arrangement between the central bank and the banking system did successfully keep banks solvent, interest rates low, and asset prices high: Banks and rich bond investors were offered the sure trade/free money. of buying government bonds ahead of the Fed. That free cashflow and profits flowed down to other asset categories such as stocks and housing. This further helped banks trading portfolios and loan collateral value.<br />
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Its entirely fair to resent the extreme inequality in wealth increases that the "recovery" permitted, but the lack of job and income growth would have been much worse without the resulting bank solvency, and relatively broad trickle down of asset portfolios that sustained some modest spending levels throughout the economy.<br />
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While this tax plan is also an attempted stimulus for the rich, it will lead to another banking and asset crash, and in fact harms every economic sector that isn't a monopoly. The next banking/asset crash may be the last due to the high US debt/obligation burden. Another round of significant QE and US currency devaluation may avoid public debt restructuring/defaults, but its more likely to take shape as QE for banks and cannibalism rather than QE for people and UBI.<br />
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<b>Tying collapse to the corporate tax cuts</b><br />
The US banking system is ultra competitive, but also very simple. Loan rates are driven by Net Interest margin (NIM) targets (difference between saving or Fed rates and loan rates). At a 35% tax rate, a 2% pretax NIM results in a 1.3% after tax contribution. At a 20% tax rate, there's an illusion that the after tax contribution can rise to 1.6%, but if a top tier bank was happy targetting $10B profit for the year under the old tax rates, then it is<b> happy to lower mortgage rates from 2% old pretax NIM to a 1.62% pretax NIM to make that same 1.3% after tax NIM under the new tax rate proposal</b>. One bank cannot offer a 4.38% mortgage while its competitors offer them at 4% and keep business, so if any one bank targets the same profit shitload it was going to make under the old plan, all of its competitors must follow.<br />
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While lending is a bank's main business, its overall profits are significantly affected by trading and loan losses. Lower pretax NIMs significantly increase the risk that loan losses overwhelm expected loan profits. Higher tax rates reduce the risks of losses banks are particularly prone to from erasing its "trickle" loan income. The flawed tax treatment for business loans is going to reduce demand for commercial lending, and so pressure lending rates to be even more competitive.<br />
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On the personal tax side, several provisions reduce housing affordability, and so necessarily decrease housing prices: caps on property tax and mortgage deductions, and expected interest rate rises. Housing values everywhere in the world are a function of mortgage availability/affordability. The US banking system is too fragile to stop the hamster wheel economy of perpetually increasing asset (mainly homes) values.<br />
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The 19th and 20th century economy are by far the dominant employers in the US. For the most part are also highly competitive: Auto, Aerospace/airlines, mining/materials, retail, packaged food, transportation/logistics sectors. These sectors will also face the same gross margin compression pressures as banks while in an environment of high consumer debt levels, and disemployment related to a 23% cost competitiveness penalty for US expenses. For multinationals, a 23% relative competitiveness improvement to any foreign production costs will mean less domestic production competitiveness and associated jobs, or more likely, a near 23% reduction in US dollar strength, spurring a race to the bottom in global currency valuations.<br />
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20th century economy companies are not doing as well as monopolists and the tech sector. Lower gross margins, and lower value of accumulated tax credits in the old economy will risk bankruptcies and reduce the value of bailing them out of or persisting through the risk of bankruptcy and sustaining their labour force. For those profitable tech companies, any foreign profit surtax encourages bringing foreign profits to 0 potentially by moving all R&D overseas. The important jobs that determine long term international competitiveness should leave quickly if the intent of the ruling party to destroy America is understood. Whatever California based protest and opposition funding there is will be irrelevant so long as gerrymandered voter suppression is processed by unaccountable voting machines installed by the more corrupt party or their foreign agent hires.<br />
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The false simplicism that a corporate tax cut will boost non-monopolist stock prices is a narrative the financial market salesmenship industry portrays in order to pump stocks. Even in the case of monopolists, a $100/mo cable TV package or $1000/mo HIV medication doesn't do well in Somalia when few people can afford them. In fact, the only rational value of a corporate tax cut push is the glorious opportunity generated by a false stock pump, where oligarch management has insider information for the appropriate timing of the collapsing dump, and in the ensuing "drowning of the collapsing government in the bathtub", in the desperate reach for social funding, gratitude from the politicans that stimulated the collapse, will hand out new privatized monopolies of government services to the oligarchs that sponsored their power to do so. Collapse is in fact the only profitable rational intent of a corporate tax rate cut within the WTO-discretionary-profit-allocation. A world where the S&P 500 pumps to 3500 before collapsing to 1000 is gloriously preferable for those positioned with insider information to guess the top than a hamster wheel world that tediously inches forward sustainably. Oligarchs aside, small-proportion asset owners have a greedy impulse that prefers a collapsing unsustainable pump (followed by dump) relative to boring sustainability, as there is an overconfident tendency to anticipate the proper sell/dump timing. Banking and stock panics always follow business tax cuts because of the widespread greed-blinding stupidity on this issue.<br />
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<b>Risk of global race to the bottom and collapse</b><br />
While Americans are disproportionately stupid, the huge investment in packaging lies to sell to Americans can be repackaged cheaply to sell to other jurisdictions. Nations who've already invested in attracting meager HQ and international tax arbitrage jobs through low tax rates might be tempted to lower them more. In fact, for multinational oligarchs with monopolist power, lobbying global politicians to sweeten their tax arbitrage opportunities in response to US move will come naturally.<br />
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To avoid this race to the bottom, just one nation needs to adopt natural/cashflow taxation as described below.<br />
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<b>Natural/cashflow taxation permits a race to the top</b><br />
<a href="http://www.naturalfinance.net/2017/02/border-adjustment-tax-and-natural.html" target="_blank"><br /></a>
<a href="http://www.naturalfinance.net/2017/02/border-adjustment-tax-and-natural.html" target="_blank">Natural taxation</a> is:<br />
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<li>A flat business tax rate that applies to all cash inflows within the jurisdiction, and same flat tax deduction for all cash outflows including investments and dividends within the jurisdiction.</li>
<li>All payments/receipts have a counterparty in the same jurisdiction, so each transaction is at worst tax neutral. No tax implications exist for transactions outside the jurisdiction.</li>
<li>The same flat tax rate + small surtax (0%-3%) applies to personal income. A 10% surtax applies to personal investment profits.</li>
<li>No payroll taxes.</li>
<li>Basic income is funded from tax revenue surplus, thereby making the flat personal tax rate progressive on an effective tax basis.</li>
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The big difference for multinationals between natural taxation and WTO-discretionary-profit rules is that there is no discretion in taxes due. Sell somewhere, and pay at that jurisdiction's rate. Make somewhere, and receive a cash refund at that jurisidiction's rate. Its no longer possible to sell cars in a high tax jurisdiction at low profit (due to made up expenses paid elsewhere) while selling the same cars in low tax jurisdictions for high profit (again with expense assignment discretion). Panama/Paradise papers tax avoidance schemes are impossible.</div>
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The big difference for societies is that imports pay the full tax rate on their full revenues to their society, thereby participating in funding its programs or UBI. Export oriented business models that spend more than they make locally are supported at near net 0 tax cost. The 3% personal income surtax in fact ensures that the tax revenue generated by their activity in the local society is 3% of their spending. But spending is always the entirety of jobs and supporting of more local spending.</div>
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UBI is also fundamentally a job creating program. There's money to collect from UBI recipients by providing goods and services in exchange for it. Everyone who wants a job has a much easier time obtaining one (if those who don't want jobs refuse to work), and the boost to innovation in addition to earning cash back on early year losses (tax credits) comes from the freedom to pursue ideas without starving, or having the fortune of a rich family patron.</div>
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Not only is this a fair and honest tax system made to dial in any desired growth/job creation/pro-wage (higher tax rate) vs wealthy paradise (lower tax rates that allow for lower consumer prices), but because the US is breaking WTO rules first, it can be launched to expand its viability for other nations. Any competitive disagreement among trading partners is best addressed by matching the tax strucuture and setting the tax rate to your own society's preference. This mechanism could even be applied between US states to account for each's desire for fostering innovation and welfare</div>
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Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com6tag:blogger.com,1999:blog-2467928492793719077.post-70305685859007896562017-09-02T17:29:00.001-07:002017-09-03T04:55:53.896-07:00UBI as a solution to the public pension crisisUniversal Basic Income (UBI) is a cash dividend paid to society's members with the primary philosophical justification being that members own the society, and deserving an equal share of social revenues should be the primary purpose of those revenues. Diversion of social revenues to fund public programs is appropriate when the programs are useful and efficient enough to convince the majority of social members to forgo a portion of their dividend in favour of funding that program. When UBI is a sufficiently high amount, it also happens to eliminate poverty.<br />
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<b>Political simpliciy of UBI</b><br />
If the UBI amount is higher than the value of any government entitlement, then reform can eliminate that entitlement as part of the funding formula for UBI, without causing any harm to the beneficiary of the previous entitlement, and so no rational political objection to it. A public pension is a government promise, and government promises are fundamentally entitlements. So public pension funds become part of the financial/program pools available to convert into a UBI amount.<br />
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<b>Pensions are fundamentally ponzi schemes</b><br />
For a pension system to stay solvent for 1000 years, it cannot use a defined benefit (promise of a specific compound annual return) system, and it cannot pool funds for general use (as opposed to segregating shares for individual entitlees), and it cannot be administered by anyone controlled by any motive other than protecting and maximizing all pension entitlee's returns, including the 1000 year sustainability mandate.<br />
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Public pensions typically fail all 3 of these tests, and all pensions fail at least one of them. The defined benefit rule is always either a corruptibly unappealing too low of a return, or one that is unsustainable in the long run. To sell a pension system to enrollees, it is necessary to lie about magnificent promised returns. The reason you sell a pension system to enrollees is to control their money. Buying debt or shares of the organization with their money in order to boost those values, is the typically envisioned use of that control. Paying employees with future promises may also effectively augment their <a href="http://www.naturalfinance.net/2017/04/work-ethic-is-code-word-for-slavery.html" target="_blank">work ethic</a>/devotion, using the tax code to induce them into accepting less pay in exchange for dubious promises.<br />
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Defined contributions (the alternative to defined benefit, where enrollees' entitlements are not a specific promised return, but whatever the returns happen to turn out to be) have their own problems. The administrators are interested in fees or in fulfilling the motives of the controlling party. Any friendships (bribery or corruption) they can form by utilizing the pension pool can provide better compensation alternatives than performance fees, though the latter can eat through returns well enough on their own. The ideal performance fee structure is more complex than pension enrollees can understand, but is one that mirrors the defined benefit promises, while also encouraging capital preservation. The better the pension administrator, the more power for the administrator to set a fee structure that benefits the administrator in deviation from the ideal.<br />
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The most important determinant of the ponzi scheme nature of every pension system is that there is no genuine concern for the 1000 year mandate. At any slight performance or sustainability risk, protecting the benefits of the majority of entitlees (always the oldest) is the tradeoff chosen in favour of an eventual sustainability calamity/bankruptcy. Ignoring sustainability issues such that bankruptcy occurs in 20 years is the preference of a 60 year old (with average life expectancy) compared to the alternative of taking a pension cut to ensure longer term sustainability.<br />
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A pension fund that invests in the organizations' securities is one that insures its bankruptcy's dependence on the organization.<br />
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<b>Pensions as a corruption of democracy</b><br />
A promise made 40+ years from now where no one today will be accountable if it is fulfilled or not is empty, even if it can be honest. <a href="http://www.naturalfinance.net/2012/09/should-we-vote-to-end-civilization-in.html" target="_blank">The important essay </a>goes into detail on the incompatibility of pension systems with democracy, and also into details given in the next sections on liquidiating public pensions for immediate payout.<br />
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<b>Immediate pension liquidation alternative to forseen insolvency</b><br />
Although a pension ponzi scheme, like most investment offerings, is designed to take in money while taking every (legal) opportunity to avoid paying it back, a fundamental option satisfying the inherent rights of the entitlees is immidate liquidation proportional to the vested balance of each entitlee prorated to the fund's current solvency rate. This is the fairest solution when worsening solvency fears exist, but its also a fair solution under any circumstance (a pension system is just holding money for you, restricting your access to the future, "for your own good". Removing that restriction is still not a real harm to you.). The relevance of "solvency fears" is that a wide variety of corrupt pension modifications are proposed in the face of these. Invariably, the proposals of no change, or stealing from the benefits of younger enrollees to sustain older enrollees' benefits are both generational warfare solutions, as they harm those at the end of the entitlement line.<br />
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While public officials have the same corruptibility as private pension systems, and the desire to control their stakeholder's money as long as possible, it doesn't change the point that the only fair pension variance rule is one of immediate dissolution.<br />
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<b>Non-UBI pension dissolution solution</b><br />
Considering that pension enrollees may not need immediate access to funds, and that current tax policies favour ponzi schemes (tax due when deferred income paid), dissolution of pensions into an on-demand withdrawal fund based on current market value (and so defined contribution based from hereon out), and asset portfolio is both fair, and avoids the costly rapid liquidation of the pension fund, satisfying concerns of the pension inflictor.<br />
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A UBI solution is preferable and applicable in the case of public pensions due to its inclusion in broader tax and institutional reform that is needed for many federal and regional organizational jurisdictions.<br />
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<b>UBI as cooperation among levels of government</b><br />
Though UBI is most often proposed as a federal program, it can be implemented at any social revenue level, and is best implemented as contributions from all levels of government. Program savings from UBI can be in social services, justice, education, health care, and if the savings created by UBI come to 3 budget levels, ideally, so should the funding.<br />
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In the context of eliminating pensions, that is a major UBI funding source, if the UBI level is sufficiently high to eliminate most pension obligations. This implies funding participation by all levels of government in order that the total contributions of each can help discharge each's pension obligations. <br />
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<b>Mechanism that UBI replaces an entitlement or pension oblligation</b><br />
A UBI of say $15k can fairly replace a pension obligation if that pension obligation is either below $15k, or if the pensioner still receives the excess over $15k, if their pension entitlement is above the $15k UBI level.<br />
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Under UBI the pensioner receives everything they were originally promised. Considering the sustainability jeopardy present in almost all public pension systems, UBI being a stronger and permanent entitlement makes it much more preferable to the pensioner than potential bankruptcy negotiated or politically dictated cutbacks.<br />
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<b>UBI replacement is fair to both strong and weak pension funds.</b><br />
While weak pension fund entitlees are gratefully bailed out by UBI conversion, strong pension funds provide stronger funding for their UBI pool. Though not necessary for fairness, strong public pension systems could offer a politically motivated incentive to pensioners offering them their pension entitlements above say $14k on top of the $15k UBI (an extra $1000 for those with pensions worth more than $14k/year).<br />
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The idea of replacing pensions with UBI is a key affordability facilitator for UBI, and it is fair to deny public pensioner's the windfall of a supplementary entitlement above and beyond their pensions.<br />
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<b>Amount pension replacement contributes to UBI</b><br />
US state pension obligations are $4.3T, US state and local pension assets are a bit under $4T. These assets could be liquidated over a 10 year period. Contributing over $560B per year (over $2000 per 227M adult citizens) with a 5% assumed return on the fund (conservative considering the economic growth impact of UBI).<br />
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This is a substantial contribution source that means UBI can be $2k higher at the same tax funded cost than any baseline amount. Funding UBI is a simple sum of all funding sources, as was done in this <a href="http://www.naturalfinance.net/2015/11/ubi-funding-option-for-canada.html" target="_blank">tax-rate neutral plan for Canada</a>. An extra $2k per person in funding can be either $2k more, or $560B is a flat 3.1% lower tax rate on GDP, or 18% less needed (federal) tax revenue.<br />
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<b>The pension crisis</b><br />
The figures of $4T assets and $4.3T liabilities come from the federal reserve (and omit liabilities other than state pension funds). With Federal reserve numbers, Illinois has a $114B funding of $247B liabilities ($133B funding shortfall, at a 46% funding level) as of Q1 2017.<br />
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<a href="https://www.cnbc.com/2016/10/07/us-state-public-pension-unfunded-liabilities-to-hit-175-trillion-moodys.html" target="_blank">Moody's assesses total public pension liability shortfall at $1.75T</a><br />
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<a href="https://seekingalpha.com/article/4084458-public-pension-crisis-reaching-tipping-point" target="_blank">This article highlights California's problems, and how the state politicians are assuming 8% perpetual future returns as a device to use pension funds for other purposes</a>.<br />
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<a href="http://pensionpulse.blogspot.ca/2017/08/new-math-hits-minnesotas-pensions.html" target="_blank">Previously apparently nearly solvent states (Minnesota) crumble when forced into appropriate accounting rules.</a><br />
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<a href="http://www.pensiontsunami.com/" target="_blank">A portal devoted to the seemingly innescapable pension calamity with over 10 topical articles per day</a><br />
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Federal pension plans (social security, Canada Pension Plan) have similar solvency cliffs. Population pyramids with low birth rates in generations following the baby boom are a root cause of funding deficits.<br />
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There is no pleasant or fair solution other than public pension elimination and liquidation with UBI replacement. UBI solves the ponzi scheme nature of pensions by insuring short term budgeting (rather than 40 year or 1000 year) of its funding. Any program or financial crisis management policy is a cost taken equally from every citizen (by reducing their UBI equally to pay for the program/policy) instead of an act of political favouritism that has one group made to bail out another.<br />
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<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com5tag:blogger.com,1999:blog-2467928492793719077.post-10637006085827507732017-04-26T12:33:00.001-07:002017-05-01T11:31:49.313-07:00work ethic is a code word for slaveryUniversal Basic Income (UBI) has the same rationale as Universal Health Care. Provide the means to survive without a work requirement. The recent legislation attempt in the US to replace the flawed ACA (Obamacare) health plan with an even more flawed and (lower quality) health plan that would push 24M Americans out of coverage, and failed to pass only because the so-called freedom caucus (a wing of Republican party) found the bill insufficiently oppressive. They used the language of "work ethic promotion" as code for "insufficiently oppressive". Some Democrats share the Republican's deep hatred for the American people by not supporting the alternate "Medicare for all" bill. Nanci Pelosi's voiced concern is that it would mean higher taxes.<br />
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Structural oppression to maintain the people's work ethic is fundamentally equivalent to supporting slavery. Its a transformation of the unacceptable physical chains and abuse of slavery, with less visible, structural chains that force us to seek kind masters to alleviate our food and shelter (and healthcare in US) insecurity. High abundance dictates that we should make the world/society more welcoming (easier) rather than harsher.<br />
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<b>Work is awesome!!!!</b><br />
It provides fame, fortune, a positive source of self identity, a feeling of helpfulness, pride of creation and responsibility, and the means to form a family, and/or buy boats, hookers and intoxicants.<br />
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The benefit of work sells itself. For necessarily evil reasons, however, leaders and politicians wish to structure a harsh world such that those benefits need to be supplemented with harsh consequences for failing to do or find work. Conventional thinking is that the labour market must be unfairly coercive towards labour suppliers and create a bias towards employers.<br />
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<b>Slavery and oppression are awesome!</b><br />
<a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html" target="_blank">Most people support slavery</a>. Its not a rational support, but it is rooted in philosophical belief in the work ethic. Still a significant number of powerful people do directly benefit from oppression. If you want to buy a house, you will get a better price from a seller financially overburdened from owning another house, or desperate to pay for a medical procedure. Buy products manufactured in low cost third world areas because they are cheaper. Forcibly manufacture desperation in your own society so that you can oppress your fellow citizens into conditions competitive with the third world, or to consider the military a sensible career choice.<br />
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Its only this last (very small numbered, but powerful) group that has a rational interest in opposing UBI. For the rest, their position in the harsh hierarchical order is probably a <a href="https://en.wikipedia.org/wiki/The_Grand_Inquisitor" target="_blank">zombification they prefer over unknown freedom</a>..<br />
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Yet the necessity and desirability of having others to exploit decreases every day as machines grow more capable of following direction without question or relative expense. Remote control of (military) murder weapons only needs to pay the operator enough to overcome the moral deficit of the actions without needing to convince them that the actions are more important than their fears.<br />
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<b>The family farm - origins of the work ethic</b><br />
Families are communes. The wealth is shared within it. But a family is also a hierarchy. Parents teach their children a work ethic in order for them to help around the house/farm, respect for their creators, and aid them in their old age. Developed nation birth rates declined in large part because of socialized eldercare. There's less of a need for children to help. The birth rate decline started with industrialization.<br />
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The <b>freeloader problem</b> exists (only) within communes. A fixed amount of work is required to sustain the household, farm or commune. All work that I avoid, you have to do. Both of us are unpaid to do the communal work. So work ethic is important to the household/commune to ensure a fair share of duties.<br />
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<b>Outside of the commune, freeloaders are an opportunity (not problem) for you</b><br />
If no one else in the world wanted to grow wheat, I would like to grow it all because I love bread so much. If no one else in the world wanted to bake bread, I would do it all because I love boats, hookers and intoxicants so much. Extremely high wealth potential exists for any activity that other people are too lazy to do.<br />
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Outside of your commune/family, your work is paid for. A small portion of your profits being used to pay for freeloaders (through taxes) enhances your wealth compared to an exterminist policy. If 50 out of 100 social members are productive, and share the burden of socialized support for the population, then on average each productive person supports the subsistence of 1 other.<br />
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It does not take twice as much work for me to produce wheat for 100 vs 50 people.At the cost of just 2% of my production, I get to double my sales, and more than double my profits. Other productive people and businesses support most of the "hippies". The hippies can also provide me with hookers and intoxicants and entertainment.<br />
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<b>"Teaching" work ethic to the hippies is counterproductive for me</b><br />
If I am the only one growing wheat for a 100 people market, I sure as hell don't want to force anyone else into competing with me. Even if I were lucky, and teaching/forcing a work ethic upon the masses drove the hippies into bread baking or boat building, there is the much more important consideration that UBI supports them in the most (cost) efficient way possible.<br />
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Hateful work indoctrination programs such as conditional welfare, police and prisons to deal with hippie non-compliance (including survival motivated theft) means an even more expensive solution involving employing/forcing unproductive people to inflict unnecessary conflict and hate on the hippies. The conflict itself distracts from hippie productive pursuits.<br />
<br />
<b>Financial destressing/security helps the productive classes too</b><br />
The most important obvious benefit of UBI, or anti-poverty programs in general, for the productive is that the poor spend it all, and so tax money flows right back up to taxpayers. The less obvious, but even more important benefit of UBI specifically for the rich productive is that, UBI is a safety net for everyone. Not just the poor. This means that the only reason to have savings is having more wealth than you know how to spend. (An alternative reason to have savings today is an emergency/rainy day fund, or planning an early retirement, or funding children's early adulthood education or support )<br />
<br />
Lower income variability, and assured future income subsidies means a lower need for emergency savings, and setting aside for children's adulthood (they will be able to pay for their own education through UBI), among productive people. This necessarily means, more spending, and so more income for society as a whole as more work is needed to collect all of that spending. Since income always flows up to those with more wealth than they know how to spend, this is a benefit to people at all income levels.<br />
<br />
It is this point that <b>UBI is an improvement to life for people at all income levels, and with all possible attitudes towards work</b>, that leaves as the only rational opposition to UBI as the manufacturing of misery and desperation for exploitation.<br />
<br />
The right may have more evil motives for expolitation: military service, slums, sweat shops, motivated servitude in pursuit of unethical behaviour, intentional destabilization of regions to promote violence and racial tensions. But the left can also wish for exploitation to persist as it justifies hierarchical empires to combat it: Union dues, government charitable services, unnecessary work.<br />
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<b>Controlling the work ethic of others is a root of this irrationality</b><br />
The need and acceptance of controlling others is a root of this root, but the thinking around coercing work ethic is clouded by misunderstanding society as part of the same family farm. Other people's laziness (outside of our commune) is the source of our profits. Oppression causes savings and hoarding (and therefore not trading for your profit) in defense against that oppression, and violence, fraud, and other costly antagonism in reaction to that oppression.<br />
<br />
Coercing work ethic is necessary in forcing tax cuts for successful companies and people (where success is portrayed as work ethic). It helps convince the public that the rich deserve to rape society, if other workers share a bit of the traits that are glorified.<br />
<br />
<b>Proof that UBI and higher taxes leads to more wealth and income for the rich</b><br />
An empirical point is that the GINI coeficient (measures wealth inequality) for Denmark is (slightly) higher than that of the US. Denmark is recognized as having a generous social safety net. Logically this is explained by most people not needing to save in Denmark, and so savers are typically those with more wealth than they know how to spend.<br />
<br />
In a simplified economy designed to approximate the US economy, with $10T consumer spending, 200M non-senior adults can be provided UBI of $16k/year, at an average tax cut of $4000 ($800B in program cuts). Couples with household income of $160k <a href="http://www.naturalfinance.net/2015/11/ubi-funding-option-for-canada.html" target="_blank">could break even taxwise</a>, with those earning less getting a net tax cut, and those earning more a net tax increase. <br />
<br />
$2.4T in redistribution is accomplished (16k * 200M less 800B program cuts) All of which is taken from savers and given to those with high propensity to spend. Furthermore, households near the $160k income threshold would typically save for kids college education and early retirement opportunities. Both of these needs are significantly alleviated by UBI: Kids will be able to fund their own education, and UBI income supplements significantly reduce the savings requirements for any sustainable income level. So existing savings by those earning under $160k will be drawn down, and the increase in consumer spending will likely be greater than $2.4T.<br />
<br />
$2.4T in increased consumer spending on a $10T base, is 24% growth. Since all income flows up to rich savers, this will mean a greater than 24% increase in the incomes of the highest earners, and a much higher benefit than any tax increases they face.<br />
<br />
More wealth for the rich should not be understood as negative under UBI. They get rich by providing more value to lower income groups which have an easier opportunity to acquire that value. Even though lower income groups will have less reason to save, they may still choose to do so in order to climb up the wealth ladder. Poverty and lack of opportunity are real problems. Wealth inequality is not a real problem.<br />
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<b>Getting Business leaders advice on the economy is like getting polution and climate advice from coal miners</b><br />
<br />
Business leaders have no goal for employment, research or investment. All of which are necessary for economic health and growth. Business leaders want to hire slaves, want to cheat customers without repercussion, pollute freely, have innovation subsidized, and bailed out by government when they fail. They don't want money in order to do economically productive activities, they do econoomically productive activities because they want money. <br />
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<a href="http://www.naturalfinance.net/2012/04/economic-justification-for-taxes-and.html" target="_blank">Business tax cuts directly reduce employment and other investment because lower tax rates means less of a tax refund for those activities</a>. Any filth that tells you differently, is lying, trying to steal from you, and trying to destroy your country.<br />
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If destroying the economic health of a society can be done while milking it dry for a greater share of the milk for business leaders, along with the opportunity to acquire the rubble at bargain prices, with a good share of the bailout subsidies meant to redress the destruction, then that path to destroying the country is the advice business leaders will provide media and political leaders, and the latter can often value the friendship of business leaders more than their constituents economic health.<br />
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<b>Free and fair labour markets</b><br />
<br />
<br />
UBI relies on the market principle that work will get accepted at a sufficiently high offer. I recognize that slavery, and oppressive conditions approaching slavery, can motivate more work more cost effectively than fair markets can.<br />
<br />
But the only change to labour markets that UBI causes is higher wage offers and better work conditions needed to be made to compete with the leisure or entrepreneurial options available to the worker with UBI. Businesses are not at a competitive disadvantage with each other, and can just raise prices to pay for the higher costs.<br />
<br />
There's also the potential for lower wages under UBI. Labour regulations become less necessary. If there are 1M applicants per job opening, but the applicant's needs are for beer money (because food and housing is covered by UBI), then some applicants may be happy with a wage offer that is for beer money.<br />
<br />
<b>UBI promises a happy society with high wealth inequality</b><br />
Under UBI, the rich get richer by manufacturing the abundance for a very broad consumer base. The poor happily trade their UBI money for those goods, secure in knowing more will come next month. The alternative gets ugly: culling people to save on taxes, similar to recent republican healthcare bill compromise to deny insurance coverage on the basis of pre-existing conditions, exterminating them, so premiums can be reduced for the healthy.<br />
<br />
<b>Exterminism is the logical alternative to UBI</b><br />
<br />
Automation in just transportation, retail, and food service will mean massive social disemployment. Meanwhile, all of those industries need significant numbers of consumers with disposible income to survive and thrive. The exterminism option is also the choice that ensures economic collapse.<br />
<br />
The appeal of exterminism is that once "we" don't need people for military and police (especially), then exterminating anyone that might require social support saves the cost of that social support. The seeds for this are already firmly planted. First you<a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank"> come for the muslims and mexicans</a>, and the nazis will cheer for it, for they are neither muslim nor mexican, but are too stupid to understand that genocide does not create jobs. It creates empty housing and abandoned cars, and excess food capacity, then just scavenging for those goods. The weapons used to exterminate the early waves of undesirables can easily be turned onto expanded groups made desperately criminal by the spiraling collapse.<br />
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But before you start the explicit extermination on racial/ethnic grounds, you should destroy the social safety nets such as healthcare access and welfare. Manufacture crime increases to strenghten police and prison resources, and show society how undeserving the criminally desperate are of social support. An invisible sheppard's hand can manufacture hate and violence among the sheeple and the goats. Short sighted cost savings are often mistakenly chosen despite the obvious economic benefits of population sustanence.<br />
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<b>Greater than 50% chance that exterminism wins</b><br />
US Republicans favour exterminism. Climate destruction and war is one path to exterminism they favour. But, even if we escape that fate, robocops can be as little as 10 years away. Corrupt electoral and governance processes may make democratic opposition to exterminism irrelevant.<br />
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Even if there is a clear path towards great economic shared prosperity, there may be too many idiots who will follow those who see profit from actions directly leading to collapse. For example, coal is a dead techology. There should never be another dirty coal electric plant built even on profitability grounds. But if someone can make a dollar keeping a coal plant from shutting down for 5 years, regardless of the destruction caused, <a href="http://www.naturalfinance.net/2015/10/whale-oil-history-as-incentive-to.html" target="_blank">he'll use that power to make a dollar</a>.<br />
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<b>Is a world based on slavery necessary?</b><br />
There is obvious appeal to business leaders for creating and maintaining a desperate subclass for which work ethic is "whipped" up, and structurally shaping a labour market composed of desperate sellers forced to aggressively outcompete each other, and powerful buyers able to dictate oppressive terms<br />
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For UBI not to cause production collapse, the labour market would still need to function when people may refuse to work. Employers offering better wages and work conditions is not a world collapsing situation. Fairly power balanced labour markets exist in professional sports, entertainment, and have existed in stem fields and mid 20th century high demand conditions which gave rise to unionized manufacturing labour. In the case of stem fields and manufacturing, industry was thriving when wages were higher. Entertainment and sports are still thriving now.<br />
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Quite obviously, balanced markets work themselves out just as easily as coercive markets. So there should not be a panic or opposition over allowing fair labour markets.<br />
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<b>Automation makes slavery no longer necessary.</b><br />
Forcing other people's work ethic only benefits the slavers, and threatens you with culling/extermination, not to mention increases the competition you face for work.<br />
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RoboCops, RoboSoldiers, RoboDrivers, RoboMiners, RoboBuilders, RoboFoodservice all promise to eliminate the need for slaves. Unless immediate consciousness that renounces work ethic politics and the false notion that exterminating/deporting groups of people can ever create more work for the slavers' favourites, then your eventual extermination is threatened too. When only white republicans remain, poor white republicans will be put up for extermination.<br />
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Liberating people from slavery (and letting them survive and thrive) with UBI, lets 9B people contribute to the improving abundance in the world. Art, design, software, science are more useful and profitable and affordable the more people they benefit. A robot is very useful in providing food for 1M people. For 4 people, research into improved automation is not worthwhile.<br />
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Even if it should be obvious that more people helps all of us be richer, the stupid believe what they do despite reason. Power rather than wealth can motivate slavery, and then when slavery is no longer useful, extermination rather than pursuing the market opportunities that UBI fed people would deliver for you.<br />
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<b>Laziness, Greed, and Fear</b><b> </b><br />
<ol>
<li> Everyone is lazy. Even the poor opt to pay for pipes to deliver water and energy (automation) rather than going out every day to collect it from nature. (property rights/regulation may prevent that option in some places). UBI gives everyone the means to pay for their laziness.</li>
<li>Everyone is greedy. No one would respond to a $5M offer for their house or their labour with an argument with the bidder for it being too high of an offer. Where greed is destructive, is the use of coercive power to further accumulations. Greed ensures, under UBI, that people will volunteer to permit other's laziness in exchange for their money.</li>
<li>The overwhelming political majority can be made afraid of false phantoms as a result of the combination of relative stupidity and information imbalance relative to the wizards. Jealousy, hatred, and envy are also easily manipulated negative emotions. Where UBI equalizes opportunity, society can be much more harmonious, and individuals can look to themselves to improve their lives as they see best. The significant difficulty facing the world is that political structure rewards manipulation with an objective of obtaining power to abuse power. It is greedy to lie and distribute the spoils of victory to favorites, but why engage in difficult struggle if not to abuse the power of victory? UBI as a social dividend is fundamentally incorruptible, and its appeal is based on avoiding the abuses of traditional political liars.</li>
</ol>
The commonality of these 3 attributes is that none of them will ever be changed, but with automation and abundance, individual laziness becomes a positive for the rest of society as it improves "much needed" work opportunities. Phantom manipulations of fear and hatred must be exposed because tax cuts for the rich and accelerated climate destruction is the straight line path to extermination.<br />
<br />
<br />
<b>Why mainstream political ideas are worthless compared to UBI</b><br />
<ul>
<li> <b>Minimum wage</b>: accelerates drive to automation. Eliminating jobs and leaving many more desperate to compete with others, driving them to unethical service or behaviour.</li>
<li><b>Job guarantees</b>: Force people to do useless work, based on work ethic retardation. This leaves people too tired to develop themselves and/or produce something useful.</li>
<li><b>Infrastructure and government expansion</b>: Like the job guarantee, job-creation is the worst possible justification for programs or projects. All programs/projects should be proposed solely on inherent value. No one actually wants a job. They want the wage. UBI provides the job creation benefits while freeing up the time to do something useful or interesting.</li>
<li><b>Institutionalized retraining programs</b>: While there is a role for institutionalized education, large scale bureaucratic determination of your institutional attendance is far less productive than UBI. UBI should be enough to get a computer, internet, 3d printer (or other tool), and pursue independent study of your choice that may be more relevant and interesting to you and your goals. UBI should also be enough to enroll in structured education programs, without an institutional hand compelling you into them. A bureaucratic/institutional bias towards education makes education more expensive and less beneficial to the institutionalized.</li>
<li><b>appeals to inequality</b>: Raising income taxes is needed and effective. UBI doesn't reduce income inequality even if it eliminates poverty. The latter should be the goal. Shaming people into paying you more won't work. Violence towards the rich will get you exterminated.</li>
<li><b>Politically established channels for labour empowerment</b>: Labour needs to have power to take power. UBI gives them that power in that it is the privilege to refuse work, making it easier for those that want work to compete. But a fight to help unionization is a fight against more powerful forces, and a fight consumers side against. UBI is an individual's empowerment to collectivize or not collectivize in a way that does not impose the choice on the losers.</li>
<li><b>Minincome</b>: The sabotaged Ontario pilot that is designed to fail pays 0 net BI to those making over $34k, and includes clawback/deduction rates as high as 93% on some lower income brackets. Minincome forces the poor to pay for all of the costs of BI. High clawback rates force people to either work for nothing, or not work. Extremely counterproductive. The Ontario pilot further reduces the BI amount for couples, disempowering people from forming civil partnerships. Minincome has important <a href="http://www.naturalfinance.net/2013/03/basic-income-real-definition-and.html" target="_blank">"cheating" problems</a> as well. Only corrupt vermin attempting to promote other failures in this list as an alternative to UBI design such brainlessly destructive policies to vilify the poor for not having the work ethic to take jobs with 0 takehome pay.</li>
<li><b>Higher Daycare subsidies</b>: Meant to push people (women) into work, its not necessary under UBI. The UBI is the daycare fund, and you only need daycare if you are earning income. Though it generates tax revenue to force people into work and further daycare workers</li>
<li><b>Social housing and poverty programs</b>: has historically been a racist policy of ghetoization and poverty traps, that provide race bait resentment, that races other than their own are getting free stuff, despite the ghettoization, impoverishment and criminalization of those races. UBI empowers people to live where they wish, and racist supremacists should see no objection, since no race gets more, and they are already convinced that their race will naturally thrive more than the others.</li>
<li><b>Higher conditional (need-based) programs</b>: This is the fundamental problem with work ethic. They are conditional based on the pressure to stop needing aid, but it is simultaneously a poverty trap in that work involves loss of benefits. We don't need to force a work ethic on people because natural greed will ensure that, under UBI, people will work to take others' money.</li>
<li><b>Labour protections from robots</b>: automation is awesome when it saves you from doing needless extra work. That makes it awesome for society and businesses so that they not force you to do useless work, useless by definition, if an automated process does it more efficiently. Taxing business profits regardless of their level of automation captures the social value of automation, and those profits should be used to fund UBI thereby compensating all of those searching for useful endeavours. Protection from robots is a dead end policy in that international competitors will not force their population to do useless work, but will be able to sell useful goods at better value than what the wasteful slavery produces domestically.</li>
<li><b>Wait until the robots come before UBI</b>: is a recipe for exterminism. Even when the US significantly outperformed OECD peers over the last 8 years, a highly exterminist republican regime gained power. More tax cuts, and the necessarily ensuing economic destruction, is the only path they follow. Exterminism is just further along the same path. UBI while jobs are still available speeds up the automation path, but does so with economic growth and shared prosperity. Once you start down a path where Robocops guard Detroit concentration camps with the economic power comparable to famine stricken Sudan, its easier to dismiss the value of economic support to the group to the same level of famine stricken Sudan.</li>
</ul>
<b>Every idea other than UBI is terrible</b><br />
UBI maximizes social prosperity and liberty, empowers workers, lets everyone set the exact work-life balance they wish, reduces everyone's stress and their impacts on health and crime, and eliminates poverty. Only petty and evil power strugles to fight for a better outcome for their narrow slice of society would get in the way of this.<br />
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The work ethic counterproductive delusion is the widespread complicity to the power struggle agendas that are likely to lead towards mass extermination, unless the delusion is broken. Telling other people how awesome work is, just makes them compete with you instead of hiring you to do the awesome work.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com6tag:blogger.com,1999:blog-2467928492793719077.post-6241402654597035052017-02-01T13:04:00.000-08:002017-04-26T04:54:53.878-07:00Border adjustment tax and natural (cashflow) taxationRepublican House of Representatives are proposing the key element of a tax policy I've developed on this blog, and also framing it under the same philosophy of cashflow taxation principles. This proposal should be supported by progressives, humanists, economists, and international trading partners, even if it is flawed for failing to fully adopt natural taxation principles.<br />
<br />
<br />
<b>Reasons to support</b><br />
<ul>
<li>Border adjustments or cashflow taxation allows any jurisdiction in the world to unilaterally set their tax rates treating domestic and foreign production equally.</li>
<li>Higher tax rates subsidize production/investment and exports more than lower tax rates, thereby funding Universal basic income or refundable tax credits, and increasing jurisdictional competitiveness.</li>
<li>The alternative to cashflow taxation or border adjustments, to meet pissface's policy promises, would be tariffs. These are supplementary taxes paid by consumers instead of tax reform.</li>
<li>Reciprocal policies by global jurisdictions will mean minimal disruption, if it is through tax reform rather than supplementary tarriffs.</li>
<li>It permits greater jurisdictional autonomy within economic and state unions.</li>
<li>It eliminates the roots of all tax avoidance strategies.</li>
<li>Retailer/importer/consumer punishment scaremongering is false. Because other countries will copy the system in some fashion, importers /consumers will face similar pricing as foreign tax system subsidizes their exports. US Retailer lobbying is entirely related to keeping their advantage for cross border shoppers who face a VAT/GST at home.</li>
</ul>
<b>Border adjustment taxation is the gateway to the most progressive human development since the magna carta</b>. It would be a greater progressive achievement than the abolition of slavery or the advent of representative democracy because it empowers regions to unilaterally determine the balance they wish to establish between production output, consumer favouritism, and social programs, by the simple adjustment of a single business income tax rate. It will forever shut down the lie that lower business income taxes can ever motivate investment and production.<br />
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The regional control this empowers, directly empowers its human population to influence local policy to suit its economic interests in a way that democratic systems have never been able to achieve, and similarly, how the abolition of slavery was simply a minor shift away from oppressive hierarchical structures. Corrupt states and regions will feel forced to match policies of humanist policy regions.<br />
<ul>
</ul>
<b>Natural/cashflow taxation</b><br />
<a href="http://www.naturalfinance.net/2016/04/the-panama-papers-republicans-tax.html" target="_blank">The best paper on the subject </a>is I think easy to read and thorough, but still summarized as:<br />
<br />
<ul>
<li>Business tax rate based on jurisdictional cashflow. All spending and receipts is taxable to the receiver and refundable to the payer in the jurisdiction it (where the payer is) occurs. Investment inflows (such as loans or share purchases) are taxable to the business receiving funds, and investment repayments such as dividends are tax deductible to the business paying them.</li>
<li>A flat personal rate equal to 0% to 10% higher than the Business tax rate applies to personal income. Progressive taxation is achieved through a flat universal refundable tax credit (UBI) which creates negative taxes payable for low and middle income individuals.</li>
<li>A personal investment surtax 0% to 10% above the personal income tax rate applies to investment profits. This includes interest and dividends received, and may apply to rental profits.</li>
</ul>
<b>Border adjustment tax differences</b><br />
<a href="http://business.financialpost.com/fp-comment/jack-mintz-why-the-drastic-republican-border-tax-package-probably-wont-happen" target="_blank">A decent overview of the republican proposal</a> though with the usual media negativity slant on it. The proposal:<br />
<ul>
<li>immediate tax deductibility of capital investments is a partial though principal move towards cashflow taxation. The partiality causes incoherent elements in the plan such as not allowing interest payment deductibility.</li>
<li>Retaining payroll taxes is an unhealthy and unfair penalty on employment vs. other income. It unnecessarily discourages employment from both the employer and employee sides. </li>
<li>Its wrong to seek additional social revenue by forbidding interest deductibility as this uselessly depresses demand for capital. The investment profits surtax is an appropriate means of enhancing social revenue because capital can always voluntarily choose to be kept under a mattress to both avoid investment profits and their tax consequences.</li>
<li>The export "tax freeness" and import "non-deductibility" is not as disruptive as feared. Reciprocity of some sort by other nations, preferably through pure natural/cashflow taxation is going to mean that US exports are taxed overseas, and there is likely to be some reciprocal subsidy of exports that limits significant change in consumer prices.</li>
<li>Violation of WTO rules is unimportant. The WTO system sanctions the corrupt transfer pricing model, offshore sheltering, and tax inversion system. The US violating the WTO, gives the remedy of everyone else abandoning it for a fair system. Natural taxation does not violate the main WTO principle that domestic and foreign companies be treated equally.</li>
</ul>
<br />
The rest of this paper is going to detail why full cashflow taxation is better than border adjustments or tariffs.<br />
<br />
<b>BPI: 3 tax rates</b><br />
(B)usiness, (P)ersonal, and (I)nvestment flat tax rates are used. Each is greater or equal than the last.<br />
<br />
<b>Business tax policy has always been that of near 0 collections</b><br />
Since businesses all end in eventual bankrupty, lifetime tax credits equal lifetime taxes paid less dividends paid which are often undertaxed at the individual level. The tax code is complex only to allow difficulty in converting tax credits into cash refunds for businesses, but the complexity generates minimal social revenue.<br />
<br />
<b>Under natural taxation, business income tax revenue is 0 regardless of the tax rate</b><br />
Since all business outlays are a tax refund to the spender, and an equal tax obligation to the receiver, net social revenue from business income taxes are 0. Social revenue comes from:<br />
<br />
<ol>
<li>Private sector Salaries and wages generate P-B</li>
<li>Government salaries and wages generate P</li>
<li>Government and consumer purchases from business generate B</li>
<li>Personal Investment profits generate I </li>
</ol>
<b>A 0% or low business tax rate is a bad idea</b><br />
Even if it were to provide extreme reporting simplicity, and the same social revenue (assuming end user purchases taxed with a sales tax to cover point 3 above) as a higher business income, having both sides of a business transaction account for tax effects has important motivational factors:<br />
<br />
<ol>
<li> Higher tax rates encourage spending and investment (to avoid paying taxes) and significantly reduces the risk of business spending and investment (because of the certain tax rebate no matter the investment outcome) compared to lower tax rates.</li>
<li>An incentive to repay shareholders since that provides a tax reduction. It would not at 0 tax rates. The incentive generates social revenue at rate I.</li>
<li>A 0% business tax would raise 0 revenue from consumer purchases </li>
<li> Less disruption to price levels, Somewhat minor, but a 0 rate would be slightly deflationary rewarding the wealthy/prior savers on purchases. Though the business tax on consumer purchases may appear similar to a sales tax, the net price is the same as would be under current income taxes. The cost base of goods can be modeled as being after input cost tax rebates, and so the after tax break even prices are the same under all models and tax rates.</li>
<li>Having input credits and sales taxes allows for timing adjustments. For instance the tax bill and deduction for investments could be applied over 2 years under the assumption that not all of it will be spent right away. Limits on the percentage of personal (non investment return) income that is available to be deducted in any one year might apply. </li>
</ol>
<br />
<b>Job creation policies require high business taxes</b><br />
Lower taxes can motivate you to invest more of your time, but higher taxes motivate the investment of your capital/money for the simple reason that the investment provides a certain tax reduction. This exists under existing income tax system for the most part, but exists perfectly, and is clearly obvious, under natural taxation.<br />
<br />
In the case of time investment, the only rational consideration is the after tax expected income of a venture. Lower tax rates reduce the incentive to hire you at all, and so there can be downward pressure on the wage offered you. Higher tax rates reduce the importance of the wage, and the time/labour supplier can adjust their demands upwards to meet their after tax needs.<br />
<br />
<b>Why are pervasive lies in favour of lower taxes </b><b><b>perpetuated</b> to be an economic/social benefit ?</b><br />
Large successful businesses operate a profitable formula where nearly all investments are sure things that will lead to higher profits. Tax rates don't affect whether McDonalds will open a new store. The science of demographics and past experience, lets them confidently pursue new locations.<br />
<br />
Large successful companies have a profit momentum from investment made 2 to 50 years ago. Lower tax rates provide them with the opportunity to harvest profits instead of innovating and growing. Lower tax rates also discourage upstart competitors from the risky investments that might challenge their dominance.<br />
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Companies have zero concern for general economic growth and sustainability, but politicians and demons whore themselves out to advocate for their selfishness.<br />
<br />
Another important benefit of natural taxation is that companies obtain the natural tax avoidance process of repaying investors for a tax reduction instead of tieing up money offshore or through other avoidance schemes. Business profits are taxed in investor hands.<br />
<br />
<b>Higher tax rates on a border tax system or natural taxation encourage domestic production</b><br />
If it costs $100 (pretax) to make a phone in California and Alabama, and California has a 50% business tax rate, while Alabama's is 20% then:<br />
<br />
<ul>
<li>After tax cost to make in California is $50. In Alabama it is $80.</li>
<li>If the company wants to make $10 after tax on each phone, then it sells it for $60+tax from California, or $90+tax from Alabama. </li>
<li>The California phone would sell for $120 in California or $75 in Alabama.</li>
<li>The Alabama phone would sell for $180 in California or $112.50 in Alabama.</li>
</ul>
Every company's production is advantaged by being located in the higher tax state. There is no basis for trade disputes as <b>each nation or state can just raise their tax rates to be more competitive</b>.<br />
<br />
<b>Reasons to lower tax rates</b><br />
To invite retail tourism (or discourage foreign state tourism) is a main one. In above example people would visit Alabama to purchase their phone. If no one would hire your population no matter how high the tax rates/incentives, then lower tax rates would lower cost of living.<br />
<br />
The other reason to favour low taxes is to create misery and desperation so that it can be exploited for competitiveness. Often with an export context, but also to subsidize conflict: police, prisons, and military career choice. If Alabamans can be oppressed sufficiently to drive down the production cost (pretax) of the phone to $62.50, then it can be sold for the same price and profit in the Alabama and California markets as the California phone.<br />
<br />
<b>What to do with all of the tax revenue</b><br />
The only valid criticism of income taxes is what they are used for. An authoritarian deciding what's good for you. Basic income and social dividends is the best governance organization because it allows market solutions for everything, without poverty, and including a fair labour market where participants are not coerced by starvation or healthcare into submitting to the first offer made.<br />
<br />
<b>Crude border tax system is close enough</b><br />
It is better to replace the entire tax system than the limited border tax system which still maintains avoidance opportunities. But border tax adjustments achieve the main benefits. The white house's warming to this idea has focused on accusing Germany of leveraging its VAT system. This is better than VAT as it is not separate from the income tax system. Both have the advantage of unilateral settings, and total self reliance and responsibility for the economic results.<br />
<br />
<b>Payment processors as tax collectors</b><br />
International/online retailing is already prominent and rapidly growing. International adoption of this tax system will let online retailers price tax free, and payment processors including bitcoin options will simply add the tax based on the shipping address.<br />
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<b>Natural tax allows tax rates customized to postal code</b><br />
A 1 person UN department can maintain the system of tax rate updates. Postal code individualization may be too narrow, but there is no technical or even political reason not to allow it. Where narrowly customized tax policy makes sense is as part of a <a href="http://www.naturalfinance.net/2016/11/opposition-to-new-us-republican-control.html" target="_blank">tributary tax system</a> where sub regions contribute to larger associations<br />
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<b>California Secession alternatives</b><br />
Pissface is threatening the withholding of federal funds to California unless they form immigrant lynch mobs, and to prevent its rights to create regulation in addition to federal ones, specifically targeting its vehicle emission standards which would force Californians to burn more Oklahoma oil and cover the state in smog.<br />
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Secession is a human right. It must be an option to participate in a democratic union, because if it is not, then there is a complete absence of democratic voice by the enslaved possessed colony. Marriage without the option of divorce is slavery. The United States, when formed, created the appearance of a voluntary union.<br />
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Secession does not need to be isolationist. If in fact it is used in order to re-form a new voluntary union, then an alternative is to reform the existing union. Polarized politics in a powerful empire with slave possessions creates a risk of fascism, but always unnecessary unhappiness. Certainly, distinct red and blue Americas should be an alternative to forcing tolerance of opposing views.<br />
<br />
A constitutional convention could explore a wide variety of issues that many states are open to:<br />
<ul>
<li>State rights: gun rights and abortion laws are polarising national political issues. It is a small price to pay to let Kansas make the wrong choices in exercising their freedom if you are also allowed to exercise your own.</li>
<li>Interstate commerce and federal highway program: is a source of unnecessary leverage over state rights (state funding is often threatened over it). The highway system is already built. Transferring ownership of the highways to the states, and letting them fund them. New interstate infrastructure can be sponsored/negotiated by the affected states.</li>
<li><a href="http://www.naturalfinance.net/2016/11/opposition-to-new-us-republican-control.html" target="_blank">Tributary</a> and border/natural tax system: A concession to poorer red states is to codify that richer states will contribute more taxes to the common union. Ideally union contributions are spent almost entirely as a social dividend, but no matter how the federal/union surplus is spent, richer states would be contributing to union harmony where others success contributes to one's own success, though the only way for the stupid to grasp the obviousness, is through cash dividend entitlements. Using tributary funds as a social dividend also puts upward pressure on oppressed state's wages, which simultaneously maintains rich state competitiveness and popular support/harmony for the union.</li>
<li>dissolution of the union: The main appeal to most states would be to eliminate federal debt. obligations. But this doesn't have to be the objective of the convention. Rather, it can focus all stakeholders on the concerns states may have with the union.</li>
</ul>
Even if the goal is secession or dissolution of the union, a constitutional convention where discontent states offer nazi republican states permanent freedom and subsidized support as part of decentralization initiatives is the right opening move, is constructive, and may produce tangilbe solutions that pacify secessionists, but also address the discontent that sympathises with secessionist motivation, but fears unknown change.<br />
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A constructive and concessional constitutional convention process pacifies any strong reaction against secession or federal tax non compliance, and is a path to compromise.<br />
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<b>Immigration</b><br />
All<a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank"> immigration is economically constructive</a>, and unless ALL of the immigrants admitted directly compete for your job, increase your employment prospects. More people means more construction, teachers, medical, retail, and food production. More of those jobs leads to auto and yacht production, as wealth trickles up the capitalist hierarchy. Not all of these new jobs will go to immigrants.<br />
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That some states or societies wish to restrict immigration enriches the states and societies that won't. There is no need to argue economics against hate if the enlightened and hateful can both get the outcomes they want. The EU's surprising economic growth for 2015 and 2016 can be attributed to its large refugee influx.<br />
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<b>European Union</b><br />
Right wing stupidity threatens the union somewhat. Natural taxation's international competitiveness focused based on higher taxation rather than current available manipulations to send capital/profits to lower taxes jurisidictions allows a system based on race to the top rather than race to the bottom.<br />
<br />
Still, within the union, allowing poorer members to have a tax advantage (higher) in order to mitigate trade imbalances, and supporting union wide basic income is helpful harmonious policy. The main reason for the EU to lead on natural taxation though is that the US is threatening trade wars. Be proactive not reactive, EU first.... and any other slogans they use are all appropriate rhethoric. A natural taxation approach offers a better, though similar enough, alternative to border taxation. Since there is some necessary policy response to US action, the EU should both embrace and lead on natural taxation.<br />
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<a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank">Basic income can be implemented with nationalist citizen-advantages/privileges</a>.<br />
<br />
Natural taxation and tribute-funded union wide basic income/dividend is an ultra powerful and flexible policy tool that strongly promotes union membership and cohesion. There's no longer any complaints about Brussels controlling everything, if Brussels just pays all EU citizens for being part of the union. EU members with trade surpluses can let other members have higher taxes to help with both their fiscal problems, and trade/employment disgruntlements.<br />
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<br />
<b>Climate change and pollution</b><br />
The only possible successful action on climate change and carbon emmissions is a carbon tax. To ensure popularity of the measure, proceeds from the tax should be distributed as dividend, and it empowers citizens to use the dividend proceeds to make better energy decisions that let them avoid the carbon tax. A carbon dividend further mitigates other funding sources towards a basic income.<br />
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The Paris climate agreement is insufficient in that it relies on future carbon sequestration technology. No matter how awesome that technology turns out to be, it will involve a cost (without monetizable benefit) per ton of co2 to remove, and so eventually a carbon tax will need to be diverted to equal the sequestration cost. A dividend is useful to prime basic income, mitigate emmissions, and so buy time for technology magic to be developed.<br />
<br />
Without a carbon tax, nationalist impulse to destroy the planet for immediate profit doesn't go away. Denial is a human response of aligning beliefs with pocketbook interests. A <b>carbon tarriff</b> has been brought up as a response to the US withdrawing form its Paris agreement commitments, and it is an appropriate response to willful subsidy for planet destruction. Still, seriousness towards the Paris agreement goals requires carbon taxes.<br />
<br />
<b>Guns</b><br />
Inter state harmony and happiness is not a universal goal. Gun manufacturers thrive on misery, but more generally, destabilizing neighbour states through crime or armed government opposition, can be seen as competitive strengthening of neighbours. This is easily done through subsidizing gun access in the target jurisdiction.<br />
<br />
Basic income is a key policy in offering people with better life choices than engaging in gun violence, but anti-harmonious forces may still strive to disrupt your state. Cash for guns programs are likely great investment for protecting harmony. If the target is sure that its neighbour states are not doing a sufficient job in reducing the flow of guns in the destabilization attack, it can leverage its newly generated gun stockpile for cooperation under the implied threat of sponsoring a guns for toddlers program in their state.<br />
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The main key to interstate harmony is basic income, but alliances and treaties can replace an all powerful overlord guaranteeing safety from state sponsored conflict./aggression. A large enough alliance is in fact equivalent to a protective dictatorial overlord, but alliance membership <br />
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<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com13tag:blogger.com,1999:blog-2467928492793719077.post-54410218091594173062016-11-13T14:43:00.000-08:002016-11-14T09:41:06.461-08:00Opposition to new US Republican control: State secession movementsI believe if the election were rerun 24 or 48 hours after, the democrats would win the presidency and senate. Low democratic voter enthusiasm caused low turnout. Media assurances that this was a sure thing for the democrats depressed turnout. African American turnout was especially low, and in a the close election in many states, moderately higher turnout would have resulted in the media anticipated victory for HRC.<br />
<br />
You may skip election judgement ranting, by going to OPPOSITION STRATEGIES<br />
<br />
<b>Trump's racism</b><br />
The real estate industry is the primary conduit for persisting racism. Racists are attracted to the industry because it gives them control over who is allowed to live where. Good neighborhoods and good schools need to exist within a reference frame of bad neighborhoods.<br />
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The "Birther" attacks on Obama were clearly a violently passionate attack that could only be believed if first a gut instinct that he's an illegitimate President is held, and then latching onto any theory.<br />
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The "Central Park 5" (Black accused murder/rapists) opportunity so motivated him that he rushed to take out newspaper ads to address/raise awareness of the "nigger problem". Even after they were found innocent (someone else found guilty), he insisted on continuing their demonization, certainly because of the "greater problem" that seemed more important to him.<br />
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<b>Trump's stupidity</b><br />
Having a college education not only implies a minimum level of intelligence to gain admission, the process also exercises your thinking and gives you enough background information to absorb and understand the world for the rest of your life. Its normal for people with little understanding of issues to have very strong opinions about them, because they feel better about themselves after thinking they grasp a single advantage or disadvantage, and relieved that they no longer need to strain themselves to consider other aspects.<br />
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I'm surprised to hear that Trump has a degree from Wharton. Though not surprised that it is asterixed by either no attendance or potential falsehood (<a href="http://fortune.com/2015/08/14/donald-trump-wharton/" target="_blank">no classmate found that has any memory of him</a>). <br />
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Being against the Iraq war, but also critical for not confiscating the Iraqi oil is childish stupidity. Simultaneous criticism of excessive and insufficient evil, and a failure to recognize that the true evil he seeks, requires partnerships on the ground, and the oil is payment for their service.<br />
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Torturing children until their parents admit to being terrorists is a mental deficit indicative of racist dementia. A college education prepares you to consider the possibility that the tortured tell you what you want to hear to make the torture stop. (Something he would know if familiar with Central Park 5 case).<br />
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Fundamentally, "lacking temperament to be president" is the combination of hate, stupidity, violent impulsiveness, and cautiouslessness (bankruptcies) he's demonstrated. Power doesn't increase reflection.<br />
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<b>Trump as an establishment puppet </b><br />
His transition team are establishment professionals. He refined his campaign tax plan to match Paul Ryan's. During nomination political bargaining, he reportedly offered Kasich the power to administer the whole country to be on his ticket, suggesting he has no desire to govern.<br />
<br />
During his first day in Washington's press conferences, his body language was defeated. Paul Ryan had a genuine (non politician) beeming smile in total control. Trump, an exceptionally talented liar, instead of having an emotional lift from winning, is showing emotional diminishment from knowing he has to walk back the lies, and is submitting/cowering to the establishment.<br />
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Saudi Arabia's <a href="http://blogs.barrons.com/techtraderdaily/2016/11/10/twitters-best-days-are-in-front-of-them-saudi-prince-alwaleed/" target="_blank">Prince Alwaleed beeming enthusiasm for Trump's victory</a> is indicative of the bipartisan establishment's commitment to Saudi Arabia's middle east destabilization interests, and threatens the Iranian counterbalance and peace progress made by Obama. Trump's natural love for the military ensures welcoming any invitation for greatness the world establishment provides him. The swamp is swampy because greater people than him got drunk in it.<br />
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The Republican establishment seeks only to destroy America. A collapse into a police state that serves the wealthy, and job creation only in the form of desperate people sucking dick for a blanket.<br />
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Any Trump benefit of being an outsider independent of the swamp's financial control, such as detente with Russia, or any attack of HRC's progressive agenda due to beholdment to the establishment, is completely lost if he sinks into the swamp on the first day. Obama, and the democrat agenda, made minimal progress against the Republican's destruction agenda over the last 8 years, but the US did significantly better than its European peers, and the administration should get a passing grade for recovering from Bush's economic destruction.<br />
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You can't simultaneously politically attack artificial low interest rates, and the economy. Dumping of US bonds post election is not a sign of anticipated economic utopia. The hamster wheel economy depends on maintaining housing prices. Higher interest rates will depress that market, and the dangerously high car production that has been financed through subprime in the last 4 years (over $1T in outstanding auto loans).<br />
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A 3/10 on the Idi Amin scale (corruption/self-enrichment) democrat candidate would have been preferable to a 7/10 on the Hitler scale (hate and megalomania). Republican establishment control over him may mitigate the overt Hitler factor, but snapping temperament issues, and ultimate authority to act upon them, must remain a concern.<br />
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<b>OPPOSITION STRATEGIES</b><br />
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<b>Democratic Establlishment</b><br />
Midterm elections in 2 years are already being focused on. Even if they are unable to stop destruction, they can vow very strongly to undo destruction. This is key in both eliminating the extent of destruction and preventing the private commitment to any passed destruction initiatives.<br />
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It is natural to worry about democratic party impotence. If the Democratic establishment wants any credibility and faith in its opposition to Republican control, Obama should at least make a recess Supreme court appointment.<br />
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<b>Climate change issues</b><br />
Dirty Coal is a dead technology that is uneconomic. Clean coal is even more expensive and uneconomic. All rhetoric designed to appeal to coal worker voters were outright lies, unless there are plans to nationalize and subsidize the industry beyond simply allowing complete environmental destruction.<br />
<br />
Pipelines are 40-100 year payback projects. The oil economy will not last that long regardless of Republican policy. Democratic party assurances that all private investment in new pipelines will be made bankrupt the next time they have the authority to do so, should effectively nullify any destructive approvals of pipelines or coal mines.<br />
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The same stance will have some effect in limiting the destructive financial deregulation follow through, that republicans are salivating to inflict.<br />
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<b>Tax destruction</b><br />
A bill to criminalize deceptive and false economic theory, basically everything Larry Kudlow ever comments on, but most specifically that lower corporate taxes would increase rather than decrease growth, might stop the economic destruction of America. If it doesn't stop corporate tax cuts, it will at least serve to link them to the economic destruction that results. This is a corporatist media problem, but republican zombification of Americans towards corporatist subservience and economic destruction is easy when the lie goes unopposed.<br />
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While corporations pay a low percentage of total government revenue regardless of their tax rates, the simplest way for them to lower taxes paid is through any form of spending or investment. The higher the tax rate, the greater tax reduction they receive and so the lower the risk to investment or hiring. Low corporate tax rates only benefit successful companies with sure profit formulas. McD opening a new restaurant or Apple developing iPhone 11 are sure profits, unaffected by tax rates. Real risk taking investment is encouraged by higher tax rates that mitigate the cost of failure. End of year purchase decisions for successful small businesses are encouraged (economically stimulative) by high tax rates. A 50% tax rate is equivalent to a 50% discount on new computers, office furniture, or hiring additional sales staff.<br />
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<b>State secession movements</b><br />
Secession is first and foremost a bargaining position. Freedom only exists if you have the freedom to walk away. The ultimately true and resonating Brexit argument was that there is no valid insistence on submitting to Belgian rule. In an atmosphere of threatening to tear up international treaties and agreements, national agreements should also be up for negotiation.<br />
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<b>California Leadership</b><br />
Leadership by California opens up similar opportunities in other, especially Blue, states. Clear opportunity for the west coast to unify. Clear opportunity to unionize with Canada, and clearer opportunity for Atlantic and great lake states to join the new stronger union.<br />
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<b>Friendly secession</b><br />
California will still buy red state corn, and happily sell them tech and entertainment. Red states will have complete unimpeded freedom in setting up an exploitation and prison economy, and can expel their liberal faggots, and fund all the wars they crave. Red states can protect their empires of dirt. Even if I/we advise that cooperation and trade leads to greater opportunity and wealth.<br />
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The appropriate answer to divisive politics is divorce. Not submission to the winner. This approach provides the ultimate freedom to both/all sides to organize their lives and economy as they wish.<br />
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It would be less friendly to point out that Red states are economic leeches that receive a net transfer of tax revenue from productive America, and may be unable to fund every war that would bestow them greatness.<br />
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<b>California's power</b><br />
I believe most people in most states would prefer to be in a union that includes California than the one that excludes California. If California takes an inclusive stance towards a union with other states who'd prefer not to submit to federal republican rule, the secession initiative will receive significant support among US state populations and Canada.<br />
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In terms of the establishment California political system, this should seem like an opportunity for enhanced power and relevance that they should want to seize.<br />
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If the old politicians cower at the proposal, it can be a midterm ballot initiative.<br />
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Other states could offer ballot initiatives of solidarity with California's decision, if they are concerned about seceding alone. <br />
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<b>Secession is awesome</b><br />
Most Trump supporters commenting on California's secession offer the encouraging "good riddance". So we can all be happy. Self determination is the most compelling argument, but another outcome is a new union that includes all 50 states, but with looser or different association contract. Technology and ethics has advanced sufficiently in last 250 years to reform democratic unions.<br />
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The new union, and alliances with previous unions can be as close as each wants. I have a solution that enhances independence and freedom of association members, which can also be implemented unilaterally though still friendly. <br />
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<b>Natural taxation - Cashflow based business income taxes</b><br />
Business Sales are taxed, and expenses and salaries refunded, in the jurisdiction they occur. Investments received, and repayments made, taxed in business HQ's jurisdiction.<br />
Personal income is taxed at the same flat rate as business tax. No payroll taxes. A refundable flat tax credit (potentially equivalent to basic income) creates effectively more progressive income taxation than current systems. There may be an investment profit surtax, high income surtax, and limits as to the tax deductibility of new investment from employment/business income. <a href="http://www.naturalfinance.net/2016/04/the-panama-papers-republicans-tax.html" target="_blank">Longer details and justification of tax plan</a>.<br />
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The key benefit of this tax system within alliances and unions is that higher tax rates strongly reward employment and other investment within a jurisdiction while compensating the societies that businesses sell to. The more a jurisdiction wishes to attract business investment/employment, the higher the tax rate it should set.<br />
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The proper response to any neighbour or trade partner objecting to your region's natural taxation, as some sort of unfair advantage, is to adopt it themselves. <br />
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<b>A tributory tax system for a federation/union/association of regions</b><br />
Regional/association unity is best enhanced by a tributory tax that is a percentage of each region's tax revenue (say 10%) kicked up to the federation's budget. While a federation has budgetary needs for common military, food/resource/energy security, and inter-regional infrastructure, its tributory budget should fund only a common revenue service and basic income/citizen's dividend.<br />
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The funding for the federal budget should come from a poll tax/reduction of citizen's dividend, thereby encouraging only efficient and justifiable projects are funded. A federation carbon tax, if any, should directly increase the social dividend.<br />
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The tributory tax system does have successful members contribute more than less successful members. This serves as economic insurance, but also enhances the alliance economy as a whole by improving market access, and overall development.<br />
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A rich area may not have the geographic advantage for a solar or hydro energy project. Federal assistance in incubating such projects and in electricity distribution networks can facilitate energy security and trade.<br />
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Under tributory tax system funding citizen dividends, regions fund whatever empires they wish for themselves through their own funds. The federation is relatively weak and only able to fund justifiable projects. Regional independence is maintained because of this, while unity and cooperation facilitated.<br />
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If Nevada can make an argument that the federation very much needs a large desert solar plant it can sell the project/venture more persuasively to citizens if it offers to put up a significant portion of the costs.<br />
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<b>Seperation of assets and liabilities</b><br />
Like divorce, there is a separation of assets and liabilities in friendly secession. Military assets are likely to be the most touchy. An honest proposal at a fair separation enhances the friendliness of the secession, though since there are more liabilities than assets, a negotiation breakdown would harm the incumbent union more. In my opinnion, an honest and fair secession proposal cannot be met by military violence without expressly acknowledging the slave status of subjects to the king. King succession through electoral games does not weaken the king's power, exposing the weakness and inadequacy of the piece of paper (constitution) we tell our children gives us freedom.<br />
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<b>Friendly secession</b><br />
A successful region that wishes more independence will face less resistance by offering union and federation with its neighbours under terms that include the successful members paying more into the federation than the less successful members. Doing so invites union and alliance, and enhances the friendliness of secession, and the opportunities that become visible to all. This also weakens militarist destructive impulses of the incumbent. If all of its members are more interested in joining the divorcing party than in destroying it, they are more likely to seek reform in their own union membership. They can even view paths to reform that are purer to their ideals and free from compromise with political opponents.<br />
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<b>Comprehensive opposition strategy</b><br />
The democratic party establishment will do their part, but their only current power is threatening action the next time they achieve power. The rest of us should not submit to these high stakes electoral contests for dictatorial control, or rely on the success of the democratic party opposition. The loud discussion and planning of independent alternatives, may be most effective in mitigating destruction and evil.<br />
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One natural concern is that if red states are no longer supported by blue state tax revenue, they will have no choice but to rape the environment and planet out of desperation, perhaps turning to North Korean style militarist brinksmanship.<br />
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DPRK is the way it is due to imposed isolation forced upon it. For this reason, friendly/inclusive session should be discussed. Reforming the USA into a new union that includes all current states is the best and only way to drain the swamp in Washington that the political duopoly is incapable of relinquishing the power inherent in the swamp.<br />
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In reforming the USA (into new constitutional arrangement), and using the tributory tax system, there may be more sway in convincing poor states that additional oil development is both uneconomic and destructive.<br />
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The uneconomic argument is not only reliant upon properly assessing environmental and planetary damage costs, but also in failing to recognize cheaper and more efficient energy in the present and very near future. Even 10 year payback projects are a failure if oil is dead in 10 years. It should be. The rush to invest now is reminiscent of the <a href="http://www.naturalfinance.net/2015/10/whale-oil-history-as-incentive-to.html" target="_blank">race to exterminate whales in the 19th century</a>. Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com6tag:blogger.com,1999:blog-2467928492793719077.post-69797876151120953772016-11-09T10:22:00.004-08:002019-03-27T09:28:17.626-07:00Nationalism and Basic income<br />
<b>Team-ism: The positive of nationalism</b><br />
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Wishing for success and happiness of your team members, possibly hoping (though not requiring) that they share that success with you, is certainly good for the team. Humanism is team human, and teamism is not inherently evil. Cooperation beats individualism, and success of the team (or member) means there is more available to share or trade with all team members.<br />
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<b>The propaganda of teamism</b><br />
Lectures and advice about teamism is exclusively about you needing to pass the puck more to the people of the lecturer's choice. You making sacrifices for the team leaders. In nationalism, the media message is dominated by politicians and others high in the hierarchy who can control the media.<br />
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Nationalist resentment is a method of harnessing stupidity and hate by directing it away from social dominants. This point will be explained later in the paper, but there are 2 fundamental choices the wise and smart can interact with the childish and stupid. Either teach them the truth, or sell them lies. The latter has significant profit opportunity.<br />
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<b>Nationalism as protection from competition</b><br />
The dominant rationale of nationalist protectionism is the appeal to the protection from competition. This neglects the opportunities created by trade and immigration. Specifically, you cannot possibly feel threatened by everyone of these groups:<br />
<br />
<ul>
<li>Strawberry pickers and other ultra low wage agricultural "foreign workers"</li>
<li>Domestic and gardening servants</li>
<li>Parking lot day labourers</li>
<li>Street food and convenience store employees.</li>
<li>Skilled blue colar work</li>
<li>Skilled white colar work, software and tech workers.</li>
<li>Doctors, and other healthcare workers</li>
<li>Foreign high end home buyers.</li>
</ul>
If you hope to be a strawberry picker when you grow up, then as long
as the immigrants allowed in come with a mix of skills and job seeking,
then you gain more opportunities for work than get threatened by
competition for work. <br />
<br />
<br />
For the blue collar worker most susceptible to protectionist and hate propaganda, immigrants typically offer little to no competition to their field. For those who work in lower paid fields, there is only opportunity created for everyone else, as every penny they receive is paid out to fund other people's work, and more food and housing and other services is produced to let them survive. Even if you see no direct profit from immigrants' presence, those that do directly profit buy better homes, cars, and other stuff... which you may assist in producing.<br />
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For those immigrants who work in higher paid fields, they can directly cause increased consumption of better homes, cars and other stuff, and so overall, there is much more opportunity than competition created by immigration.<br />
<b>Slavery is awesome</b><br />
Slavery produces consumer benefit of lower prices, and master's benefit of control and power and production capacity. For the non slave, slavery whether robotic or mexican, frees them from doing the slave's work. We could have full employment, if we outlawed the mechanical distribution of water and energy through pipes and wires, and instead forced human labour to collect and deliver it. Full employment but with a standard of living closer to subsaharan Africa, and difficult to justify urban centers.<br />
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Immigrants usually earn lower wages than nationals, and the perceived threat from immigrants is quite similar to house slaves fearing encroachment from the field slaves. A fight among the slaves for the crumbs of servitude. For those who understand the awesomeness of slavery and servitude, that is the fight they want you to take, the framing they want you to see you define your problems.<br />
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Oppressing immigrants and ethnic and racial minorities, depresses their income potential, and increases their desperation to fill a servitude position or to resort to criminal activities on a unionized/gang scale. If eradicating immigrants is successful (despite your masters craving more of it), then those seeking the advantages of slavery will be compelled to relocate where labour can be more easily oppressed.<br />
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So, if you feel threatened by the oppressed, then you are necessarily oppressed yourself. No one points out the opportunities that the oppressed create for you, only the threats you should imagine. Nowhere in the world has ever shown success through a declining population.<br />
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Many people appreciated this article: <a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html" target="_blank">Most people support slavery </a><br />
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<b>1000 new people in your country </b> <br />
This analysis also applies to, the reverse, removing 1000 people. 60% of non-senior adults are employed. <a href="http://www.bls.gov/emp/ep_table_201.htm" target="_blank">The general breakdown by industry is linked here</a>. If all new people subsist on welfare, then 600 new jobs are created to serve their survival needs. Those who profit from exploiting the poor, trickle up their proceeds into luxury goods purchases. Both high end and low end consumption increases. More people also means higher prices for energy/natural resources and food and housing, which attracts more employment in those sectors (higher commodity prices offer greater profit opportunities and more pursuit thereof).<br />
<br />
1000 fewer people actually creates more than 600 job losses. Deflation in commodities causes substantial disinvestment in those sectors. Empty housing halts new construction. Disemployment causes more disemployment. Nowhere in the world or in time will there ever be economic growth accompanying population decline.<br />
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<b>$1M in increased Chinese GDP/wealth</b><br />
China imports 5% of its economy, and another 5% in net capital outflows. Its growth has fueled high commodity prices which has kept US employment in those sectors high. The capital outflows has propped up housing and stock markets. These benefits primarily flow to rich Americans, but while rich Americans doing well absolutely does not trickled down as a broader benefit, it does prevent economic collapse that does trickle down. The raw imports number does mean that $1M in increased chinese economy does create 1 foreign (to China) $50k job. A bit more than that due to inflationary pressure in commodities. $1T in increased Chinese economy directly creates 1M foreign jobs. $50B in foreign (to China) investment, which is money going to people in your nation.<br />
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<br />
<b>Balanced trade vs. higher trade</b><br />
Considering 2 proposals:<br />
<ol>
<li>Trade balance of $10B exports and $10B imports</li>
<li>Trade deficit of $100B exports and $150B imports.</li>
</ol>
Although nationalists would fan resentment over the 2nd scenario, that one includes $90B of additional job/wealth creating national value (excluding addtional distribution and retail work/value). Intangible consumer value is also much higher. You are much more likely to be happy and buy a $300 TV than a $1000 TV.<br />
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<b>Trade protectionism</b><br />
International trade benefits you through lower prices, and retributory opportunities of access to trading partner markets. As a consumer, it gives you more choice.<br />
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As an affected worker, you may wish that your job is perpetually protected, but such protection comes at the expense of others' opportunity, and all consumers choice and value.<br />
<br />
More importantly, today's and tomorrow's threat to your work is not globalization, but instead automation. This too is more opportunity to more than threat to some. We further all want to free ourselves from work that is by definition (mechanization more efficient than manual) unnecessary. So, insisting that others be forced to hire us breaks with any principles of justice and fairness we would want to enhance.<br />
<br />
Basically we cannot principally object to the rich corrupting protections for their empires of gold, if we insist on protecting our empires of dirt. <br />
<br />
<b>Nationalism as capturing hatefulness</b><br />
A hateful person is going to feel resentment towards someone that outcompetes them for their ambitions regardless of the ethnic makeup of that competitor. Nationalism provides a socially expressible way for people who hate everyone all the time, to rally around other hateful people.<br />
<br />
Politics can successfully achieve popularity by selling you the lie you want to hear.<br />
<br />
Hatefulness is fundamentally a product of environment. You live in a harsh world where the only political options you are likely to know about are having to <a href="http://www.naturalfinance.net/2016/05/moral-inversions-fair-markets-and.html" target="_blank">seek permission from capitalist assholes or socialist assholes.</a><br />
<br />
<br />
<b>Unconditional Basic income (UBI)</b><br />
is a cash payment paid to citizens and tax payers that is a necessarily affordable tax cut the higher the basic income amount because the higher the UBI, the more existing programs can be cut, and so more "tax disbursements" (refunds) are made than taxes collected. The simplest implementation is as a refundable tax credit.<br />
<br />
<b>Basic income as freedom from servitude</b><br />
Servitude as an employee has provided over the earlier part of the last 75 years, tremendous opportunities for income security that permitted a fulfilling lifestyle. The desire to idealize and protect those lifestyle opportunities is natural.<br />
<br />
UBI does not prevent you from accepting employment in any way. Contrary to welfare system, no benefits are taken away from you when you earn more income. A fearmongering stupidity critical of UBI is that it may promote laziness.<br />
<br />
The freedom of others to choose not to work is a significant benefit to anyone who seeks work. Less competition for work directly enhances your bargaining for servitude positions. That more people have the funds to purchase goods and services ensures that more work is available to try to take all of their money.<br />
<br />
Furthermore, UBI makes it much easier for you to attempt to start your own enterprise. You can survive without immediate profit.<br />
<br />
Even if no new opportunity given to you through UBI appeals to you, there is no reason to deny it to others. UBI improves your pursuit of an employee lifestyle, decreasing your competition, and increasing the supply of potential employers.<br />
<br />
<b>UBI makes competition easier and more profitable</b><br />
That work is awesome and fulfilling, and lets you afford nice things should be a secret that you try to keep away from the masses. The lazier and rejecting of work the rest of them are, the easier it is for you to get to do it all and take all their money in exchange. <br />
<br />
<b>Easier competition reduces unethical and criminal behaviour and hatefulness</b><br />
Labour (and work/entrepreneurial) markets that are free of the oppression of starvation/survival as a method of forced participation, reduces the ruthlessness and hatefulness that is conditioned into those whose life is a survival challenge<br />
<br />
An easier life allows individuals to place higher weight on ethical concerns, and the harm, danger and repercussions.of criminal choices.<br />
<br />
UBI allows a reactionary attitude to job displacement as "oh well, someone or something else is doing the work so that I don't have to. I'll just do something else." instead of promoting hatefulness.<br />
<br />
<b>Basic income as nationalist policy: Citizen's dividend</b><br />
The simplest recommended implementation for basic income is through refundable tax credits. This is a tax filer benefit independent of citizenship. A citizen's dividend is specifically a benefit only for citizens. The reasons leaning towards making it a tax filer benefit are:<br />
<ol>
<li>Immigrants pay taxes too.</li>
<li>Our team can mostly be defined as those who choose to live here.</li>
<li>Poverty programs designed just for special groups have nearly the same expensive bureaucratic overhead, and are recipes for manufacturing ghettoization, crime and hatefulness.</li>
<li>Nationalist/racist resentment of welfare is tied to benefits going to groups that they perceive exclude them. Asset tests and other conditionality for welfare often prevent you and your family members from receiving the same benefit. A refundable tax credit would eliminate the stupidity of Bill Oreily explaining to you how much more privileged the poor are compared to your (rich) group.</li>
</ol>
<br />
<b>mix of tax filer and citizen benefits</b><br />
The simplest mix of benefits are a basic fixed amount, and a supplementary variable citizen's dividend paid from a targeted surplus, and dependent on society's economic success and tax revenue.<br />
<br />
<b>Life accounts or Unconditional Loan Income (ULI)</b><br />
<a href="http://www.naturalfinance.net/2016/06/life-accounts-previously-refered-to-uli.html">Life accounts</a> are like student loans, but without the conditionality of spending the funds on education. Recipients can use the cash anyway they like. Repayment is through income based royalty administered through the tax code. Features include:<br />
<ol>
<li>Low interest rate of 2% or less.</li>
<li>An annual new loan withdrawal limit of $5k-$10k. </li>
<li>Maximum outstanding balance (~$100k) that either reduce or eliminate the annual new loan amount when the cap is reached.</li>
<li>10%-15% of income repayment rate while an outstanding balance exists. So no repayments are owed if no income is earned.</li>
<li>To help overall funding, those with no outstanding ULI balance (usually rich through previous full repayments) can pay a 3%-7% income surtax </li>
</ol>
ULI as a social investment is extremely similar to UBI. A personally accountable income royalty replaces a general income surtax. But rather than faith in higher future tax revenues as a result of investing in citizens, the personal life account makes a direct connection between personal future funding of your own past benefits. The loan program is likely to have a moderate loss, but its a lower accounting loss than marking UBI as an unrepayable gift. Many of the loans will be repaid, and the interest and surtax on those who do not have life account balances makes up the funding shortfall.<br />
<br />
Compared to UBI, ULI does mean slightly higher clawback/surtax rates, because spectacular home run successes (ex: Mark Zuckerberg) only repay their loan amount + surtax instead of an extra $1B in taxes under UBI. The latter pays for 75000 people's UBI who make no contributions to society.<br />
<br />
<br />
<b>Life accounts and nationalism and the politics of UBI</b><br />
UBI is said to be pollitically difficult only because politics are dominated by hatefullness and protection of lobbyists. UBI provides a tax cut to 90%, the greatest possible leap in human freedom and economic growth, and so greater after tax income to 95%+, and elimination of poverty and servitude.<br />
<br />
The only objection to UBI is protecting lobbyist and rulership empires, and the irrational value of the objectives of hatefulness to others over one's own prosperity and freedom. Structured servitude and international competitiveness are economic and political theories that justify manufacturing hatefulness and revering empires (more on this next section).<br />
<br />
ULI acknowledges the entreneched politics of hate by attaching
individual accountability to basic income. It becomes an easier
introduction to UBI. The model of UBI personal successes paying for
"failures" becomes more evident with the inherent trackability of past
ULI access.<br />
<br />
But the key takeaway from this and following sections is that basic income and life accounts can serve and be structured to serve nationalistic populist objectives better than nazi mexican hunting parties or hate-fulfilling political promises that your troubles are caused by slaves more oppressed than you.<br />
<br />
<b>Structured servitude</b><br />
Servitude is systemically structured in order to ensure an abundant supply of soldiers, servants and minions. The masters use the strongest language of freedom, because unlike slavery, structured servitude provides a security/resentment free illusion of freedom..<br />
<br />
Conscripted soldiers are the closest class to slavery as they give up autonomy towards life preservation. More generally, the culture of employee status seeking, through tying health and family-permitting-stability benefits is the main form of structured servitude. Welfare systems guide the poor towards servitude.<br />
<br />
Client-supplier/contractor relationships are not the servant system. Supplier/contractors can value freedom over the security of servitude. They can still struggle financially, but that struggle occurs somewhat independently of the systemic structured servitude that is inflicted on society as a whole.<br />
<br />
Most people support slavery and structured servitude even when they are near the bottom of the pyramid. Its entirely stupidity and the acceptance of lies that drive it, but the good news is that the masters no longer need to systemically structure servitude. Foreign policy and murder can be asserted in the comfort of one's own pajamas (drones), and structuring desperation such that work paying $8 or $15 per hour is begged for is no longer necessary if machines can do it for $1 or $5 per hour equivalent.<br />
<br />
<b>International competitiveness</b><br />
Structural servitude and oppression at home is meant to keep wages low, and labour competition and desperation high. This enhances employment and profit for those who control work.<br />
<br />
An easy way of enhancing international competitiveness is to lower the national currency value. This forces lower real earnings for everyone in the nation. If this is something anyone actually wants, then that person could instead individually request or accept to be paid less. If the US as a people want to produce socks and underwear for the Chinese, they can achieve that goal instantly through a 90% currency devaluation. Few people would be able to afford a cell phone, but you might also put your children to work in coal mines to earn enough to get one. The view on work that gets lost is that having others make your underwear is a position most children would genuinely prefer when they grow up. If you resent Mexican gardeners and housekeepers, currency devaluation can give you the opportunity to emigrate to Mexico to serve Mexicans.<br />
<br />
International competitiveness and oppression of the local labour force is the main reason to oppose UBI. Differential tax rates have 0 effect on globalization. Exploiting desperation is what drives manufacturing or international service production decisions, and UBI reduces local desperation levels and puts upward pressure on work conditions and income.<br />
<br />
These policies benefit less than the top 1%, but its easy to scare people into subservience and enhanced desperation. Structured servitude, and a harsh world, provides you with your place in the hierarchy and visibility for the next rung up and down, and so visibility for the behaviour to strive or avoid.<br />
<br />
<br />
<b>Protectionism</b><br />
Trying to force purchase of nationally pure labour is a stupid myopia that misses the new opportunities created by new money and people comming in, money staying in, and serving the needs of new people. Forcing higher priced local labour, increases the cost, and limits the selection, of purchases, and necessarily increases overall poverty. If a foreign good can compete with a local good despite the transportation costs involved, then protectionism forgoes the better option, and also eliminates the extra transportation and distribution jobs created by competition. Retaliatory protection eliminates export jobs, and the associated distribution, and lessens economies of scale benefits (products cost and price) for larger local and international production demand.<br />
<br />
<b>Bringing the jobs back</b><br />
Even if you forbid foreign slavery and exploitation for protection of home markets, globalization will still be tempting to better access foreign markets. If forced to produce local consumption at home, heavy automation is likely to be pursued to ethically keep the benefits of slavery without any responsibility for harm to any individual. Without UBI, this causes a poverty spiral where increased desperation unable to find employment sinks consumer spending and business revenue and profits and employment.<br />
<br />
The only jobs politicians create is through, often wasteful, direct government employment and spending. The US and Obama were doing much better than international peers in maintaining employment. The art of the deal involves great sincerity when lying to people filling them with hope for what they want to hear. Lowering taxes on the rich and corporations, will not help coal and steel companies that are not making money. It will lead to all companies reducing expenses and investment (a tax deduction) that have any uncertainty to their profitability. Enhancing profits only for the most successful companies that know ahead of time that they will get a positive return on their investments.<br />
<br />
Begging politicians to create or flatter you with the promise to create jobs for you is not the right request. You want the pay/money of a job. With that money, you can create your own work, or help someone else that creates their own work. Its up to 300M people with the power to create work/jobs instead of at most a limited number of uncaring officials.<br />
<br />
Trump's domestic economy plans, unimpeded by congressional opposition, are a worsening of GW Bush's policies that, we are told, brought civilization to the brink of economic collapse (just domestic policy. Excludes more liberal use of nuclear weapons, child torture, and wars for the express direct pillage of oil). Hoping that the art of the deal was BSing republican elites in his support for the enslavement of Americans was the real con, is a long shot on the day after the election, and the unification platitudes speech writers always present.<br />
<br />
<b>Solutions with some Libertarian, Republican and Trump appeal</b><br />
<ul>
<li>Flat tax combined with universal refundable tax credits (UBI)</li>
<li>Equal high corporate and personal tax rate </li>
<li>Elimination of payroll taxes.</li>
<li>Territorial tax system. Revamping international tax system to tax sales where sold. Expenses (deducted) where spent.</li>
<li>Cashflow based taxation to eliminate all avoidance</li>
</ul>
These policies would tax people and companies based on the profits that they extract from society. Exporters are subsidized with tax rebates for what they spend locally, enhancing job creation. Foreign companies are taxed on the full sales price (instead of just profit) of the goods they sell to us. This is a better solution than tariffs because it enhances trade and global work/value while compensating the nations with trade deficits. It significantly enhances investment in small and uncertain businesses by simplifying tax refunds if the investment fails. <b>Protectionist sentiment is best served through higher rather than lower taxes.</b><br />
<br />
Importantly it also allows a union of independently governed states and regions to unilaterally apply tax rates in their own interests, with the trade and work effects they prefer.<br />
<br />
Basic income/refundable tax credits creates smaller government while eliminating poverty and empowering real freedom, including not impeding great wealth from being accumulated without permission or cronyism, and despite any high tax levels. Supposed libertarian goals.<br />
<br />
More details on the tax plan:<br />
<br />
<a href="http://www.naturalfinance.net/2012/04/natural-corporate-tax-policy-refined.html" target="_blank">Detailed Overview</a><br />
<a href="http://www.naturalfinance.net/2016/04/the-panama-papers-republicans-tax.html" target="_blank">Focus on how it eliminates international arbitrage</a><br />
<br />
Basic income rationale and funding :<br />
<br />
<a href="http://www.naturalfinance.net/2016/05/refundable-tax-credits-introduction-to.html" target="_blank">Refundable tax credits and financing overview</a><br />
<br />
<a href="http://www.naturalfinance.net/2012/06/imperative-need-for-social-dividends.html" target="_blank">Philosophical justifications</a> <br />
<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com7tag:blogger.com,1999:blog-2467928492793719077.post-42726944887893897592016-08-05T08:47:00.000-07:002016-08-05T08:47:35.751-07:00Linkedin and Microsoft mergerThis is likely the final post in the series critical of Linkedin as a stock proposition. <a href="http://www.naturalfinance.net/2016/04/linkedin-q1-2016-results.html?utm_source=BP_recent&utm-medium=gadget&utm_campaign=bp_recent">Last entry in the series</a>. Microsoft will acquire the company for $26B. The previous entries go into detail why the stock is relatively worthless. This final post takes those conclusions for granted.<br />
<br />
<b>Linkedin 2Q-2016 results</b><br />
Another consecutive loss and negative free cashflow. Though they did significantly outperform guidance based on strong international revenue recovery. Still their US business is dying, and international spike is more likely a recovery from previous macro headwinds, thanks to refugee migration, than sustainable growth.<br />
<br />
<b>The signal of LNKD accepting $26B</b><br />
Reid Hoffman understands that the company is a piece of shit not worth the $35B market value that it had previously reached. Previous stock compensation would also get management on board with cashing out, if they understood that the option strike prices they were holding were unreachable.<br />
<br />
The mistake in my previous analysis was considering Hoffman an insider of the company. Its his sole voting discretion to sell the company, and treating the corrupt stock structure that allows management insiders to use the stock as a golden goose to enrich themselves with stock compensation is fundamentally a liability to Hoffman. The realization that the company is a worthless no margin enterprise, brings up the double edge of stock compensation: Retaining talent is difficult and causes even more business deterioration when the talent realizes their past compensation is worthless. A realization that would have occurred as a result of previous stock price drop.<br />
<br />
Reid Hoffman understands (by accepting the buyout) that it is unreasonable for him to hope the company would ever be worth $26B (after compensation dilutions).<br />
<br />
<b>Microsoft's strategy</b><br />
There are zero synergies between the businesses. MSFT's reasons for the acquisition are to go after a different business that makes no money: CRM. (Salesforce.com) which is B2B sales facilitation. Its reasons for wanting to get into this unprofitable business are only indirectly related to better penetration of its cloud and database services. Competing with CRM might drive its purchaseable value down to $50B.<br />
<br />
Linkedin's non-HR B2B platform (premium subscriptions) is its smallest and most stagnantly growing segment. It will require significant development and investment to create a platform that competes with CRM.<br />
<br />
This strategy theory is not public, but even if terrible, is far less stupid than Nadella's moronic public justifications for the merger. The reasons for keeping it non public are that it would admit anti-competitive intent towards CRM, and expose the Linkedin membership proposition as a ruse to sell unsolicited (non-job offer) communication access to the membership. The common mistake in valuing web site membership assets is treating the asset like a 90s cable/phone subscriber that have no other choice but to perpetually pay the membership costs.<br />
<br />
If MSFT had any interest in the HR business, it could have bought Monster.com for under $1B, and invest in it to clone linkedin offerings. Linkedin's enginering metrics (cost of revenue including depreciation (server costs) are the worst in the industry. MSFT's declaration to leave the company alone admits that it has no interest in leveraging its own IT skills to create value in the business, and admits to seeing no value in the HR industry.<br />
<br />
<b>The cost to Microsoft</b><br />
$26B purchase price is being financed by <a href="https://news.microsoft.com/2016/08/01/microsoft-announces-debt-offerings-5/">nearly $20B in bond offerings</a>. The contracted interest expenses for those bonds are $11.568B over their terms. The annual interest cost is $530B.<br />
<br />
Very optimistic forecasts for Linkedin's growth (consistent with the most bullish analyst projections) will result in $100M incremental annual profit over the next 10 years, and then likely stop growing. Under this model, profits over the next 11 years will equal the cummulative interest expenses over those 11 years. Then bring in $1B in profits per year thereafter.<br />
<br />
The optimistic profit stream would contribute $500M over interest expenses starting in 2027. To pay back the $37.5B acquisition costs will take about 86 years. A different payback calculation is 11 years to pay $5.5B of interest cost. Another 6 years to repay remaining interest cost balance. 26-52 years to repay debt principal and additional $6B cash purchase price: 43-79 years payback.<br />
<br />
<b>Microsoft Stupidity</b>:<br />
<br />
Microsoft logic:<br />
<ol>
<li>Everyone loves to buy Nokia phones</li>
<li>Lets overpay to take them over, then spend massive resources on an operating system for their phones.</li>
<li>If everyone loves Nokia phones so much that they will overpay for them then there is some hope we can make our investment back.</li>
<li>?</li>
<li>Write off the entire Nokia acquisition years later and close down the division.</li>
</ol>
The repeat of the Nokia mistake in the Linkedin acquisition is mistaking linkedin members or Nokia customers as captured slaves. Linkedin members sign up purely in the hope that it will lead to employment opportunities. Massive development effort designed to leverage assumed captured slaves may not payoff. 43-80 year payback timeframe excluding new development efforts means even lower success probability than its Nokia strategy.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com129tag:blogger.com,1999:blog-2467928492793719077.post-49694729037271975782016-06-28T17:18:00.000-07:002016-07-03T10:12:34.144-07:00Life Accounts (previously refered to as ULI) as a complement to UBI (basic income)A Life Account is a term used by a Finnish politician in the context of basic income. I have no idea what she meant by it, but its a great term to describe the concept of ULI (unconditional loan income) I've developed earlier.<br />
<br />
<a href="http://www.naturalfinance.net/2016/02/unconditional-loan-income-ubi-pilot.html">ULI</a> is especially useful in the context of pilot programs under discussion in many areas of the world, but has numerous other advantages compared to just basic income.<br />
<br />
<b>In the context of Ontario/Canada,</b><br />
<br />
<ul>
<li>Every resident under 65 has the unconditional right to a government/ backed loan of $8000 per year ($750 per month if taken every month). No restrictions or questions whatsoever related to use of funds.</li>
<li>There is a non-usurious interest rate of 2%/year applied to the loan(s). Each loan (monthly or yearly)'s balance cannot grow to more than 100% of original value ($750 loan has max repayment of $1500, even if still due 80 years later)</li>
<li>There is no fixed repayment obligations. Instead, a 15% royalty/tax on income is applied as a loan repayment. No income means no repayment obligations.</li>
<li>The 15% income royalty replaces the existing payroll tax system that is a fundamentally equivalent repayment burden. There is no $50k salary cap for payroll taxes. Investors and landlords and business owners, also fully repay ULI based on income.</li>
<li>The banking system can be directly involved in service delivery. </li>
<li>If you have unused ULI borrowing capacity for the year, you may borrow from it up to March 1 of the following year for any purpose, or April 31st of the year to settle income tax or repayment royalty obligations. </li>
<li>Spousal ULI balances are repaid at a 10% royalty rate, if your own balance is 0.</li>
<li>Incomes of $53400 would repay $8000 in ULI. The amount equal to what can be withdrawn the same year.</li>
<li>Estate taxes would place liens on non-liquid assets (houses typically) of the estate, but the estate would still formally owe any ULI.</li>
</ul>
<br />
<b>Life Account concept adds:</b><br />
<ul>
<li>A $100k accumulated lifetime balance owed triggers adjustments to new loan eligibility.</li>
<li>Eligible new loan amounts can drop to $6000/year ($500/month) at $100k balance outstanding.</li>
<li>At $150k total outstanding, the royalty repayment rate can grow to 20%, and include new loan income as part of the royalty base.</li>
<li>It takes about 12 years of 0 income lifestyle to reach a $100k balance outstanding. It takes another 7-8 years to reach $150k balance if 0 repayments are ever made.</li>
<li>At $200k, royalty repayment rate would go up to 25%, and new loan eligibility would drop to $4000/year. It takes another 9-10 years to reach that cap.</li>
</ul>
<br />
<b>Like a student loan without being tied to education</b><br />
<br />
The life account is close to the familiar concept of renegotiation on US predatory student lending programs, where income based repayments are negotiated. Even though they are not forced to, young adults would eagerly use the life account funds to assist in their pursuit of formal education.<br />
<br />
But development isn't limited to accredited education programs. STEM skills can be developed at a hobby/self directed learning effort. Tools, machines, design time with access to food and healthcare is development. Part time work, internships, 0-hour contracts, gigs is development towards hopeful full time middle class income.<br />
<br />
But using the funds towards a car or food or home provides income security for any lifestyle or income level. As a complement to UBI or GAI, the overall support amount is sufficient to eliminate all other income assistance programs.<br />
<br />
<b>The major difference with basic income</b><br />
<br />
A life account loan balance repaid through an income royalty differs from normal tax funding of UBI in that "taxes owing" is more directly related to individual benefits received. A successful doctor or other student that used 8 years of income support is likely to repay that income support. Other successful people eventually eliminate their repayment obligation (through repayment).<br />
<br />
The poor, in exchange, receive the unchallageable right to run up a high benefit balance, and choose or deal with a lifestyle that will not repay it.<br />
<br />
The main justification for life accounts vs UBI is one of cost. If 50% of the population repay their loan with 2% interest over 10 years, and of the remaining 50%, they average a 50% repayment of the loan amounts taken, then compared to the same UBI benefit level, ULI costs only 15% of the funding requirement. A $8000 ULI/lifeaccount benefit costs the same as an $1200 UBI amount.<br />
<br />
<b>Complement to UBI or GAI</b><br />
<br />
The<a href="http://www.naturalfinance.net/2016/03/manitoba-green-party-basic-income.html"> Manitoba Green Party platform proposes a $6300 GAI (guaranteed anual income) that is clawed back at a rate of 16% from poor-middle income workers on their first $40k income</a>. The program is roughly revenue neutral with poverty elimination benefits completely justifying the very small tax increases affecting some people.<br />
<br />
In the linked paper, obvious funding sources (welfare elimination, basic amounts turned into refundable tax credits, special investment income credits eliminated) for an additional $3000- $4000 in UBI without any low income clawbacks are made. Enough for at least $9300 in GAI + UBI. Enough by itself for very spartan poverty elimination. (through for example, cohabitation)<br />
<br />
ULI/life account supplement of $8000/year is both sufficient to eliminate, and a huge improvement over, EI (employment insurance). While working, you may avoid withdrawing from life account. If laid off/fired in July, you may take out $1500/month for rest of year. If laid off at begining of year, you may use unused previous year's balance. There is 0 impact on income security or income supplement strategies affected by taking a new job the day after you quit your previous one. Insurance is pre-paid access to support possibility. ULI is post-paid repayment of support received. An obviously superior income security program.<br />
<br />
Eliminating EI benefits allows either $1500 higher UBI payments, or elimination of 7.5% of payroll taxes. Repaying ULI would be as burdensome as current payroll (EI+CPP) taxes. The ULI benefit itself though is sufficient to fund a voluntary CPP (personal pension) program, or an even better retirement enhancement program of paying down mortgage or other debt.<br />
<br />
The total unconditional income support of $17300 is enough for anyone to fund formal education or other personal/business/family development and income security/variance requirements.<br />
<br />
<b>Social/Citizen Dividend complement</b><br />
Basic income is often thought as a citzen benefit rather than a resident/landed immigrant benefit. The thinking is partially nationalist, but also has a cost rationale of reducing eligible recipients. Still this is not completely fair in that immigrants (may) pay taxes, and social services to ghetoize and oppress them are expensive, especially if they are needless.<br />
<br />
Immigrants generally perform the function of slaves, a partial reason for their welcoming is that <a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html">slavery is awesome</a> (for the slavers), but a more important benefit to Canada is that all increases in the amount of people provides work/income to "pure" nationals. It doesn't matter who pays to have them eat or housed, the payments get transferred through the economy.<br />
<br />
So far, we've discussed a $17300 unconditional income support plan made up of $6300 GAI, $3000 UBI, and $8000 ULI. Under this plan, the rich (ignoring full taxation of dividend and capital gains income) get a 15% tax cut on employement income! (due to payroll tax elimination and replacement with 15% royalty on ULI repayments).<br />
<br />
The rich don't use ULI, but also don't have to repay it. The GAI and UBI were all revenue neutral. UBI/ULI is still a tremendous benefit to the rich in that it takes care of their family (spouse and young adult children), and further assists in their own income variability and its not impossible that they will need to access the safety net either. More importantly, the rich benefit the most from the 10%+ in higher consumer spending that UBI/ULI generates (its always been trickle up economics).<br />
<br />
For these reasons a 5% surtax on those who do not have an outstanding ULI balance is fair to allow higher income Canadians to bear some responsibility for the tremendous winfall that UBI/ULI provides to the successful.<br />
<br />
The proceeds from this 5% surtax (<a href="http://www.cra-arc.gc.ca/gncy/stts/t1fnl/2012/tbl2-eng.pdf">from CRA 2012 data</a>) assuming its from those with incomes over $80k, 5% of $482B income from that group would be $24B. If that surplus funding is used to pay a social dividend to adult citizens only, it would be enough for $1200 per citizen. (Note that it is not a surtax only on income above $80k. Instead, people either pay 15% royalty on all income or 5% surtax depending on whether or not they have a life account balance outstanding)<br />
<br />
The citizen's dividend would be used to repay ULI balances for those that have them, and so effectively the only people receiving a cash benefit from the citizen dividend would be those that pay the 5% surtax. Further enhancing its fairness. Any other surplus tax revenue resulting from say economic growth, and the buffers built into the proposed tax/UBI code, should also go towards citizen dividend payments.<br />
<br />
<br />
<br />
<b>An immigrant unconditional income program</b><br />
A $10000 ULI program with 40% royalty rate on incomes while having a balance, and "normal" tax rates if their balance is 0, would provide non-ctizens with $25000 after tax income on earned income of $25000.<br />
<br />
This is actually extremely close to the 16% GAI clawback on $6300 + 22% "normal" tax rate. Its 2% higher on incomes up to $25k, but 16% lower on income from $25k to $40k. Ignoring the cumulative nature of ULI repayments. The $3000 UBI funding comes from program/tax credit savings that include non-citizens. The $700 difference with the citizen ULI/UBI program is negligible. <br />
<br />
It would be prefectly reasonable to offer the same $9300 UBI/GAI program to all residents, and then for non-citizens, offer $2000 maximum annual ULI program. One justification to offer lower ULI limit to non-citizens is the fear of collecting on loan balances if they leave the country.<br />
<br />
<br />
The only reason to formulate it as a $10000 ULI only program is to soothe nationalist psychopathy about non-citizens paying their own way. ULI has the general quality of a social program framed to suit hate motivated reasons/falsehoods against human liberation. It's loan-based self support where any losses from the loan program costs less than the welfare support it replaces, and the relatively modest support in the case of immigrants encourages their voluntary compliance into the slavery our overlords need.<br />
<br />
While a 2 tier system tailored to 2nd class slavery promotion of immigrants may seem distasteful, $10k is enough to refuse slavery arrangements, and choose life independent of permission, and the choice to come to Canada is likely to be more attractive than any other option. UBI creates massive job opportunities available to be filled, and so this 2 tiered pro-immigration plan would suit the slaver/business sector.<br />
<br />
<b>Carbon tax/dividends: Another $2000-$4000 unconditional income support</b><br />
The only effective way to combat climate change is through carbon taxes that direct their funding towards social dividends. By definition the average cheque is enough to pay for the extra taxes if polluting behaviour is unchanged. But every individual is motivated to change their behaviour and so solar panels and electric cars, and home insulation is an obvious money/tax saving choice available to anyone who'd prefer not to pay the taxes.<br />
<br />
Carbon dividends should be available to non-citizens as they also use energy.<br />
<br />
<b>Summary of benefit program</b><br />
<ol>
<li><b>Citizens:</b> $6300 GAI (16% clawback), $3000 UBI, $8000 ULI (15% clawback), $1200 Citizen Dividend (repays ULI if owed), $2700 Carbon dividend. <b>$20000</b></li>
<li><b>Non-citizens:</b> $10000 ULI (40% clawback). $2700 Carbon dividend: <b>$12700</b></li>
</ol>
<b>Financial engineering of ULI for private participation </b><br />
Detailed in <a href="http://www.naturalfinance.net/2016/02/unconditional-loan-income-ubi-pilot.html">original ULI whitepaper</a>, the funding of ULI is independent from the guarantee of ULI principal. The latter is guaranteed by government through funding the purchase of its own 30 year bonds. The citizen's dividend repayment system would bring the expected guarantee cost close to 0. The arrangement permits the central bank to buy the guaranteed ULI funding loans under the same jurisdictional logic it can justify QE. The ULI funding loans themselves can originate from a mix of private and public sources.<br />
<br />
The appeal to investors for ULI loans even with a maximum 2% annual return is the 0% minimum return, and a very high cashflow yield. Median income levels would repay 70% of a loan's balance in 1 year. A $1200 citizen dividend would repay an addional minimum 14% of investment as cashflow.<br />
<br />
ULI loans are made as shares in monthly pools spread among all borrowers for the month. The richest and poorest borrowers are all in the same pool. Of all existing loan products, ULI loans would have the fastest principal repayment rate (and thus cash yield) by far.<br />
<br />
The 0% guarantee is paid at the time of estate lien resolution which may be years after the recipient's death. But if an average 80% is repaid on a 20 year time frame (140% return on that 80% - 112% of original principal) then even if remaining 20% repaid 0, its a 12% return, and the guarantor would pay nothing. Even if it takes a long time to resolve the remaining 20%, the ULI loan pool is a resellable asset, and so may be cashed out (at a likely discount) at any time.<br />
<br />
ULI is a slight accounting trick on the same fundamental principle as UBI. Both are investments by society in its people, paid by taxes/funding of the successful. A national student loan program costs only the unrepaid/defaulted portion. It has always generated net profits to private sector participants. ULI would be tailored more as a break even proposition, but UBI is approximately the same principle of investing in youth and entrepreneurs under the hope that their future taxes repays the received assistance.<br />
<br />
<b>Potential for global ULI/Life Accounts</b><br />
ULI can be a transnational loan, with repayment obligations administered by national revenue agencies. This can mitigate the potential for individuals to use generous development assistance of one country but then move to an oppressive country to apply those skills.<br />
<br />
Access to citizen's dividends may be contingent on residency, as a further incentive for citizens to stay in their country.<br />
<br />
<b>Banking system involvement</b><br />
A life account can be just another banking product. ULI funding loans (for lenders) can be products that are both sold as retail banking products similar to GICs and through bond markets, with institutional, private, and government funders.<br />
<br />
Both the banks and government can offer backstop financing of ULI funding requirements. In the banks' case, either as short term bridge financing, or simply a partial backstop of a few $Billion. It makes more sense to use retail banking products as the primary funding, and bond markets as a means to resell the loan packages.<br />
<br />
Due to guaranteed nature of ULI loans, and fast repayment yield, these products should be eligible for tier 1 capital reserve requirements.<br />
<br />
Banks roles could also be used to resolve possible "residency fraud" requiring in branch visits from accounts with suspicious IPs.<br />
<br />
<b>ULI as a tool for pilot studies</b><br />
The<a href="http://www.naturalfinance.net/2016/02/unconditional-loan-income-ubi-pilot.html"> ULI concep</a>t was originally designed as a solution to pilot study issues. Though I currently advocate for it as a general program. The main difficulty with pilot programs are limited funding and also piloting the concept of/reaction to associated tax increases. While <a href="http://www.naturalfinance.net/2016/03/an-ontario-basic-income-pilot-design.html">original pilot program guidelines </a>still apply, here is a simplified proposal.<br />
<br />
Ontario Pilot program proposition(s):<br />
<ol>
<li>$12000 ULI at 20% income royalty pay back rate. Accepting proposal rejects access rights to welfare/disability EI benefits for duration of the program. This program is available to those 18 to 25 without post-secondary aptitude, and those 25-64. ($60k income would result in $12k ULI repayments). Any EI premiums paid will count as repayment. ULI benefits will count as income for purposes of income based housing.</li>
<li>$18000 ULI at 25% income royalty pay back rate. Accepting proposal rejects access to welfare/disability/EI/Student assistance. The program is available to those with University admission letters/enrollment. A bonus $1500 towards tuition will be given to recipients who enroll in an Ontario University, but the $18000 is not conditional upon it. ($64k income (likely in future years) will result in $18k repayments.</li>
<li>Optionally, program 2 could be offered to applicants of provincial venture assistance programs, which tend to be far too competitive/rejectionist to be useful.</li>
</ol>
<br />
The 2 different tracks are meant to study groups that already separated as investable vs. non-investable.<br />
<br />
For program 1, it should definitely be offered to a large group of social assistance recipients. Some may say no, and a questionnaire should discover their reasons. For this social assistance recipient group, though ULI is a loan with permanent repayment obligation, if the program is discontinued, a portion of the ULI received may, at her majesty's discretion, be reclassified as non-repayable social benefits.<br />
<br />
Program 1 should also be offered as a general lottery, and to a random selection of tax filers. The difference between the 2 selection methods is the first group are people sufficiently motivated to receive UBI/ULI as to bother applying. The lottery application level will also show general interest in the ULI program. Both of these groups should select sufficient samples accross age groups.<br />
<br />
Program 1 should also be tested in concentrated communities as well as in individuals across the province. Concentration allows measurement of regional economic gains. Isolated recipients provide better expectations for border towns and general happiness.<br />
<br />
Program 2's lack of forced institutional attendance allows comparing success rates of alternate choices.<br />
<br />
An alternative pilot design is to include the Manitoba Green Party $6300 GAI plan, and have a ULI program (same amounts less $6300) supplement that. The GAI is a gift. The ULI a royalty-loan.<br />
<br />
<b>The left hates ULI as much as they hate student loans</b><br />
Even if there is political favour for UBI over ULI/life accounts, ULI as a pilot tool is the right way to measure tax and permanent consequences of the program. Accepting the ULI has tradeoffs of long term tax implications even if the program could be temporary.<br />
<br />
Any UBI pilot without permanent implications is going to have results, no matter how good, dismissed as "of course free money made people happier", or "they only behaved this way because it was temporary", and then used as an opportunity to shelve the program for another 40 years.<br />
<br />
I'll close by repeating my position that pilot testing UBI is equivalent to pilot testing slavery abolition or pilot testing granting the vote to women and minorities. Its an opportunity to avoid action, and fundamentally wrong. They pilot studied basic income in the 70s. Shelved without analysis in Canada. In the US, there was a small decrease in hours worked. The US political response was the same as if they had pilot studied slavery abolition and found a 5% cotton production decrease.<br />
<br />
To address fear and disruption, I recommend instead <a href="http://www.naturalfinance.net/2016/05/refundable-tax-credits-introduction-to.html">gradualism</a>.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com12tag:blogger.com,1999:blog-2467928492793719077.post-78035686517041383062016-05-28T13:51:00.000-07:002018-03-01T15:15:22.426-08:00moral inversions, fair markets, and absolute moralityMoral transformations refer to reframing propositions in a better moral light in order for them to be more morally palatable, though fundamentally providing the same/similar enough advantages. Moral inversions is a process where morally unpalatable objectives and outcomes are pursued using moral transformations. A moral inversion is a moral justification for (likely intentional) evil. These topics should be the main focus of philosophy and moralism. Though we can identify what is moral vs immoral, its relatively irrelevant to do compared to the easy process for corrupting those identities to suit empowered wills.<br />
<br />
<b>Fair markets</b><br />
Adam Smith's justification of free markets was entirely and explicitly dependent on fair markets: equality of bargaining power and perfect information and competition. Basic income is one promising policy to equalize bargaining power in the labour market. Though markets are primarily thought of as transactional arrangements, they also apply to games, such as elections determining power, and fair markets is a subset of fair gaming systems.<br />
<br />
I propose that fair markets are a more ideal and permanent solution to market/game corruption than is changing who benefits from the game corruption. For example socialism vs capitalism is a war where the winner reaps the gains from a corrupt favouring game.<br />
<br />
<b>If I propose to kill and eat you for profit</b><br />
You will raise 3 moral objections to the proposal: I should not kill you. I should not eat you, and doing so for profit is definitely not an exemption for the previous 2 moral imperatives. An audience hearing your moral objections would be inclined to agree with you, and either through sympathetic rage against my evil, or merely to ensure a fair game where they are not subject to similar victimization, may seek to prevent or punish my proposal.<br />
<br />
To pursue my goals of eating and profit I need to morally invert your losses through moral/situational transformations that will at least intellectually confuse the audience you need to make your moral case to. For instance if a harsh systemic and natural balance kills you, and pigs eat you, then I may eat the pig with no moral (vegetarianism aside) objection to my actions. Exploiting your desperation for my profit can be done with moral "blamelessness"/detachment if I have no visible hand in causing your desperation. If state sanctioned moral authorities (usually the state itself) have not previously denounced profiting from your desperation in the manner that I can, then your audience is unlikely to be moved to your defense, and my media puppets may drown out your voice and confuse enough of the audience to side with me.<br />
<br />
<b>But who will pick the cotton</b><br />
was a primary concern, and anti-abolitionist argument. Abolition of slavery was a<a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html"> moral transformation</a>: An appeasement of liberal moral qualms, while fundamentally permitting the same profit/cotton opportunities, labour market exploitation independent of slavery, and perpetuating african american sub-equality.<br />
<br />
A moral transformation is a solution to keeping the world the same while manufacturing a liberal headline.<br />
<br />
<b>If voting could change anything they'd make it illegal</b><br />
Democracy was the minimalist moral transformation necessary to appease violent liberal rebellion. Democracy is relatively recent mid 19th century development in Europe that stemmed from <a href="http://mindoftheechidna.blogspot.ca/2016/05/how-men-won-themselves-vote-and-price.html">a contagion of rebellions</a>. But a process to elect kings does not eliminate power and control. It merely requires a slight sharing of power among aligned interests and those easily bought.<br />
<br />
The key takeaway is that governance does not seek to maximize game fairness, and instead offers itself as a tool for moral inversions. Individual moral inversion opportunities seem to trump fairness ambitions primarily because there is a win opportunity through moral inversion that will escape attention by the losers, and innattentive audience.<br />
<br />
Even principled defense of fairness actions do not stop constant attack on them. Abortion, Net neutrality, and 40 acres and a mule all received constant attack. The latter was undone almost everywhere within 2 years. Net neutrality has similar deep moneyed backers, and abortion is just vote bait, but vote bait is the main force upholding net neutrality.<br />
<br />
<b>What makes morality focus unhelpful</b><br />
Winners from corrupt markets will call the markets free, and the outcome just and deserved, while losers will call the winners assholes. The entirety of political discourse is about siding with and against assholes.<br />
<br />
<b>The fear of not doing the same thing tommorow</b><br />
If you promised coal workers that for 10 future generations, they will be forced underground to risk collapse accidents and lung disease while contributing to the destruction of the planet and air environment, they would be very happy with the proposed income security.<br />
<br />
Any change no matter how systemically/socially beneficial will disrupt someone's life in the short term, and create reluctance and resistance.<br />
<br />
<b>linguistics: fuckface</b><br />
The ends justify what comes out of your fuckface to justify the ends. is moral inversions and transformations.<br />
<br />
Fuckface politics is constituency advocacy dressed up as social progress or efficiency instead of the latter.<br />
<br />
I'm unable to determine if fuckfaces are stupid or dishonestly resistant and evil, but these concepts do not seem that complicated, and the latter is presumed for public figures. Stupidity would disqualify them from public influence as much as should evil.<br />
<br />
<b>Absolute social morality</b><br />
is necessary to prevent moral inversions and transformations as a tool for political and economic power. Either tyranny and slavery are absolutely bad, or they are something we say is bad while accepting as close a system to these as possible without rebellion. Without absolute social morality standards, minds are too weak to prevent moral inversions that perpetuate or increase slavery and tyranny.<br />
<br />
These are sufficiently short, simple and clear for a court to strictly limit political moral inversions. The list is worth listing because there is not universal understanding of them:<br />
<ol>
<li>Increased production is good to a society. More things is more wealth, though external costs such as pollution are relevant. Distribution of wealth is a separate question, but private property is the best known mechanism to motivate production.</li>
<li>Savings is at best not always economically parasitic. Corollary to 1. Savings is parasitic as insurance, and is parasitic as excesses over productive investment requirements. Spending always improves economic output more than saving, and nearly all future income (production) opportunities are inherently financeable if not foregoing food or shelter. </li>
<li>Absolute equality of all social members as an absolute ideal. The only controversial aspect here is refusal to consider a gender or class as handicapped children free of responsibility, or superior beings incapable of making accusatory lies. Equality of rights and opportunity.</li>
<li>Freedom is good. The most important is the financial Independence to survive without any legal duty to society. The ideal opportunity of living a comfortable life through sufficient after tax income as rewards for production should be maintained, but this is enough to dismiss outright right wing moral inversions on tax policy.</li>
<li>Work is a privilege. As opposed to a duty or entitlement. If duty, then its slavery. If entitlement, then its corrupt empire unrelated to production, and violating equality of opportunity. The core understanding of privilege is that every good job has many denied coveters of that job's income, and if you can quickly and cheaply make 20M cars (through automation), then traditional car companies and workers are denied that opportunity. Cultural pressure to contribute to society is permissible.</li>
<li>Social dividends is a citizen's right and preference. It implies that the cost of all programs alternative to a dividend payment are paid for equally by all citizens. It implies that citizens are equal and so deserve an equal share of social revenue. The alternative is that citizens are some authority's servants.</li>
<li>Within the absolute social morality constraints, governance should be structured as <a href="http://naturalgovernance.blogspot.ca/2011/01/natural-governance.html">independent democratically accountable silos</a> wherever possible rather than as unaccountable hierarchies. Executive power/authority is recognized as a practical necessity (tieing your own shoelaces without democratic approval regardless of the idealized efficiency of technological democracy advancements), yet all possible oversight and democratic corrective options must be available.</li>
</ol>
Society should embrace fair markets/game structure, and reject all political manipulations to keep them corrupt. First, recognizing moral absolutes, then some process for adherence to them is a necessary step in achieving fair markets and governance.<br />
<br />
<b>The<a href="http://www.naturalfinance.net/2012/06/imperative-need-for-social-dividends.html"> basic income and social dividend</a> framework</b><br />
Taxation and equal redistribution of tax funds is the core obvious means of balancing these directives. And not that difficult to do so, as several policy ranges are possible. The key debate centers around UBI and accompanying tax level. I favour gradualism, purely as a concession to disruptive discomfort, but reject low UBI as a mechanism to compel more work. The latter is unnecessary, and will become obvious in the last "fair markets" section of this paper.<br />
<br />
Issues of nationalism are mostly ignored in this paper, but will be<a href="http://www.naturalfinance.net/2016/11/nationalism-and-basic-income.html" target="_blank"> addressed in another essay</a>.<br />
<br />
<b>Increase production</b><br />
Not that controversial except for the opposing view of creating more environment per people. Sterilization and mass extermination is the alternative quiet but fairly widespread view that must be absolutely rejected. It is a violation of the equality principle for an authority to inflict death, sterilization, and deprivation on those they choose.<br />
<br />
<b>Savings is not useful</b><br />
is important enough to be its own moral absolute, because it is an important source of moral inversion: "Extortion is good because it will allow us to fund medical research", and "wealth accumulation helps us fund production". Savings is necessary to fight parasitic insecurity, but eliminating the parasite is more helpful. Otherwise, savings is literally having more money than you know what to do with. Though its not something deserving punishment, it is not acceptable to glorify it as a virtue. Spending always fuels more production, and promotes more productive ideas.<br />
<br />
<b>Absolute equality</b><br />
Should not be that controversial. But separation of the deserving and undeserving is the most energy intensive political moral inversion efforts. Entertaining the possibility of exceptions to absolute equality, entertains Ayn Rand's case for valuable people differentiation. In the context of basic income and social dividends, this principle would avoid special payments to parents and disabled, though there is a strong case for UBI high enough to raise children and/or deal with hardships. Universal medical device coverage complies with the equality principle as well.<br />
<br />
<b>Freedom in high taxes</b><br />
The only valid objection to taxes is that they are used to advance kings' moral inversions. Income taxes don't make anyone poorer if they are redistributed. The natural spending cycle returns the taxes paid to anyone willing to work. The important freedom everyone deserves is the relative financial independence provided by basic income. It is a moral inversion of freedom to focus on the freedom from taxes.<br />
<br />
<br />
<b>Work as privilege</b><br />
This is the most obvious and most morally inverted absolute. Its inversion serves not only market supremacist greed and oppressors, but "worker paradise" socialists as well. Producing/providing things is the social value, and should be done with as little work as necessary and possible.<br />
<br />
<blockquote class="tr_bq">
Basic income and high taxation is a better system than socialism because it does not matter if the monopoly profits are made by evil capitalists or adorable worker cooperatives. They are sufficient to compensate those locked out of the privilege of those profits.</blockquote>
A strangely stupid socialist objection to UBI is the prospect that UBI could subsidize employers and so increase their profits. The complaint literally opposes circumstances that help you (more people can and want to hire you) on the grounds that they might benefit from the proposal.<br />
<br />
The primitive world model of needing to mobilize every available volunteer for hunting and gathering infinite freely available resources no longer applies. Basic needs for all can be provided by the few, and whatever method selects the lucky few, must recognize a compensation duty to the unlucky unselected for the privilege.<br />
<br />
<b>No legal duty to society</b><br />
necessarily avoids oppression.<br />
<ul>
<li>The agriculture industry employs 1% of the workforce, and the only thing stopping it (and every other industry, fundamentally) from making more money is more mouths to feed.</li>
<li>Not contributing to society beyond existence lessens competition with other social members for contribution privileges, and increases the need for contributions through consumption demand.</li>
</ul>
Freedom from oppression is a positive reason to give back to your society, and a negative reason against mass gun rampages.<br />
<br />
<b>Fair markets</b><br />
Fair labour markets is an inherent feature of basic income. The freedom to refuse work, and still survive is the freedom to survive without obtaining permission to. It creates more business competition by making it easier to start businesses including cooperatives. It creates easier to find work and higher wages and profits due to less competitive pressures (some people will work less)<br />
<br />
An inherently fair market is one that doesn't need regulation. Rules for minimum wage, overtime, and whipping limitations exist because the labour market has obvious oppressive power imbalances, and policy bandaids must limit the extent of slavery within the moral transformation of permitting it. Any reluctance for basic income by employers is an admission that oppression exists, and any reluctance by employees is an admission that oppression doesn't exist. Wages can fairly go up or down in a fair labour market as the sum of all individual decisions and circumstances. Its always the best possible estimate of the correct wage, too.<br />
<br />
Self regulation of the labour market also makes the level of taxation and UBI and inflation and laziness mostly irrelevant and self adjusting. The fear that high UBI levels might create inflation and withdrawal from work would simply lower the "real" value of UBI to the actual social surplus produced, and would motivate more to contribute in order to reach their desired consumption levels. Inflation and work withdrawal increases the earnings, ease of income, and taxes paid for those who want more. Humanity will work as much as it wants or needs to, and whatever level that is is the correct level, and one where individual freedom and wishes fully actualized.<br />
<br />
<b>The right UBI amount</b><br />
Gradualism is a better approach than pilot studies or referendums to set "the right amount" because it is less disruptive, and not prone to dishonest manipulation and moral transformations of the research results (which will still result in disruption when implemented).<br />
<br />
The right minimum amount to graduate to is an amount given to everyone that is sufficient to address what any lobby group has ever obtained as appropriate for what a narrow group deserves. In Canada, this might be students or parent assistance levels. Imaginary poverty lines are relevant, but not absolutely so.<br />
<br />
A maximum amount depends on tax rates and money printing. It is possible to set taxes too high, and an obvious hard maximum is a tax rate that reduces tax revenue. This "tax target" changes with how easy it is for those privileged to work to make money, It changes with automation level and need for "hard" work, and still has circumstantial considerations that imply a range of acceptable maximums, that need another paper to explain, but the main point of the next section is that absolute social morality restricts the range of policy debate rather than insisting on fixed permanent policy.<br />
<br />
<b>Purpose of absolute social morality</b><br />
Absolute truths in social and economic policy exist. "Constitutionalizing" them serves to limit morally inverted policy discussions. Slavery and oppression is not something to be transformed to limit its perceived effect while maintaining the power and advantages afforded to those who extract them. Slavery and oppression need to be eliminated. Alternate absolute moral determinations could lead to our grade schools teaching democracy as "a neat trick to fool the niggers into thinking they are free so they work harder". An absolute morality determination will eliminate the confusion in what society is supposed to be, and honestly outline the constraints of governance. If there is a theory that a governance system is not corrupt, and made up of only individuals with the highest levels of integrity, then there could be no objection to codifying standards of policy and governance.<br />
<br />
Absolute morality is the radical notion that how we explain democracy to our children is actually what constrains legislated policy.<br />
<br />
A one sentence summary of absolute social morality is policy to maximize creation and happiness, minimize destruction and deception, and eliminate oppression and slavery. There is equational multiparameter balance, but zero tolerance for oppression and slavery, and it is applicable as both a personal and social policy model.<br />
<br />
Lying moral inverters will try to argue against each of the proposed moral absolutes, and that opportunity should exist if only to open and ceremonize the process and be certain of them.<br />
<br />
Absolute morality exposes both left and right wing lies. The main left wing lie is that "slaves (or the people considerate of them) are the good people and deserve to be the new kings." While wars are motivated by the spoils, it is fundamentally a losing war proposition for the left and labour to be fighting due to their weakening power in the face of technology.<br />
<br />
Absolute morality that focuses the equal people quality of workers is the best hope for individuals to gain appropriate (balanced) social power.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com7tag:blogger.com,1999:blog-2467928492793719077.post-45012375741468420102016-05-14T15:03:00.000-07:002016-05-14T15:15:03.439-07:00Over 90% of Swiss should vote YES on basic income referendumSwitzerland will vote on June 5 2016 in a referendum that forces their Government to consider a universal basic income.<br />
<br />
<b>A YES vote would NOT mean</b><br />
2500 CHF is given to every adult citizen starting the following month. There is no stipulated amount/details as part of the referendum question. In my view, it is an organizer mistake to have set the expectation of a YES vote so high, as it is too scary and disruptive to people.<br />
<br />
<b>A YES vote would mean</b><br />
<a href="http://www.naturalfinance.net/2016/05/refundable-tax-credits-introduction-to.html">refundable tax credits</a> hopefully totalling at least 1250CHF/month would be implemented soon. The same politicians that recommend against UBI would be in charge of this implementation. A YES vote simply forces them to make progress on the issue.<br />
<br />
<b>A 25%-78% average tax reduction</b><br />
The 2500CHF/month plan <a href="http://www.thelocal.ch/20160127/swiss-to-vote-on-guaranteed-income-for-all">has been costed out</a> to 208Bchf (paid to Swiss)/year, with funding of 153Bchf (paid by Swiss) tax increases. 55Bchf is saved in social programs. This creates an obvious taxpayer benefit. 26.5% of the 2500CHF UBI benefit or 662.50CHF/month is the average tax payer/citizen net benefit.<br />
<br />
While I don't understand the Swiss tax system, I do understand that federal collections are 10% of GDP so about 70Bchf/year, and the 55Bchf in savings would be a 78.5% reduction of federal tax funding of operations (even though actual funding changes are likely to be spread across multiple levels of government).<br />
<br />
With the 1250CHF/month plan, the cost is necessarily 104Bchf (half), and savings would likely be over 35Bchf, as some of the 55Bchf of programs cut are meant only for those whose income is below 15Kchf/year, and all of the remaining programs can have funding cuts offset by the 1250CHF benefit. This creates a net 400CHF/month average tax payer benefit or 33% of the UBI payments. It is a 50% government funding reduction to taxpayers.<br />
<br />
The net tax benefit and funding savings are entirely a function of program eliminations. The higher the UBI, the greater possible program eliminations, and so the greater the savings and net tax benefits. High UBI levels do not cost taxpayers anymore than lower levels because UBI is primarily a taxpayer to taxpayer transfer.<br />
<br />
<b>The magic of UBI funding</b><br />
The government is like a store that is funded with say an average donation of $1000/mo/person who then distributes the goods it decides that cost it an average of $1000/mo/person. Despite the averages some people pay more and some receive more, and that is not necessarily objectionable.<br />
<br />
The objectionable problem of a store deciding what goods it should give you, is that the value of the goods is determined after subtracting the costs of deciding who deserves them, and also enforcing that no one cheats by pretending to be deserving. The equally objectionable aspect is that providing the goods the store wants to give you does not get you the goods you would want to have.<br />
<br />
Direct equal money provided by government still permits socialized funding of the store, but none of the stupidity of it deciding what to sell/give you. There's no reason for people to remain deserving (poor) for extra benefits, and the entire bureaucratic overhead of deciding what is good for you is eliminated. You can use the money at any store and get what you want/need.<br />
<br />
<b>The fear of other people not working</b><br />
should really be the hope that other people stop working. All of your work opportunities exist only because clients can't or wont do the work. You buy indoor plumbing systems because you are too lazy - it is not worth your effort - to go to the river each day with a pail for your water.<br />
<br />
If you were the only person in Switzerland that is willing to work, and there is UBI, then everyone else will give you all of their UBI to buy your work services. The more people who might stop working as a result of UBI, the easier it is for you to find a job, as there will be fewer people competing with you, and the easier it is for you to get a pay raise if there are fewer people to replace you.<br />
<br />
<b>The people who gain from opposing UBI</b><br />
are mainly those who own exporting businesses that rely on the exploitative power granted by miserable and desperate Swiss. There are also a few people who are completely indifferent to the health of Swiss society such as some government workers and politicians, and passive trust and foreign asset holders.<br />
<br />
Of these, only exporters directly benefit from exploitative power. Government workers directly employed by social programs can wish to protect their payment for useless and unnecessary gatekeeping of social services, but if they are willing to work, UBI (+ severance packages) should be adequate compensation to move to an easier- less competitive- private sector.<br />
<br />
The other groups are basically indifferent to Swiss happiness. Their only cost to personal relative happiness is other people's gain of basic happiness and stress relief, such that their relative status and privilege. Still only the very richest of these would face a tax cost as opposed to a tax benefit from UBI, and it is a substantial evil to stand in the way of Swiss progress and happiness for such petty and minor concerns.<br />
<br />
The 0.1% that are export driven, the 5% government job holders threatened by program savings, and the 5% indifferent leaves 90% to benefit from UBI.<br />
<br />
<b>The 90% of winners</b><br />
The average 662CHF or 400CHF per month net tax benefit can be structured such that 90% or more receive some tax benefit, and 10% or less face a tax increase. Everyone who wishes not to work won't have to, and so gains a choice they value. Everyone that wants to earn more money will find it easier, and even those in the private sector who face a tax increase will increase their after tax earnings as a result of both easier work opportunities, and the substantial economic purchase power of the Swiss as a result of UBI.<br />
<br />
The economic stimulus from UBI is a very significant social (and individual opportunity) benefit on top of the individual tax benefits. UBI will reduce the need for Swiss savings. The new Swiss purchasing power will attract (employment producing) investment from all over the world.<br />
<br />
<b>The psychotic need for control</b><br />
Switzerland is objectively the least politically corrupt nation in the world. Permitted popular referendums, and resistance to military enslavement, appears impossible everywhere else in the world. Yet despite the 90%+ self and collective interest for basic income, the YES vote percentage is likely to be less than this. Sure, export focused sponsors of media manipulative lies misinform you, but it is psychotic hatred of other people's freedom that causes you to internalize the misinformation.<br />
<br />
The 3 reasons to work:<br />
<ol>
<li>Self-interested compensation for work. UBI frees all of you from the survival need for compensation. You retain the freedom to work purely for additional compensation.</li>
<li>The desire to help other's goals, with the focus on helping. This is social motivation/manipulation that can be enhanced through UBI. Removal of survival financing obligation opens up more opportunities.</li>
<li>Goal oriented desire to create. Focus is on the work/output itself.</li>
</ol>
We all have various levels of the 3 reasons in combination. Support for compelling work in others through hunger, status, helpful attitudes or outright slavery is in service to those who need assistance for their goals, but there is no rational or moral reason to support the psychopathic distortion of markets in their favour.<br />
<br />
Basic income inherently guarantees fair and free labour markets where the pursuit of money, in the context of voluntarily helping others is fully maintained without coercion or psychopathic manipulation. It further permits the freer pursuit of your own goals, for which you may also enhance the prosperity of labour market participants who, for enough compensation, will agreeably assist in the pursuit of your goals. UBI and automation permits more goals to be pursued, and it is the realization of goals that permits wealth increase in your society. Not the protection of existing wealth or goal monopolies.<br />
<br />
Your psychotic hatred of the other crabs in the bucket such that you clutch at them to drag them back down in the bucket is valuing hatred of their freedom more than access to your own. Once out of the bucket, they could help you escape too. Your relative happiness with not being at the absolute floor of the bucket, pales in comparison to the bucket destroying opportunity that a YES vote on the basic income question grants you.<br />
<br />
<b>After the YES vote</b><br />
The significant citizen and taxpayer benefits from UBI already evident can be significantly enhanced.<br />
<br />
Switzerland has one of the lowest interest rates (in fact negative interest rates) in the world done primarily for the financial and export sector. 40 or 100 years ago, this might have stimulated the "real" economy, but today the wealth created through automation is concentrated, and this inhibits the pursuit of new goals alluded to in previous section.<br />
<br />
<a href="http://www.naturalfinance.net/2016/02/unconditional-loan-income-ubi-pilot.html">ULI (unconditional loan income) </a>is a form of unconditional financial grants that is structured in such a way that central banks can assist the financing of universal income within their current mandates. Central bank participation in the enhancement of Swiss citizen welfare would directly stimulate tax payer benefits even more.<br />
<br />
After the YES vote, there will be infighting on how to distribute the taxpayer benefits of UBI. ULI and central bank assistance helps create more taxpayer benefits, and so facilitate compromises. Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com7tag:blogger.com,1999:blog-2467928492793719077.post-80367196969426342822016-05-02T11:40:00.000-07:002016-05-24T06:23:20.817-07:00Refundable tax credits: an introduction to basic income financingUnconditional basic income (an equal cash grant given to every citizen) can be modeled quite simply as a refundable tax credit, and doing so, obviates UBI as a policy to implement immediately rather than conduct pilot studies or other research. I will also use this paper as a financing introduction useful for reading my other proposals.<br />
<br />
<b>Refundable tax credits</b><br />
Most tax credits in Canada are non-refundable: If they bring your income tax balance below 0, you do not get a refund. A refundable credit is a tax credit that pays a refund even if your income, and thus tax bill, is too small to be larger than the credit.<br />
<br />
<b>The 2016 Canadian Budget: refundable child tax credit</b><br />
<a href="http://business.financialpost.com/personal-finance/family-finance/federal-budget-2016-promises-to-help-middle-class-wallets-while-targeting-wealthy-canadians-a-classic-soak-the-roach-scheme" target="_blank">The recent budget</a> includes a fairly generous refundable tax credit. <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://wpmedia.business.financialpost.com/2016/03/2016fedbud-03-child_benefits.jpg?quality=60&strip=all&w=605&h=651" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://wpmedia.business.financialpost.com/2016/03/2016fedbud-03-child_benefits.jpg?quality=60&strip=all&w=605&h=651" height="640" width="594" /></a></div>
<br />
<br />
It has an associated 2 tier linear clawback tax rate. The liberal government and other prominent politicians have characterized this as a form of basic inccome. Normally, targetted clawbacks violate basic income principles, but this program is pretty good in that the clawback/tax only starts at $30k income, and there is a somewhat gradual cutoff at relatively high income rates.<br />
<br />
<b>Liberal Pronouncements on deserving, less deserving and undeserving Canadians</b><br />
<ol>
<li>There was no call for a pilot study or social research prior to implementing this refundable tax credit, to determine who deserved what amounts the most, or determine economic consequences . </li>
<li>Non parents are undeserving of aid. Parents with fewer children are less deserving.</li>
<li>The kink in the curve from $30k to $70k income is regressive, and insists that lower middle class income parents are less deserving than higher income Canadians. (they deserve a higher clawback rate)</li>
<li>Highest income parents do not deserve to pay for any part of the program (get 0 benefit, but don't have a negative benefit/tax)</li>
<li>A straight line can be drawn from the 0 benefit point and $6400 benefit point, and it would perfectly overlap the benefits from $70k to $185k income. Thus, the cost of increasing the benefit to the deserving under $30k income parents is entirely borne by punishing parents earning $30-70k.</li>
<li>A different straight line that is steeper but provides a higher benefit at 0 income could have been drawn, and therefore, low income Canadians are fundamentally less deserving for not having a straight line benefit.</li>
<li>One such straight line would cross the old conservative program (dotted line) at 28k income and $120k income. It would cost less than the Liberal program, but provide more for everyone under $120k income (compared to dotted line), and more than the proposed for every parent earning under $18k income.</li>
<li>That line could be shifted up with the same slope (clawback tax rate) until its cost is identical to the proposed program, and would result in even higher basic child benefit, and even greater benefit to those earning under $20k and $70k.</li>
</ol>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
The inescapable conclusion is that the Liberal government loves parents more than Conservatives, but has a special deep love for parents with incomes between $18-30k and $70-140k, and special deep contempt for parents with income below $18k, between $30-70k, and over $140k.</blockquote>
</blockquote>
<br />
<b>The value of progressive child benefits</b><br />
From the perspective that raising children is a gift to society and necessary for its future prosperity, it is justifiable to offer progressive or flat tax benefits to support such choices. Yet every kink in the above curve that decreases in slope is a regressive kink placing more tax burdens on lower income groups below the kink. Their claimed goal of eliminating child poverty is insincere if they fail to understand that parents with income below $0-25k need more help than those with income of $30k. A perfectly straight curve (flat tax) better achieves poverty elimination, and doesn't demand an explanation for why the Canadian government hates people in the extra punished groups.<br />
<br />
<b>Does the Canadian government hate single Canadians aged 18-65?</b><br />
Its not the case that this group does not receive tax credits and programs, and so just because they are outcast from some programs is not an expression of hatred from their government. CPP is a direct benefit to the contributor. OAS promises to one day free you from the slavery-equivalent-life-pressures you must experience until 65. EI, disability, welfare, housing assistance, and labour laws (minimum wage, overtime) are fundamental acknowledgements that dystopian slavery pressures must be counterbalanced with conditional dignity patchworks. Earned income tax credits, and student assistance are other conditional programs meant to encourage constructive social participation.<br />
<br />
<br />
<b>Replacing programs and non-refundable tax credits one at a time</b><br />
Any program or tax credit can be replaced with a refundable tax credit at equivalent cost. As a simple example the basic and spousal Canadian federal tax credits are equivalent to $1750 each clawed back at 15% of income. As non-refundable tax credits these just work as if taxable levels of income start at $11500 for singles or $23000 for couples. A refundable tax credit of the same amount would not affect those who earn over those levels, but would benefit those who earn less. An equivalent social cost amount might be $1650 refundable tax credit to account for the slightly higher tax expense of providing refunds to those currently ineligible. Canada has a patchwork of antipoverty programs, some with considerable administration cost and waste, and so noone has the (public) view that the poor should not receive aid. If enough tax credits and programs can be eliminated (replaced with refundable tax credits), then poverty can be directly eliminated as well, all without bureaucratic burden on the poor or tax payers.<br />
<br />
<b>The US Food stamp program (SNAP)</b><br />
Is a department of agriculture program, that by definition serves the agriculture industry, and provides those with income below $14000 and cash balance below $2000 (higher for larger families) that allows recipients to purchase agricultural goods with stamps. An average benefit of $133.08/mo cost $76.6B (in total direct benefits) implies 48M Americans received the benefit in 2013.<br />
<br />
These costs don't include policing individuals and businesses for failing to comply with Agricultural industry' subsidy mandate. It is for instance, illegal to trade them for cash, or to try to buy toothpaste and tampons with them. There is bureaucratic overhead as well. The direct cost to 100M US taxpayers is $766/taxpayer/yr. With policing/bureaucracy, lets pad this to $1000/taxpayer, for a benefit that averages $1600.<br />
<br />
Replacing the program with a $1000 refundable tax credit would have equivalent cost, but would upset current recipients since it involves a $600 benefit cut. However, that refundable tax credit would be $1000 tax cut to tax payers, and a $2000 refundable tax credit instead accompanied with a $1000 tax increase, would still be an average $1000 net tax cut ($2000 - $1000) to tax payers, and an average $400 benefit increase (2000 - 1600) to SNAP recipients. All without bureaucratic and restriction hassles. A $1600 refundable tax credit with $600 average tax increase is a net 0 cost/benefit option other than bureaucratic and policing hassles inflicted on people. A $2000 or $2300 option better reflects the maximum possible SNAP benefits. Each individual refundable tax credit policy replacement contributes to a holistic program that permit other programs and laws designed ot protect the vulnerable from a harsh world to be reduced or replaced when permission burdens for survival in the harsh world are reduced.<br />
<br />
<b>Profit potential in income equality</b><br />
Those who work depend on as many people as possible being able to afford their wares. Billionaires only want one car, phone, meal. The largest and most profitable companies all depend on many small transactions to earn their income. Income equality through taxes and redistribution directly enhances the profitability, amount and usefulness of work. It helps those with the highest incomes the most, because by definition, they have the highest share of the economy flowing through them.<br />
<br />
<br />
<b>Useful alternatives and supplements to UBI</b><br />
The SNAP replacing refundable tax credit proposal is a pure basic income. Any tax hikes to pay for the refundable tax credits are general and universal.<br />
<br />
<b>GAI</b> (Guaranteed Annual Income) is a refundable tax credit with a reasonably low targeted clawback rate that brings the benefit to 0 at a certain income level (The Canadian child benefit above is a GAI-structured refundable tax credit). Compared to UBI, poorer residents pay a larger portion of the program. And its less expensive. I recommend a <a href="http://www.naturalfinance.net/2015/11/ubi-funding-option-for-canada.html">$4000 GAI </a>(as supplement to UBI and other progams) with 10% clawback from incomes of 0 to $40k or $10-50k.<br />
<br />
<b>ULI</b> (<a href="http://www.naturalfinance.net/2016/02/unconditional-loan-income-ubi-pilot.html">Unconditional Loan Income</a>) is somewhat similar to student loans with income based (royalty) repayment terms. There is no application/purpose criteria (other than perhaps citizenship), and additional loan amounts (the ULI limit) can be withdrawn each year. This is even less expensive than GAI for the same royalty/clawback rate as more of it is repaid individually over a lifetime. It can be partially funded by private and financial sector, and is eligible for central bank intervention/funding instead of fiscal funding. I recommend that ULI (with maximum 2% interest, and 20% royalty rate) be used to supplement minimum income alternatives such that expensive and wasteful programs (whose justifiable income support threshold is too high to achieve through UBI alone) can be eliminated: Student loans, affordable housing, R&D/Entrepreneurial tax credits and programs, farm and other corporate welfare assistance. Business ULI would be a personal loan whose proceeds are used for direct business investment. The personal responsibility avoids all scamming potential.<br />
<br />
<b>Citizens Income</b> is a refundable tax credit for citizens only. Refundable tax credits in general apply to residents (who have tax applicabilty independently of citizenship). Nationalist appeal prefers a citizen only payment, and it is the best use of excess tax revenue collection. I recommend a variable citizen dividend supplement over and above core minimum poverty and welfare replacing refundable tax credits. It can also be used to repay personal ULI balances thus making that program even cheaper and private funding friendly, and without a citizenship criteria.<br />
<br />
<b>Carbon tax funding</b> is singled out from other tax funding options because providing a refundable tax credit based on driving up the cost of gasoline to $6-$10/gallon and fossil fuel based electricity to 20c/kwh is an antipoverty program that directly incentivizes conservation, renewable electricity, and electric/alternative fuel driving. There is no need for research promotion, or special renewable credits. Simply, everyone interested in saving money/pocketing the carbon dividend just makes the individual choices necessary to save the planet and improve their individual economic outcome simultaneously.<br />
<br />
<b>Flat tax</b> is singled out because refundable tax credits do not grant net cash to high income earners. Only low income earners. A flat tax with substantial refundable tax credits creates a more progressive tax system than we currently have: negative net tax rates for low income earners, 0 for middle, and positive tax rates that increase with highest incomes. It does so even when lowering the highest marginal rates. A flat tax doesn't prohibit traditional tax credits but they are discouraged.<br />
<br />
<b>Elimination of investment income tax credits</b> along with equalization of corporate and flat personal tax rates, <a href="http://www.naturalfinance.net/2016/04/the-panama-papers-republicans-tax.html">business expense deductibility for dividends, and cashflow based tax accounting</a>. A substantial funding generator that lowers tax rates and increases refundable tax credits.<br />
<br />
<b>Surtax on investment profits</b> is another substantial funding generator, that offsets better/fairer deductibility of investment losses.<br />
<br />
<a href="http://www.naturalfinance.net/2015/11/ubi-funding-option-for-canada.html"><b>Elimination of payroll taxes</b></a> is justified by funding social safety nets from general taxes rather than personal insurance schemes. UBI is a safety net that applies to people with all income sources, and so should not be funded purely from lowest income employees, and businesses should not be penalized for hiring employees rather than machines or contractors.. <br />
<br />
<b>Recommended mix of policies</b><br />
Combined Canadian Federal and Provincial tax collections as a percent of income is only 15%. With the above tax changes and a 28% federal and "average" provincial tax rate (before consdiering investment surtaxes that lower this rate), $8k UBI/refundable tax credits and $4k additional GAI is funded for 21M Canadians, and without program elimination (or change to senior benefit programs). ULI instead of GAI, would allow the GAI/ULI amount to increase to at least $8k at same cost. Excess social revenue resulting from direct economic growth and earnings stimulated from refundable tax credit programs, would be paid as a social dividend that repays any ULI balance. Savings from the elimination of EI, welfare, disability, cpp, business and student welfare can fund the social dividend and $5k extra education and business restricted ULI that could include coverage for text books, computers, and tools.<br />
<br />
While it scares many people, a carbon tax sufficient to fund a $4000 dividend should be used to fund primarily non-citizen restricted refundable tax credits. Though lower amount may be substituted. EITC and child benefits have not been touched, though IMO, they should be lowered in exchange for higher general refundable tax credit.<br />
<br />
<b>Smaller plan options</b><br />
While my plan achieves well in excess of $21k annual refundable tax credits and unconditionally-accepted loan access sufficient to eliminate poverty in all family sizes and budget discipline circumstances, refundable tax credits of any size are beneficial with the critical mass improvement point beginning at the level that eliminates the conditional welfare system. <a href="http://www.naturalfinance.net/2016/03/manitoba-green-party-basic-income.html">The Manitoba GAI program at just $6300/yr is an excellent example of this</a>.<br />
<br />
<b>Modifying federal tax credits at the provincial and municipal level</b><br />
Refundable tax credits can be implemented at the provincial or municipal level by modifying/removing tax credits applicable at "higher" levels. There is no obligation to follow federal or provincial tax policy, and leadership on refundable tax credits is required that likely necessitates correcting perversions maintained at other taxation levels.<br />
<br />
<b>No pointless delay pilot-study/research tactics</b><br />
If you lean towards cautious, patient, and deliberate approach to UBI/refundable tax credits, then support introducing fewer of them initially, and then increase them as you become more convinced.<br />
<br />
<b>Opposition to refundable tax credits fundamentally is one in support of oppression and slavery</b><br />
From the left, insisting on bureaucratic empires that determine deserving aid recipients, and on unions, minimum wage and other labour laws to combat employer oppressiveness, is still insisting on an oppressive system that needs to fund you to protect the rest of us if we ask for your permission nicely.<br />
<br />
From the right, insisting on a harsh brutal world that forces the most desperate to beg for your permission to employ them, or give them credit, entirely on the terms you command, and terms made less generous the more harsh and brutal the world, is also more direct support for oppression.<br />
<br />
Slavery is not evil because it affected black people or provides the owner the right to piss on you. <br />
<br />
<blockquote class="tr_bq">
Slavery is evil because it allows the slaver unfair market control over the slave's labour.</blockquote>
Not only is promotion of unfair markets evil, but so is<a href="http://www.naturalfinance.net/2013/02/nearly-all-of-us-support-slavery.html"> accepting slavery but wanting to regulate it</a> to an 8 hour work day with strict limits on the frequency of whippings.<br />
<br />
Refundable tax credits sufficient to allow people to survive without the need for others' permission inherently provides a fair labour market with the power to refuse employment offers and compete, and a fair society without undue king's authority.<br />
<br />
Beyond evil, opposition to UBI is economically stupid. Taxes and redistribution do not harm the tax payer, as the funds flow indirectly (but assuredly) back to them. That it is economically stupid, should not cause us to understand that mere education is needed to convince opponents. Power, command and control thirst for small self centered empires can be more valuable to the self than participation in greater social financial success.<br />
<br />
<b>The fear of laziness</b><br />
Both those who want to work and those who do not are better off with refundable tax credits. Everyone that works has always had all of their income indirectly paid by those who can't or don't want to do the work. The more people who choose not to work due to UBI being sufficient for their needs, the more work is available to those who wish to work.<br />
<br />
Even if inflation results from laziness, this substantially benefits workers, and incentivizes a sufficient number of work indifferent people to take easy to find well paying jobs. So society gets all of the workers it needs.<br />
<br />
Self driving trucks promise 75% cost savings. Taxis and public transportation could save 90% if self driving. Technology will fill in any labour supply shortages, and just as you prefer to live life without the need for manual collection of water and firewood, you do not want manual driving imposed on you. If wages rise as a result of choices not to work, then automation that saves us all from work, gets accelerated.<br />
<br />
Opposition to automation presumes the nonsensical desire to return to manual water and energy collection. Generally, opposition to automation is an insincere euphemism for protecting the empire of work that you are trained to do. For actual work that you want to do or have done, in comparison, technology and processes that make that work easier or faster are always welcome.Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com121tag:blogger.com,1999:blog-2467928492793719077.post-14608436064480152292016-04-29T05:52:00.000-07:002016-04-29T10:32:04.372-07:00Linkedin Q1 - 2016 results<span style="background-color: white; color: #333333; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 15px; line-height: 20.7900009155273px;">Linkedin
is a company worth fairly $5B today, that could one day hope to be worth
$<span style="font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif;">7B-</span>10B, if it performs perfectly. Its market value is near $16B.</span><br />
<span style="background-color: white; color: #333333; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 15px; line-height: 20.7900009155273px;"><br /></span><span style="background-color: white; color: #333333; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 14.8500003814697px; line-height: 20.7900009155273px;"></span><span style="background-color: white; color: #333333; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 15px; line-height: 20.7900009155273px;">Continuation of my chronicling the eventual collapse of LNKD's stock value. </span><a href="http://www.naturalfinance.net/2016/02/linkedin-q4-2015-results.html" style="background-color: white; color: #006677; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 20.7900009155273px; text-decoration: none;" target="_blank">Previous entry</a><br />
<br />
<a href="https://s21.q4cdn.com/738564050/files/doc_presentations/2016/1Q'16-Quarterly-Results-Deck-Final.pdf" target="_blank">results </a><br />
<br />
<ul>
<li>record low growth rate of 26%, excluding $55M in learning revenue that was not part of last year's operations. $807M revenue. Learning revenue was also 26% higher than 1 year ago's standalone Lynda.com revenue of $43.5M</li>
<li>record low mobile visitor growth. Down to 25%.</li>
<li>record low US and Other Americas growth. Even with learning revenue which has been explained as predominantly US focused, US talent revenue growth at lowest point since acquisition. International talent solutions also show record weakness.</li>
<li>2nd largest all time operating loss of $66M. The record was Q2-2015 which included significant restructuring charges related to Lynda.com. Its largest ever tax rebate keeps its net income loss to only its 3rd highest point.</li>
<li>5th consecutive quarterly loss. At least, 9th consecutive quarter with income below $3M</li>
<li>Most expense growth matches approximately revenue growth. 30% or so. The exception is depreciation and amortization which had over 95% growth. Stock compensation up 40%.</li>
<li>Operating loss for the quarter increased $50M over last year. Mostly due to the last 2 items outpacing revenue growth. Equipment purchases were even higher than depreciation (assuring further increases)</li>
<li>record high depreciation ($95M - 50% growth), amortization ($47M - 400% growth) and stock based compensation.($146M) </li>
<li>Free cashflow less stock compensation continues the negative quarterly string. -$71M.</li>
<li>Comparing to Q4-2015 is appropriate because revenue was almost the same, but operating costs were $40M higher. $10M more marketing spend to get the same sales.</li>
<li>Comparing to the entire fiscal year of 2013 is interesting because Q1 revenue is a little over half that of the entirety of 2013. Depreciation and amortization in Q1 ($142M) was higher than all of 2013 ($135M) (still about 75% of 2013 without amortization). Every other expense category is still a higher percentage of revenue than it was then.</li>
</ul>
Guidance<br />
<ul>
<li> $890M revenue guidancce for Q2 is $865M excluding partial results for last year's lynda.com operations. Record low 21.3% core growth. The same poor guidance tone as given last quarter. Roughly the same revenue performance as this quarter, with $5M more SBC, and $2M less depreciation. For $29M more revenue, $23M in additional other non-amortization operating expenses: $3M extra "profitability". </li>
<li>Full year revenue guidance is increased by $9M compared to last quarter's announcement. But full year ebitda (bs earnings) guidance is lowered $2M. (explained in call intentionally as increased "investment areas, and building product" platforms in all 3 categories.)</li>
<li>Forecasts compared to last quarer include: an increase of $15M in full year depreciation. A decrease of $7M in amortization.. So, last quarter's dismal $400M+ forecast operating loss is increased by $10M. Somewhat surprisingly, LNKD expects $50M less in stock compensation compared to last quarter's forecast, and so an offsetting expense increase is expected.</li>
</ul>
<br />
<b>Still very bad</b><br />
The high net income loss without a special reason given for the tax gift, and so high operating loss doesn't make up for the slight uptick in its marketing and subscriptions business. It did some TV advertising that would explain an uptick in those segments with profit deterioration. The core deterioration of hiring solutions, its main line of business, accelerated rapidly. Hiring solutions not only showed a record low growth rate, it is 5% lower than last quarter's record low growth rate. (27%). It can't talk about how great all of its products and platforms are being engaged, and show this deterioration.<br />
<br />
<b>Comparison to Q4-2015</b><br />
Sales were almost identical: 861M vs 862M. Noteworthy mix differences include $10M Sales cost increases. $8M increase in SG&A with $4M stock based compensation increase. $11M total stock based compensation increase. On the revenue side, talent solutions dropped its QoverQ growth from 10% last year to 5%. Tracking its main business line to drop to 20% growth for the year.<br />
<br />
<b>Plans for future cost containment</b><br />
While committing to losing more money through investment this year, and through "late 2017", there's a $50M reduction (from plan... still increase) in this year's stock compensation plan, and an expectation for the year of "only" a 15% increase over last. This is cost containment compared to 24% revenue growth. I congratulate them for the comment in the cal: "SBC is a real expense/"<br />
<br />
Its overall expenses are likely to still keep going up at least through 2017. There is a vague (relative to my ability to follow) reference that at the end of their through-2017 investment program, 40% operating expense savings will occur in cost of revenue, which would be a 548 basis profit margin improvement. The problem is that it has a -767 basis point loss margin, (906 basis point operating loss + other expense margin) and so even that plan together with 100 basis points of stock based compensation savings, it is not enough to reach profitability. Furthermore, continued massive depreciation expense increases are assured through 2019 putting pressure on profits until then.<br />
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Its also hard to understand that their equipment/datacenter investment program results in switching on a cost of revenue savings of 40% starting in 2017, rather than the less generous understanding that they have been benefitting all along from the equipment/datacenters they have spent a lot on, and the 40% savings is just the total cummulative benefit going forward. ie. not 40% savings from current levels, but 40% from what it would have been had they done nothing, and so may be 20% or so from current levels, and offset by higher depreciation expenses.<br />
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<b>Shareholder Performance Margin</b><br />
<a href="http://www.naturalfinance.net/2015/05/a-financial-metric-shareholder-margin.html" target="_blank">SPM</a> is a performance metric that gives credit to a company for its R&D spending excluding it from expenses. LNKD's poor results this quarter can't really be blamed on R&D (expense did rise a bit more than revenue), and so its SPM even worse than if its loss was due to intense R&D spending.<br />
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LNKD's SPM this quarter is Net income (-$45M) - Other expenses (12M) + after tax(35%) cost of R&D ($154.7M) = $97.7M or 11.3%. This is deterioration over Q3-2015 (12%), but an improvement over Q1-2015 of 10%.<br />
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One interpretation of SPM is the imaginary profit ($97M) that would have resulted if 0 were spent on R&D, but the more useful interpretation is that the SPM determines the break even revenue benefit required for each $ spent in R&D. At 10% SPM, each $ of R&D must create $10 in revenue. 11.1% SMP: $9 revenue. 12.5% SPM: $8 revenue. Companies such as FB, GOOG, and MSFT all have SPMs above 30% which means they only need $3 in extra revenue to break even for every $ spent on R&D. LNKD is a sales intensive company with no profitability potential, and so a much higher bar for its R&D efforts.<br />
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LNKD's SPM isn't even as good as calculated if we consider their mysteriously large income tax benefit. In fact, the company has warned that it will take a $100M tax charge next quarter. The default explanation is that previous tax deductions were overstated. So, its tax policies aren't necessarily sustainable.<br />
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An alternate way of calculating SPM is to do it all pretax, and then take the normalized (35%) tax rate off the total to get a shareholder relevant result "exclusive of tax games": Operating income (-66M), other expenses (-12), R&D (238) total: $160M. $104M after tax. 12%. This looks better than the initial calcualtion but compared to Q4-2015, (0.65*185/862 =) 13.9%, and Q1-2015: (0.65*134/638 =) 13.65%, it is a significant deterioration to both.<br />
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<b>Innovation</b><br />
Companies such as Twitter can have hope that their platform catches on more, but also have imaginable monetization of products such as periscope. LNKD, however has no major growth drivers or potential. Similar to YHOO, EBAY, YELP. It can iterate new versions that drive engagement in the short term, but it has to keep loosing money to get these pops, and even if it makes the service better, its unclear how it drives revenue and profitability . Its low SPM means its innovation efforts have to have big payoffs, but none of them appear to have that potential. Though Twitter is still losing money, it has shown a pretty consistent trajectory of losing $80M less year over year. So it is getting useful growth. LNKD is going in the wrong profitability direction, with no growth headroom. <br />
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<b>Valuation</b><br />
Last quarter, I calculated an optimistic $7B 2027 valuation based on annual sales increases of $600M, and after tax profit increases of $35M per year starting in 2018. $7B valuation is based on $350M annual profit ($500M pretax) with 6% sales growth. Without sales growth, double the profitability is needed to have the same valuation. I was assuming cost general containment similar to what was announced.<br />
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Information provided this quarter suggests that there is at best a delay to profitability start. Its possible that the steps they announced eventually are part of a higher profitability plan, but it will be 2019 to more likely 2021 before depreciation expenses come down enough for break even without other measures. (this conclusion is based on tea leave parsing of comments and not completely reliable). 8 years of $50M profitability increases ($75M pretax) is an $8B valuation.<br />
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The case against such a success story is the sales expense growth it has pursued to achieve its current struggles. It must find 1267 basis points of profitability from here to get to a $7B valuation on $10B sales. 1767 points to get to $14B. Sales expenses will be a headwind in this as it expends more chasing higher hanging less ripe fruit. The most generous possible reading of their 40% cost of revenue improvement would still have high continuous equipment replacement capex, and the announced "plans" only create 648 profitability points of improvement.<br />
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There's no information given this quarter to materially change previous valuation. LNKD is stepping up its futile overspending efforts. Though it claims investment in some future cost savings, it is also overspending in sales and administrative categories. In my opinion, the company is trapped into chasing growth in order not to be perceived like Yahoo (stagnant money loser), but Yahoo's problems are also based on seeking not to be perceived like Yahoo. They have to promise something and then spend to achieve it.<br />
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<br />Pascal J.http://www.blogger.com/profile/04550838631823938140noreply@blogger.com8