Monday, April 25, 2011

Sarah Palin On The Budget Wars

Sarah Palin said recently that, in their budget battles, the Republicans in Congress need to learn how to fight like a girl.

Now that is a great line.

Thursday, April 21, 2011

Straight Talk On The Budget

Yes, we do have a serious federal budget deficit problem. The deficit this year alone is $1.5 trillion. The entire federal debt is close to $14 trillion, and it has tripled since Obama took office.

That level of debt is unsustainable.

Let’s get back to basics for a minute. A “deficit” occurs when you spend more than you have.

Consider credit cards. A person can go on a shopping spree and run up a big credit card bill without actually having the money in hand. Afterwards, they will have a bunch of goodies, but they also have a big bill to pay. Maybe next month, they do the same thing. Now they have even more goodies, but an even bigger credit card bill. At some point, the whole operation collapses. They hit the limit of their credit card, they can’t pay the monthly payments, collection agencies are calling, and it’s a huge mess.

That’s what’s happening in Washington, except that when the government hits it’s credit limit, they just raise the limit.

President Obama gave a speech recently outlining his proposal to significantly reduce the federal budget deficit. In that speech, he made a point of saying that politicians are prone to talking about reducing waste as a way of cutting spending, but that, realistically, the budget deficit now is so large that just cutting waste will not solve the problem. He then went on to say that a key component of his deficit reduction plan is to reduce the cost of Medicare, Medicaid, and the military by finding ways for them to operate more efficiently. Reducing waste, in other words. So in the first part of his speech, he said that focusing on waste won’t do it, and then he outlined a plan that is primarily based upon reducing waste.

The President’s plan also calls for raising taxes on those despised “rich”. Obama talks about the “rich” as though they hit the jackpot in Las Vegas or something. He says things like “those who are most fortunate in our society”, and other such polemics. He seems to feel that the “rich” are somehow bad people, that they got where they are by nefarious means, that their money is tainted. He apparently has no concept of that great American phenomenon of upward mobility. He seemingly cannot relate to people who start with little, work hard their whole life, manage to get a little bit ahead, and then enjoying the fruits of their labor. Obama regards them as fair game.

But as you see Obama up there demonizing the “rich”, and saying they can easily afford to pay “a little more”, just remember that it only a matter of time until whatever he does to the rich will also apply to you. The “rich” in his world are anyone who actually has a job and pays taxes, rather than being on the government dole. Today, Obama says the “rich” is anyone making more than $250,000; before long it’ll be anyone making over $$200,000, or $150,00, or $100,000. The cut-off point is completely arbitrary.

The cold hard facts are that the rich already pay the bulk of federal income taxes, which Obama doesn’t want you to know, because then he couldn’t demonize them as a diversionary tactic.

IRS data from 2008 (the last year data is available) show that the top 1% of income earners paid 38% of all federal income taxes. Yes, 1% of the people are paying 38% of the total federal income tax. In that same year, the top 10% of income earners paid 69%, and the top 50% paid 97% of the total federal income tax burden. The bottom 50% of earners paid only 3%.
The reality is that the “rich” can’t be taxed enough to solve the federal budget deficit problem. If the government took all of the taxable income of the top 1% of earners, it would generate $938 billion, which wouldn’t pay the current year’s $1.65 trillion deficit out of a $4 trillion budget, much less the total $14 trillion federal debt.

For Obama to stand there and say we can solve this problem if only the “rich” would pay “a little” more is completely dishonest, as the facts show. It tells you that he really has something else in mind.

And what might that something else be? The only way to solve the federal government debt and deficit problem via taxes is by drastically raising taxes on the middle class. This talk about soaking the rich is to make the middle class think they won’t be paying higher taxes, while Obama is covertly scheming to do just that via a European-style value added tax (VAT) which would hit everyone, or cap and tax which would hit everyone, or something else.

The real problem with the federal budget deficit, though, is not that taxes are too low on some people, it’s that the government spends too much. How long would any off us as individuals or companies last financially if we consistently, month in - month out, year in - year out, spent more than we had? A very basic principle of sound financial management is to stay within your means spend only as much as you have. But the federal government seems totally incapable of doing this, or even understanding the concept.

The U.S. Treasury Secretary recently said that we can’t solve the government debt problem by cutting spending. Oh, so I guess we solve the debt problem by continuing to spend money like a drunken sailor, in his mind.

Another dose of reality is that the federal budget deficit and debt problem can be addresses only by restructuring Medicare, Medicaid, and Social Security, because that’s where the bulk of the money goes.

It would be immensely helpful if the President of the United States would have an honest, frank, adult discussion with the American people on all of this rather than the demagoguery, deception, double-talk, and posturing that we have gotten from him so far.

Sunday, April 10, 2011

ObamaCare and Cynthia

We recently marked the first anniversary of the greatest single assault on individual liberty in my lifetime, and maybe since the founding of the country: ObamaCare. As we continue to debate what the real effects of that law will be, I think back to an episode that occurred almost twenty years ago and which has special meaning to me.

Twenty years ago a fragile, extremely premature baby girl was born. That person is now a normal, healthy, bright, energetic young woman in college studying creative writing and journalism, getting ready to go out into the adult world on her own.

At the time of her birth, it was not at all a given that she would make it this far. You see, Cynthia was born at twenty-four weeks gestation, and weighed in at one pound eleven and a half ounces. The birth was life threatening to mother and child. After she (and her mother) survived the birth, it was unclear whether Cynthia’s life span would be measured in hours, days, months, or years. She was right at the edge of what was considered to be somewhat viable for prematurity at the time.

The doctors in the Stanford Children’s Hospital neo-natal intensive care unit told her parents that her chances of long term survival were somewhere around twenty-five percent, but that even if she made it for the long term she would most likely have some serious problems of one sort or another with brain development, eyes, heart, lungs, digestive system, or just about anything.

Cynthia spent the first five months of her life in the hospital. That’s not five days or five weeks, but five months. She had highly specialized medical care around the clock. There were many ups and downs. The doctors more than once signaled to Cynthia’s parents that she might not live through the next twenty-four hours.

But a miracle started unfolding. Every day that Cynthia lived without a serious incident improved her chances of a more positive outcome. And gradually, ever so slowly, she started getting better. Some of the major health threats began to fade. Brain bleeding did not occur; instead, her brain slowly developed normally. Her heart grew and functioned properly. Her digestive system improved. Her eyes progressed and it started to look as though she would not be blind; that she might even see normally.

One significant milestone was when she got off of the respirator and started breathing on her own. Then she was able to be taken out of the incubator and be held by her mother. She started being fed orally instead of intravenously. She followed an object with her eyes. Then she actually cried out loud, a major developmental achievement.

Another major milestone was when she got out of the neo-natal intensive care unit and went to the regular neo-natal unit.

And on one glorious day, little baby Cynthia, at the tender young age of five months, was well enough to go home for the first time. By this time, she had fattened up to a whopping four and a half pounds.

Although the major dangers were behind her, Cynthia was still not completely out of the woods. She had an oxygen tube under her nose and a tank at home and one that was portable. She used this for several more months, but her lungs continued to develop and she got off of the oxygen.

Cynthia continued to grow, but faced more health challenges. She showed a profound lack of speech development, but responded to speech therapy. At toddler age, she started walking on her knees, but couldn’t stand up due to some ankle problems. She had progressive casts put on both legs; these are casts that bend the foot upward thus stretching the tendons in the ankle. The “progressive” part is that the casts were taken off every couple off weeks and new ones were put on that bent the foot and stretched the tendons even more. The she moved to progressive braces that work in the much the same way except that instead of being replaced, they were tightened up periodically by her parents. Finally, she walked normally.

As she went through school, there were learning issues. Specialized tutors and other programs addressed these, and Cynthia did well in school. In some areas, she excelled, particularly languages.

Cynthia played Little League Baseball and then softball, all the way through high school. She played some basketball. She learned to swim.

Now, Cynthia is a sophomore in college studying creative writing and journalism.

And as you have probably figured out, this story is dear to me because Cynthia is my daughter.

I am a religious person, and I still think about what role God played in all of this. I am sure there was a role, but I don’t claim to know what and why. I’ll find out someday.

But one thing I am sure of is that the miracle of Cynthia came about here on Earth because she had access to the best, most advanced medical care in the world. Her years of treatment were paid for because her father had a medical insurance plan available to every employee where he worked, from the president of the company on down. The various specialists that saved her were there not because of some government bureaucrat or some government mandate or some government run health care system, but because of a free market health care system that is the envy of the world.

A few days after Cynthia was born, I thought I had better find out what this was all going to cost. I called the hospital billing department and asked. They said her treatment would cost an average of $5000 per day. The doctors had told us that Cynthia would be in the hospital for a minimum of 90 days. Do the math. The first three days of her life cost $27,000. The final bill, years later, was over $800,000, plus what we had spent on our own for tutors and such.

And through it all, I was never asked by anyone, anywhere, how I was going to pay all of those bills. Not once. Cost or how the bills were going to be paid was never a consideration of the doctors or hospital in deciding what treatment Cynthia would receive.

I do not want to think what this ordeal would have been like if some nameless, faceless government bureaucrats in a far off city were making decisions about how much my daughter’s life and well being were worth given how many other people the government had to take care of with a limited budget.

Yes, Cynthia’s story is a medical miracle. But America has always been a place of medical miracles. Since 1970, American doctors have won more Nobel Prizes for Medicine than all other countries combined. According to McKinsey and Co., thousands of foreigners come to the United States every year for medical treatment they cannot get at home – due to rationing or simply because it is just not available.

Consider cancer, as just one example. Compared to the U.S., breast cancer mortality is 9% higher in Canada (according to the government statistics of each country), 52% higher in Germany and 88% higher in the United Kingdom (according to studies published in Lancet Oncology). Prostate cancer mortality is 604% higher in Britain.

Other studies show that patients who need knee and hip replacement, cataract surgery, and radiation treatment wait months longer in the United Kingdom and Canada than in the United States.

The facts and history are irrefutable. The American health care system is far better at fostering innovation and responding to patient needs. On the other hand, the history of government run health care systems is there for all to see. Are we going to learn from that history or are we doomed to repeat it?

Thursday, March 31, 2011

Learning From Events In Japan

I have a Master’s degree in electrical engineering, and I worked in the electric power industry for over ten years.

The amount of misinformation and outright wrong information that has appeared daily in the various media since the earthquake and tidal wave hit the nuclear power plants in Japan is startling. These people really ought to either keep quiet or get it right. To cite just a few examples, I heard a TV newscaster say that the control rods in the reactor were spinning (they don’t); another one was standing in front of a display board waving his arms around saying the heat from the reactor is applied to the turbine (it isn’t); one of them said a nuclear cloud was heading toward Tokyo (it wasn’t); one reporter who is apparently a kook said, right there on the radio, that millions and millions of people in Japan will die of leukemia and thyroid cancer (they won’t); then it was reported that radiation has been detected on the West Coast of the U.S. (a billion times lower than any danger level, we later learned), etc. etc. etc. All of this, and more, was right there on major networks and in major newspapers. How do these people have any remaining credibility?

Let’s review the technical basics of generating electricity and how electric power plants work. When we get through this information, you will know more about this subject than most of the talking heads on TV.

Electricity is generated in two ways: 1) When a conductor (a wire) passes through a magnetic field, and 2) by means of a chemical reaction, i.e., batteries. We will discuss the first method, since it is the one used in electric power plants.

I am excluding static electricity from this discussion, since only small amounts can be produced in that form.

To generate electricity by moving a conductor through a magnetic field, we need first to create the magnetic field. This is easily done with magnets. You probably did the little experiment in science class where you put a piece of paper over a magnet, sprinkled iron filings on the paper, and observed the interesting lines that the filings aligned themselves in. That was the effect of the magnetic field emanating from the magnet.

OK, so now we know where to get the magnetic field. Next we need to get some conductors, or wires, moving through it. This is most readily done by wrapping the wires around a rod (a “rotor”), and then causing the rotor to spin in close proximity to the magnets. When this happens, electricity will be generated in the wires that are wound around the spinning rotor. This is how a “generator” works.

We will also connect some other wires (transmission and distribution lines) to the generator to get the electricity to wherever we want it.

We won’t go into transformers.

OK, so somehow we must get the rotor of the generator to spin. We could do this by connecting a diesel (or gasoline) engine to it, and this is sometimes done in special situations. In most large scale electric power plants, though, we connect a steam turbine to the generator to get the rotor to spin. A water turbine could also be used (as at the Claytor Lake dam).

A steam turbine is another device that spins on an axis. A steam turbine contains a series of specially designed blades. Steam is admitted into the turbine and causes it to spin by pushing on the blades. It’s a type of steam engine.

Finally, we have to create steam, and a lot of it. We have to boil water on a large scale. That means we need a heat source that can produce a lot of heat

A large amount of heat is most readily created by burning something. In steam power plants, coal, oil, or natural gas can be used. Over 50% of the electricity in the U.S. is created in coal fired power plants, for example.

Another way to create a lot of heat is through a controlled nuclear reaction. This is what happens in a nuclear power plant. A nuclear reaction creates heat to boil the water to create steam to spin the turbine and generator rotor, thus producing electricity.

Control rods are in the nuclear reactor. They are made out of a special metal and are used to regulate the intensity of the nuclear reaction. This is done by moving them up and down into or out of the reactor core.

The nuclear reactor must also be cooled, since even at its lowest setting, it will create so much heat that it will literally melt itself (a meltdown). The cooling is done with water pumped through the reactor core. If that water flow stops, the reactor will over heat, much like your car engine if the water pump fails.

The cooling water pumps in a nuclear power plant are powered by the electricity network in the plant. There is also a back-up diesel engine and generator to provide electricity to the pumps if the primary power supply fails. Finally, there are usually batteries that can keep the pumps running for a few hours if the diesel generator also fails.

When the tidal wave hit the nuclear power plants in Japan, the primary electrical supply was wiped out, as were the diesel powered generators and the batteries. The crisis at the nuclear power plants was caused by the tidal wave, not the earthquake.

The big problem with nuclear reactors is not the reactor, but the spent nuclear fuel. This material is highly radioactive, and will remain so for thousands of years. Disposing of it is a problem. Generally it is put into lead containers and then stored deep in a mountain in a remote area.

Now that we are armed with this knowledge, amid all of the media hysteria and hype, we can remain cool, calm, and collected. And we can notice some very pertinent questions that the media isn’t informed enough to ask.

1. Why were these nuclear reactors located on the coast in an earthquake prone area?
2. Given that they were on the coast, why did the plant designers not think of a tidal wave when doing their safety analysis?
3. Why were all six of the reactors in the same physical location where they were all susceptible to one natural disaster in that local area? Why weren’t they built in dispersed locations?
4. Why was the spent nuclear fuel stored at the reactor site instead of somewhere else, again to avoid a “single point of failure” problem?

These are the types of lessons we need to learn from the events in Japan as we move forward with nuclear power plants here in the U.S.

Saturday, March 26, 2011

Obama Would Rather Be President Of China.

From the current issue of "National Review":

"Is lassitude coming in with Barack Obama's gray hairs? Apropos of the Arab revolt, a friendly story in the New York Times reported that Obama 'has told people that it wold be so much easier to be the president of China.' Not so that he could wield, as per Thomas Friedman, dictatorial powers, but so that he might get less attention. 'No one is scrutinizing Hu Jintao's words in Tahrir Square,' an unnamed official explained. Obama picked the wrong job then, didn't he? Ambition, vanity, and a string of unearned successes may have persuaded Mr. Legislator-Who-Votes-Present to think that he could step up to the most demanding executive position on earth. What explains the troop of flacks, including Obamacons, who praised this man's character as they whooped him into office?"

Tuesday, March 22, 2011

Incoherence From Obama

In explaining the U.S. action in Libya, Obama said recently that Qaddafi must go, but that's not the mission of the Coalition forces now in action in Libya.

A few days ago, Obama was defending himself from being responsible for rising gas prices. He said that his policies have not cased gas prices to go up, but rather that his policies have actually resulted in the highest domestic oil production in seven years. His main energy policy has been to ban new offshore drilling and exploration. So he is telling us that banning off shore oil drilling has caused domestic oil production to go up.

Wednesday, March 16, 2011

Maybe Gov. McDonnell Can Help In Washington

Congress just passed another "continuing resolution", kicking the can of writing a federal budget down the road another three weeks.

Meanwhile, here in Virginia, we are doing just fine, thank you, thanks to Republican Governor Bob McDonnell and the Republicans in the state legislature.

In January of 2010, Bob McDonnell was sworn in as Governor of Virginia.He inherited a multi-billion dollar budget shortfall from his predecessor Democrat Governor Tim Kaine. One of the first things McDonnell did was announce that he would veto any budget sent to him that included any new taxes. With Republicans having an override-proof number of seats in the state legislature, that option was "off the table", as they say. The legislature then got to work and had an adult conversation on how to cut spending in order to balance the state budget. A balanced budget is required by the Virginia Constitution. The cuts were made, and yes, some wee painful, but the legislature did its job by producing a balanced budget with no new taxes.

It all took only six months.

Today our economy in Virginia is rebounding, unemployment is heading down, we remain fiscally solvent, and VIrginians are not saddled with higher taxes.

Because Virginia is governed in a fiscally responsible way and keeps taxes low, companies want to come here. NorthropGrumman, for example, relocated its corporate headquarters from Los Angeles to Richmond a few months ago and brought about 300 new jobs to the state in the process. On a smaller scale, in my own community, VIrginia Casting Industries relocated here from out of state and brought 20 jobs.

Maybe we should send Gov. McDonnell to Washington to help them with their budget problem that they don't seem to be able to solve.