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Michael Cain
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I'm pretty sure that all of them have gotten an earful about what's happening to DSH payments from their states' hospital associations. I suspect that it will take one or more of the for-profit hospital chains threatening to shut down in those states for it to make a difference.
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"It is worth noting that--at least from eyeballing the map--that this is overwhelmingly a rural problem..." For more than the last three decades, there has been a growing problem with access to health care in the rural counties, and especially in the "frontier" counties. Many (most?) states have some sort of "office of rural health care" charged with developing policies to try to deal with the issue: higher reimbursement rates; student loan forgiveness in exchange for a term of rural practice; investments in broadband and telemedicine. Moving to, or choosing to remain in, many rural counties means accepting a health-care system that is second-class in many ways.
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Who said it didn't work fine? My mild complaint was about a noted economist using language that didn't describe the financing accurately, not a criticism of the financing itself.
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On a unified federal budget basis, the Boomers' benefits will all be PAYGO -- some from current payroll tax revenues, some from new public borrowing, and some from the General Fund. The allocation between the last two will simply depend on how the Treasury raises the money to redeem the bonds the SSA is sitting on. Well, I suppose they could print cash and hand that to the SSA. The closest you can come to claiming that the Boomers' benefits were saved in advance is to claim that the lower income taxes or reduced borrowing made possible by excess payroll taxes was an "investment" that made the economy as a whole grow faster than it would have otherwise. IMO, that's a pretty weak claim.
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Perhaps picking a nit, but "So we require people to contribute to their own retirement through withholding for Social Security" can be misinterpreted. "So we require current workers to contribute to the support of current retirees, in order to justify having future workers contribute to the current workers' retirement" would be better. The large majority of my contributions have already been spent; when I begin drawing benefits in a few years, the large majority of that will come from younger workers' contributions. I understand that FDR believed he had to describe SS as a savings program in order to convince voters to support a public pension system, but that doesn't make it so. SS is, and always has been, PAYGO.
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Back in 2010, the Republican candidate for governor in Colorado claimed that Denver's similar bicycle plan was part of a UN plot...
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One of the simplest ways is bank loans, often arranged by the private equity fund in advance. For example... the bank, or a small group of banks, loans the company $8.7B due in three years at some interest rate. Under the terms of the note, the loan is secured by physical assets of the company, or has higher priority than any prior unsecured debt in the case of bankruptcy, and there are a variety of triggers that make the loan callable. Triggers might include missing an interest payment or the company's share price falling below a specified level for 30 days. For a big firm with established cash flow, this is a remarkably safe loan from the banks' perspective. How will the company repay $8.7B at the end of the three years? By taking out another $8.7B three-year loan, possibly from the same bank. In some cases -- the cable industry during its consolidation wave in the 1990s -- there was no intent to ever actually retire the debt; the continuing interest was simply regarded as another cost of doing business, like paying the workers. There are a surprising number of entities out there willing to make multi-billion dollar loans where the risk of loss is effectively transferred to those holding previously-issued bonds and stock. And private equity funds are adept at finding them.
Toggle Commented Jan 24, 2012 on Surowiecki: Private Equity at Economist's View
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Junk bonds are so 1980s. There are any number of ways for a corporation to borrow money other than by issuing bonds.
Toggle Commented Jan 24, 2012 on Surowiecki: Private Equity at Economist's View
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Capital gains realized in this year and spent on consumption should be taxed at the same rate as earned income spent on consumption. The IRS already collects essentially all of the information that would be needed to confirm calculations for this.
Toggle Commented Jan 20, 2012 on Paul Krugman: Taxes at the Top at Economist's View
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Bloix: "In 2007 (most recent data I could find), Arizona collected $1.19 for every dollar it paid to the federal government. Ilinois collected $0.75 for each such dollar." These simple-minded comparisons irritate me a great deal. Consider a variety of factors that differ between Arizona and Illinois. (1) A large number of elderly retirees move from Illinois to Arizona for the climate, taking their SS and Medicare/Medicaid dollars with them. (2) A substantial portion of Arizona is occupied by tribal reservations, which receive large amounts of federal dollars. (3) In the 1800s, the federal government *gave away* essentially all of its land holdings in Illinois to be used privately and generate taxes; in the 1900s, the federal government decided instead to retain its land holdings in Arizona. (4) In the 1800s, the federal government allowed Illinois residents to wipe out the ecosystem and drive large numbers of species to (at least local) extinction, with private benefits that continue to this day; in the 1900s, the federal government imposed significant land use restrictions to preserve ecologies and species. (5) The DoD spent, per-capita, much more on bases and facilities in Arizona than in Illinois; Illinois receives the same benefits, but without the land-use penalties.
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But this is the West, where for the last 100 years it's all about water management and precipitation averaged over multiple years. Last year, California filled reservoirs that had *never* been filled before; how are those doing? Southern California takes a rather large amount of Colorado River water; for that, look to the snowpack in NE Utah and North Central Colorado. Here, outside Denver, whether the parks will be green next July is not a matter of how much it rains in July (last year being an exception where the monsoon came early and heavy and it rained so much that water use was 50% of average), but how much snow the mountains get over the course of the winter.
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"For example, we close a lot of US bases..." The effects can also be uneven. If the Army closes Fort Carson, Colorado, the economy of the city of Colorado Springs and El Paso County take major hits, the state of Colorado a more modest one. How much of the Rapid City and South Dakota economies does Ellsworth AFB represent?
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"My point is that the central bank is constrained and cannot by itself produce what people want it to produce: Jobs." Hear, hear! Now if Bernanke would only admit it to Congress: "Members of the Committee, we can pump cash and cheap credit into large corporate America; we cannot make them hire."
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"This is why we have college students with massive debt. That did not happen in the 1970s." Having spent three years as a budget analyst for a state government, with a requirement to look at a number of historical trends, some remarks: State/local revenues face a political limit in the relatively narrow range of 9-12% of state GDP. Borrowing to fund the operating budget is generally forbidden. Fundamentally, the pie grows and shrinks with state GDP. Looking at state budget histories, we see that from 1965 Medicaid has grown from zero to about 25% of state GF spending, with the share of the pie going to Medicaid continuing to grow. We also see the share of the pie going to K-12 education steadily increasing. There are a number of reasons for this; one of them is that teacher salaries have generally grown as if they were increasing productivity at the same rate as the rest of the economy, even though they are not. They don't teach significantly bigger classes, nor teach twice as much material, nor teach the same material in significantly less time. I'm not arguing against the growth in teacher salaries, I'm simply pointing out that we have given them raises despite their being caught in a productivity trap. FWIW, I also don't buy the argument that -- to choose an extreme example -- an overview of the history of the War of 1812 has become intrinsically more valuable as productivity in other areas of the economy increased. So, relative to GDP, the pie is fixed in size and two (already large) pieces are growing. Other pieces must shrink. Higher ed is the "easiest" target, in several senses. So more and more of the costs at state schools -- by far the largest part of higher ed -- is borne by the students rather than the taxpayers. The state legislators that I worked for were *not* happy with the answer that they kept getting from the staff.
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It's a nice catch phrase, but is still misleading in its implications. It takes an economy of 30-50 million people to "make" an iPad. The fab lines for the integrated circuits and display cost billions; those fabs sit at the near the top of a considerable array of technologies such as mechanical engineering, chemistry, and software; and they must sell tens of millions of devices annually to be profitable. Which in turn implies that all of the "support" people -- teachers, construction workers, farmers, clerks -- have to be earning enough to buy things with ultra-large-scale integrated circuits embedded in them. I admit that it's a sore point for me. I get very frustrated with people who believe they can live through future energy constraints in a wonderful high-tech self-sufficient village.
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Back about 1994, I built experimental software (which died, unpublished, inside the giant corporation, but that's a different rant) that did a pretty good job of providing an interactive online classroom. One of the keys was IP multicast (which ISPs still won't generally provide) and selective listening to the streamed media. With a little practice, an instructor could supervise a nice free-flowing discussion. It was also easy to enable private side conversations, with two or three students arguing a point and marking up the instructor's slide, said marks being invisible to the class as a whole.
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"Moses Lake is a very long way from Wakersdorf. Transport will cost a fortune unless the Moses Lake plants are for the future eventual or potential US market." The press release says that the availability of clean, cheap, plentiful hydro power was an important factor. During one stretch earlier this year, the Bonneville Power Administration was giving electricity away to industrial customers who could increase their sustained consumption. In contrast, Germany is starting to shut down its nuclear fleet, with no firm plans for replacing the supply, and many are anticipating significantly higher prices and/or rationing in some form. Shipping costs may be relatively small compared to the savings on the cost of electricity used in production.
But what incentive is there for NJ to pay to put solar panels in the desert SW? Certainly they're not going to get any electricity from them, given that the panels would be in a different interconnection, there are limited DC transfers between interconnections, etc. It's not just New Jersey. 20% or so of the US population lives in the Boswash urban corridor, an area with quite limited potential for renewable electricity. Moving renewable electricity from Great Plains wind or SW solar will require constructing very large DC transmission facilities across the intervening states...
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"It can start in temperatures as low as -25 °C (-12 °F)." There are sizable portions of the US where, for a portion of the year, the temperature at the beginning of the morning rush hour can be lower than that. While weather patterns have moderated, when I was a boy in northern Iowa, most winters had a week where the high was below -12 F. What are the consequences on range and fuel cost when some part of the H2 has to be used to keep the FC warm while the car is parked?
No real surprise. As the article notes, efficiency improvements for individuals require investments: new car, new appliances, improvements in housing. It would be interesting to know how the survey questions were phrased. If they had the tone of "What can you do now to save energy?" you get one set of answers. If "What can you do over the course of several years to be more energy efficient?" you might get a different set. With some exceptions for bulk commodities, the railroads no longer provide scheduled freight service, which plays havoc with current just-in-time inventory practices. A large-scale shift to rail requires that either (1) the railroads go back to providing scheduled service, which will reduce their energy efficiency (the train runs even if there are only a dozen cars to haul) or (2) businesses absorb the cost of expanded inventories needed to offset the unscheduled nature of rail transport.
OTOH, it appears increasingly likely (IMO, at least) that a substantial portion of the developing world's reliable baseload electricity -- a critical factor if they are to have a modern economy -- will be nuclear. And the reactors will need specific attributes: modest size, very long refueling intervals, minimal on-site fuel handling, simple controls and inherent safety features. Carter made the initial decisions that put the US national labs on a path that precluded development of such reactors (they have put several designs on paper more recently, but all are decades away from production). So the developing countries will buy what they need from one or more of Japan, Korea, China, India and Russia, but not from the US. I would argue that Carter's policy choices, although intended to reduce the risks of proliferation, have (a) not stopped proliferation and (b) 30 years on, left the US in a position where its views on proliferation are of decreasing importance globally. When the Chinese build the reactors they intend to sell and service in Africa, will they care at all about US opinion about the design?
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"Regulation works best when it can't be distilled to the cost of doing business but instead dictates the viability of the business and the consequences of middle management up to "untouchable" CEO's." Indeed. At one point during the breakup of AT&T in the 1980s, the new local telephone companies were taking a somewhat cavalier attitude towards the rules restricting their business activities. At one point during a hearing over such a violation, the presiding judge announced that the next time one of the local companies was in his court over a rules violation, everyone in the management chain from the lowest involved employee up through the CEO would be going to jail for six months for contempt (which he could impose unilaterally). At the local telco where I worked, employee training started over three days later, and every training session started with a statement that "You personally can go to jail if the rules are violated." IIRC, pressuring a subordinate to cut corners on the internal procedures that kept us inside the rules became a firing offense. The internal procedures were followed religiously from that point forward. As economists like to say, incentives matter :^)
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Are any of the other lectures in this series available in a similar format?
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"NOT IN THIS CAR." I think that you underestimate teenagers :^)
"If the water is clean, why do they have to inject it underground?" The described process appears to more effectively remove various sorts of hydrocarbons. Produced water often contains dissolved salts of different sorts, including heavy metals, some quite toxic. Removing them from the water is much more difficult, and disposing of heavy metals is very expensive. Easier to just reinject them.