This is the Welcome Center for Cannery Row near Monterey, CA. I especially appreciated the use of these old cars rather than building a structure as I feel this is more in keeping with the sense of Monterey which has historically been a downtrodden area, though in these days tourism has created a bit of a property boom.
This ride is for those of you who like to go the distance. Tres options available: 25, 50 or 65 miles. Choose the distance that challenges you for a personal best. The course is mostly out and back, with rolling hills and a guaranteed head wind, one direction or the other. We’ll celebrate your strong finish with lunch burritos and beverages. [More]
Speed, intense summer heat and long, steep hills combine to make this the most punishing of the Tres Burritos rides. Ride 43 miles on the hills of west Austin (360, Bee Caves, Cuernavaca, Barton Creek Blvd, Lost Creek, and Yaupon). The fastest climber of Lost Creek’s 1.1 mile Strava segment will win the coveted title of Bicycle Sport Shop, King of the Mountains. We’ll celebrate your finish with breakfast burritos and beverages. [More]
This downtown pedal is the perfect way to spend a summer morning with family. Bring a chariot for the little ones or pedal side-by-side to the Capitol. We’ll celebrate at the finish line with breakfast burritos and beverages. [More]
After 25 years of covering the federal budget, I’m still amazed at the persistence of fiscal misconceptions. The distinction between fact and political opinion has been blurred to the point of invisibility. The choices—what spending to cut, whose taxes to raise—are fundamentally political; the facts are not. But the budget is now so sprawling—the U.S. government spent $400 million an hour last year—that grasping it in its entirety is impossible. The budget, I’ve concluded, is best understood in digestible morsels.
Nearly two-thirds of annual federal spending goes out the door without any vote by Congress.
About 63% of the budget is on autopilot. Congress passes legislation every year to keep the government operating, the phones answered and the National Parks open, but much of the money the government spends doesn’t require any affirmative vote. Social Security benefits get deposited. Health-care bills for Medicare for the elderly and Medicaid for the poor are paid. Food stamps are issued. Farm-subsidy checks are written. Interest payments are dutifully made to holders of Treasury bonds.
Getty Images
About $1 of every $4 the federal government spends goes to health care today. That is rising inexorably.
In 1981, spending on Medicare for the elderly and disabled and Medicaid for the poor accounted for 9.5% of federal outlays besides interest. By 2011, the two programs were consuming nearly 25%. In 2021, if current policies remain in place, government spending on health care will consume 33%, according to the Congressional Budget Office, even if the Affordable Care Act survives Republican attacks. The Medicare prescription-drug benefit alone will cost the government more over time than the wars in Afghanistan and Iraq. The war spending will end someday; the drug benefit is permanent.
Firing every federal government employee wouldn’t save enough to cut the deficit in half.
The federal government spent $435 billion last year in wages and
benefits for its 4.4 million employees, about 35% of whom are uniformed military personnel and another 29% of whom are civilians working in the departments of Defense, Veterans Affairs and Homeland Security. Eliminating the federal workforce entirely would have saved a lot of money, of course, but it would have pared last year’s deficit by only one-third. So where does all the money go? A lot of what government does is siphoning money from some and giving it to others, or occasionally to the same people. About $2.3 trillion, two-thirds of all federal spending last year, went to benefits of some sort for individuals: Social Security, Medicare, Medicaid, food stamps. Another $220 billion went for grants to state and local governments for everything from schools in poor neighborhoods to sewage-treatment plants.
The share of income most American families pay in federal taxes has been falling for more than 30 years.
There are a dozen ways to measure the slice of income that the government takes in taxes, and most point in the same direction. One meaningful metric: The CBO estimates that for families in the very middle of the middle class, the federal government took an average of 19.2% of their income before deductions in 1981 in income, payroll and all other federal taxes. State and local taxes have risen for many, but the federal tax bite has eased. In 2007, just before the recession hit, the CBO estimates that the tax take for Americans was 14.3%—and it has fallen since to 12.4% in 2011, according to the nonpartisan Tax Policy Center. Nearly half of American households—46%—didn’t pay any federal income taxes at all in 2011. The vast majority of them didn’t make enough money to owe taxes, or they took advantage of tax breaks that Congress has created. About half of those who didn’t owe federal income taxes were hit by payroll taxes levied on wages to finance Social Security and Medicare.
The federal government borrowed 36 cents of every dollar it spent last year, but had no trouble raising the money.
Even though the red ink is flowing now at a rate of $1.2 trillion a year, the U.S. Treasury is borrowing at interest rates lower than at any time in at least half a century. But the government still paid $230 billion in interest last year. That’s more than triple the $64 billion it spent on all research and development outside of defense, from the National Institutes of Health to the National Aeronautics and Space Administration. When interest rates return to normal, as they surely will someday, each additional $1 trillion in debt will add about $50 billion a year to U.S. annual interest payments, money that won’t be available for spending on other things.
This truly is unsustainable. The U.S. today is in the post denial phase of coping with deficits, the ones that will persist even after the economy regains its health. No one of consequence in Washington argues that deficits don’t matter. Deciding what to do about them is contentious because it’s about apportioning the pain. Getting the facts straight is a necessary first step.
—Adapted from “Red Ink: Inside the High-Stakes Politics of the Federal Budget,” which will be published July 31. © David Wessel. Crown Business/Random House, 2012.Write to David Wessel at capital@wsj.com
—By Adam Serwer
Karl R. Martin/ShutterStockEarly Friday morning, as Americans were waking up to the horrifying news of a mass shooting at a midnight showing of the latest Batman film in Aurora Colorado, someone was writing a press release. A political pundit was outlining the early draft of an op-ed explaining how there is no more vivid example of what ails America than those lost in Aurora. Politicians and their speechwriters began crafting careful statements, seeking to find the exact right measure of solemn regret and hardened resolve.
Is this disturbing? It’s said that one should never try to “politicize” tragedies like this one. President Barack Obama said Friday morning that “there are going to be other days for politics, this I think is a day for prayer and reflection.” Mitt Romney, his Republican rival, said “I stand before you today not as a man running for office, but as a father and grandfather, a husband, and American.” Both the campaigns and some of their respective third-party allies have asked networks to pull negative advertisements from television in the state. No one wants to make a scene at a funeral.
There’s something quite political about that, though. After all, the reason the campaigns are behaving this way is not just because of decorum, but because a breach of decorum would exact a political cost. Politics are an inevitable part of a collective national trauma, which, for better or for worse, is how America treats incidents like this one. It’s not only appropriate to ask how we got here—it would be irresponsible not to. We frequently treat politics as a team sport, but it isn’t one. Trying to avoid politics trivializes politics, which is the means by which we make collective decisions as a society. A discussion about policies that could prevent future tragedies like this couldn’t be more appropriate.
Politics itself is not the problem, but there are reasons we react with revulsion to the thought of “politicizing” tragedies. What repels us is the rush to collective blame, the lightning impulse to assign responsibility to one’s political adversaries. There is nothing like an actual monstrous act to demonstrate the silliness of our tendency to reduce one another to caricature. Shortly after the shooting, the website of the late Andrew Breitbart published speculation, quickly hyped by conservative internet maven Matt Drudge, that the suspect in the shooting was a registered Democrat. With no apparent sense of irony, the website later published an “exclusive” press release from a Tea Party group criticizing ABC News’ Brian Ross, who made the outrageous decision to speculate publicly that the suspect might have been involved with a local Tea Party organization. I don’t know Ross’ political views, so I can only describe his actions as inexcusably reckless. (ABC later apologized.)
To look at the frightened eyes of the survivors in Aurora, and see only our own intrinsic goodness, and our political enemies’ implacable evil, is the most impenetrable vanity. It’s not politics, it’s just tribalism. And it’s grotesque. But we shouldn’t mistake this kind of pettiness for politics itself, which is far too important an arena to cede to those who are incapable of seeing a tragedy and wondering, above all, what it says about themselves. We should be talking about why this happened, and what, if anything, can be done to prevent it from happening again.
National tragedies are political. They’re too important not to be.
This is a new take on the food trailer industry in Austin Texas. I think the use of a re-conditioned school bus is an interesting marketing ploy.
Carpe Diem, Reuters, FTalphaville, and WhaleOil are among those calling attention to a new paper by Leonardo Maugeri, senior manager for the Italian oil company Eni, and Senior Fellow at Harvard University, which concluded:
Contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption. This could lead to a glut of overproduction and a steep dip in oil prices.
Based on original, bottom-up, field-by-field analysis of most oil exploration and development projects in the world, this paper suggests that an unrestricted, additional production (the level of production targeted by each single project, according to its schedule, unadjusted for risk) of more than 49 million barrels per day of oil (crude oil and natural gas liquids, or NGLs) is targeted for 2020, the equivalent of more than half the current world production capacity of 93 mbd. [After factoring in risk factors and depletion rates of currently producing oilfields], the net additional production capacity by 2020 could be 17.6 mbd, yielding a world oil production capacity of 110.6 mbd by that date.
Here I take a look at some of the details of Maugeri’s analysis.
About half of Maugeri’s calculated 17.6 mb/d in net additional production capacity comes from two countries– the United States and Iraq (see his Table 2). I have earlier discussed the situation for the United States. To briefly recap, more than half of the increase in total U.S. oil production since 2005 has come from biofuels and natural gas liquids, neither of which should be added to conventional crude production for purposes of calculating the available supply. Another important contribution to recent U.S. production gains has come from shale/tight oil. I agree with Maugeri that this will be an important factor in the future, but it is not cheap, and there are some big uncertainties in extrapolating recent gains, about which I will have more to say below.
But first let’s take a look at Iraq, which by itself accounts for 5.1 mb/d, or 29% of the net combined global gains that Maugeri is anticipating. His starting point for these calculations (see his Table 1) is the “production target” associated with a dozen oil fields for which the Iraqi government has signed contracts with oil companies. These targets call for these fields to reach maximum levels of production which, when added together, come to 11.6 mb/d. To win a contract, oil companies had to specify two key parameters: a “target” level of production and a remuneration per barrel, with awards going to the companies that specified the highest target and lowest remuneration. Some have characterized the announced targets simply as propaganda. Once awarded, there seems to be a separate process in which the production targets get renegotiated. Maugeri acknowledges the logistic and security challenges in meeting the targets, and accordingly cuts the official estimates in half. Doing so would still be a stunning achievement, requiring an Iraq that would be substantially more stable and successful over the next decade than it has been over the last three.
A separate issue is that new production from places like the U.S. and Iraq are needed in part to replace declining production flows coming from mature fields. A key question in any study like this is the assumed magnitude of that decline. As Stephen Sorrell notes, Maugeri does not state his assumed rate, and confuses the issue by mixing discussions of the depletion of an existing reservoir (for which purposes Maugeri is correct to raise the offsetting factor of additions to reserves) with the declining production flow rate from a given field (the relevant number for purposes of calculating the net addition that new fields bring to annual production). Sorrell suggests we can infer the implicit assumed decline rate from Maugeri’s Table 2, which reports a difference between his adjusted gross additions and adjusted net additions of 11 mb/d. That seems to imply that Maugeri is assuming that the total decline in production from existing fields between now and 2020 will be 11 mb/d, which I calculate to correspond to a 1.4% annual decline rate (ln(82/93)/9 = -0.014). As Sorrell notes, this compares for example with the IEA’s (2008) substantially less optimistic numbers:
Based on data for 580 of the world’s largest fields that have passed their production peak, the observed decline rate– averaged across all fields and weighted by their production over their whole lives– is 5.1%. Decline rates are lowest for the biggest fields: they average 3.4% for super-giant fields, 6.5% for giant fields and 10.4% for large fields. The average rate of observed post-plateau decline, based on our data sub-set of 479 fields, is 5.8%.
Standard oilfield-production profiles by category of field. The thick lines are derived from observed data; the thin lines show the trajectory assuming full depletion of the field. Source: IEA.
To get another feel for this issue, the figure below plots annual production rates for the four most important U.S. oil-producing states. Note that this graph includes all of Gulf of Mexico’s production in the panel for Louisiana. Despite the tremendous technological gains and new fields developed offshore, the Louisiana + GoM production level in 2011 was 53% lower (as measured by difference in natural logs in order to allow calculation of average annual compound decline rate in the next step) compared to its peak in 1971, for an average annual decline rate of 1.3% per year. In other words, we would have had to find new fields to produce an additional 1 mb/d (over and above the new fields and new production that in fact were added in Louisiana + GoM since 1971) just to keep LA + GoM production from falling from its 1971 levels.
Annual crude oil production (in thousands of barrels per year) from 4 leading producing states, 1860-2011. California includes offshore and Louisiana includes all Gulf of Mexico U.S. production. Updates Figure 6 from Hamilton (2012).
One encounters the same basic facts in every U.S. state except North Dakota (see my recent survey article).
A particularly important question is the decline rate to assume for the new shale/tight oil production. Maugeri (page 50) states that he used the following assumption for this:
A combined average depletion rate for each producing well of 15 percent over the first five years, followed by a 7 percent depletion rate
Heading Out finds this assumption at odds with the conclusion of the North Dakota Department of Mineral Resources.
Source: North Dakota Department of Mineral Resources.
I agree with Maugeri that new production from places like the United States and Iraq is going to be very helpful. But I think he substantially overstates the case for optimism. If we are counting on sources such as shale/tight oil, oil sands, and deepwater to replace production lost from mature conventional oil fields, the days of cheap oil are never going to return.
By. James Hamilton
Source: Econbrowser
Jul 21st 2012 | ROME | from the print edition
That face rings a bell
FEW things could be worse for Italy’s credibility (and creditworthiness) than for investors to spend the next nine months wondering if Silvio Berlusconi will return as prime minister. But that is increasingly likely.
Since late June, he has been teasing the public and media with increasingly blatant hints that he intends to be his party’s candidate at the next general election, to be held by the spring of 2013. He has still not said so publicly. But in an interview on July 14th he appeared to treat it as fact, saying he “would have preferred to have made the announcement later”.
The day before, his doctor said the 75 year-old billionaire was fit for the fray, though adding that Mr Berlusconi had gone on a diet to shed eight kilos. It then emerged the former prime minister was to hold a behind-closed-doors meeting with an international group of liberal economists. His plan, said aides, was to relaunch his party, the Freedom People (PdL), on the basis of the free-market principles he espoused when he first entered office in 1994, but which he signally failed to apply in the nine subsequent years when he governed Italy.
In another sign that Mr Berlusconi is aiming for a new start, the PdL’s general secretary, Angelino Alfano, said he thought Nicole Minetti, an embarrassing reminder of the former prime minister’s recent past, should resign as a regional councillor in Lombardy. Ms Minetti, a former showgirl, is on trial for allegedly supplying prostitutes for so-called bunga-bunga parties at Mr Berlusconi’s mansion near Milan. Her co-defendants have already conveniently disappeared from public life. One, a television newscaster, was sacked from Mr Berlusconi’s network. The other, a show-business agent, is in jail charged with bankruptcy offences.
If nothing else, recent events have shown that the media tycoon still has a sublime ability to draw attention to himself. By the time Ms Minetti, who had fled to Paris, reappeared in a blaze of photographers’ flashes, a nation that had spent months fretting over sovereign bond yields was once again discussing Mr Berlusconi, his intentions and his shapely lady friends.
But does this mean that, as in the late 1990s and mid-2000s, he can return from political near-death? In the eight months since he left office, naming Mr Alfano as the PdL’s prime-ministerial candidate, his party’s popularity has plunged. Its latest poll ratings were little better than those of the maverick Five Star Movement led by Beppe Grillo, a blogger and comedian.
There are three possible reasons. One is that the PdL is paying the price for its parliamentary support for Mario Monti’s technocratic government and the government’s EU-mandated austerity measures, which have hit many people very hard. But the centre-left Democratic Party has also backed Mr Monti and not suffered to anything like the same extent.
A second theory is that the PdL is lost without its founder. But it can be equally well argued that it is languishing because Mr Berlusconi has never really taken a back seat and allowed Mr Alfano to enhance his standing with the electorate.
A third possible reason for the PdL’s plight, which Mr Berlusconi is doubtless loath to consider, is that a growing number of Italians realise that the eight years between 2001 and 2011 when he was in power were a disaster for their country’s economy. He introduced few structural reforms and, largely as a result, Italy’s economic growth was negligible.
In a poll released on July 9th by Termometro Politico, a website, 72% of those questioned said they would never vote for Mr Berlusconi again. The poll also suggested that the allegations regarding his private life had ravaged a core element of his traditional constituency. It found that 53% of the women who voted for him in the latest general election, in 2008, said they would not do so again.
Mr Berlusconi, then, is setting off on the comeback trail from a lower and more unpromising point than ever before. But his resources are virtually boundless, his communication is outstanding—and he has a strong card to play if he chooses. Italians are inevitably writhing under Mr Monti’s tax increases and spending cuts. A promise to reverse the present government’s policies could also reverse the PdL’s fortunes in the polls. However alarming the spectre of his return, Mr Berlusconi’s chances should not be written off just yet.
Jul 18th 2012, 15:59 by The Economist online
SYRIA’S regime is looking increasingly wobbly. State television says a bomb attack on a security building in the capital, Damascus, this morning killed the defence minister, Dawood Rajiha, senior military aide Hassan Turkomani, and Asef Shawkat, perhaps the regime’s main security man and brother-in-law to President Bashar Assad.
A rebel offensive on the city has led to fierce clashes over the past three days, and this latest attack has dealt a blow to the regime’s morale. Lightly-armed opposition fighters have shown surprising resilience against the government’s better-equipped army in the Damascene districts of Midan and Qaboon, bringing the fight right to the seat of power. Today’s blast appears to have hit the coterie of security men that has been directing the crackdown in Syria that has left at least 16,000 dead since March last year. Other security officials, including the national security chief and the interior minister, are reported to have been injured.
Both the Free Syrian Army and an Islamist opposition group have claimed responsibility for the bombing. Some in the capital say the attacker may have been an insider, turning on other members of the regime. Many residents are worried about the likely response from the government, which has put on a show of bravado. It quickly brought in tanks and helicopters to respond to the recent fighting in the capital, sending civilians fleeing. Residents say elite troops have been moved into the city centre to guard the television station and government buildings.
This bus houses traveling parties around Austin. Looks like fun.
—By Kevin Drum
This is from the latest YouGov poll, and it shows Mitt Romney’s big problem in a nutshell: people just don’t like him much. He’s doing OK among Republicans, and he’ll probably do better as the election draws closer, but among independents he’s 24 percentage points behind Obama in likeability. You may or may not believe that Americans should vote for the guy they’d rather watch the Super Bowl with, but they do. And right now, they really, really don’t want to invite Romney into their living rooms.
Passing Through . . . . 