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Burning the Midnight Oil for Living Energy Independence

Remember the ontroversy over whether the Stimulus would be "going overboard"? Well, when we net Federal, State and Local Government ... there is no Stimulus. The Federal Spending from ARRA was too small to cover the drop in spending at the State and Local government in the last quarter of last year and first quarter of this year.

And yet those who are unhappy that we have not yet had a Depression since the 30's have been successful in getting the recipe for a Depression installed as the Conventional Wisdom.

This diary is about one strategy to side-stepp the neo-Hooverites with a "fully funded" program that will still provide the stimulus that our economy desperately needs to get the recovery into second gear where it can start cutting into the unemployment crisis.

Sidestepping the Depression Fans

The basic trick of the Depression Fans is quite simple: instead of worrying about the real world, get a broken model about how things work built into public discourse, and then use that broken model to achieve their ends.

The ends would appear to be seeking ever growing power for the major transnational Corporations, at the expense of small business, citizenry, local communities, organized labor, and indeed anyone who is not a major transnational Corporation.

The chase for power is a lot harder to cope with than the chase for wealth, since if we can find a way of expanding total wealth, then allocating some fraction of that to the already wealthy is one way to co-opt them. However, power is closer to a zero-sum game, where any increase in say by small business, the electorate, residents of a community, members of a cooperative, credit union, or labor union is a decrease in say by large transnational corporations.

One - not the only, but one - part of the process of building a coalition to reserve some power for everyone who is not a major transnational corporation is to find a way to do something successfully. Since a corporation is a private government run by the principle of one dollar, one vote, one of its sources of power is the failure of public government to make and implement effective plans.

Implanting the lie in the public discourse that a sovereign national government with its own sovereign currency faces a domestic finance constraint has therefore been a key part of this process for over half a century. A national government may face resource constraints. A national government may face external finance constraints. But it does not face a domestic finance constraint in an economy where people buy and sell things using IOU's either issued or authorized by that same national government.

However, fighting such a deeply embedded and ferociously defended lie will take time. Those presently unemployed cannot wait on jobs until we successfully fight back this malignant deficit errorism.

So, in the context of the embedded deficit errorism, what is it that we can do?


Rigging the Map is a Fine Trick, Until Someone Gets a Valid Map

Part of the process of embedding deficit errorism into people's heads this deeply is that the advocates of deficit errorism actually believe it. They believe in Hoover's "cut spending, pass some tax cuts for the wealthy and normalcy will be just around the corner" Economics.

So the Liberty Fund is established on an entirely balanced budget basis. The Liberty Development Bank is established with an account for each municipality, unincorporated county, and reservation in the country. A tax is placed on imported petroleum and all "non scheduled" imported petroleum products equal to 1 percent of import price plus 1 cent per gallon. The revenues are divided between accounts on a pure per person basis.

Account holders that have qualifying spending up to their account balance can simply spend it. In addition, if they have qualifying spending up to five times their balance over the most recent four quarters, the Liberty Development Bank is authorized to issue 10 year bonds to borrow that amount on their behalf.


How Much Money are we Talking About

So, how much money are we talking about? Well, US oil imports have been in the range between 3.3b and 3.7b barrels annually over the past decade. There are 42 gallons of crude oil per barrel, so that is between 130b and 160b gallons. So one cent per gallon is between 1.3b and 1.6b per year. Leveraged up to five times is up to $6.5b to $8b available within the first year.

Over the past five years, the price of oil has been between $40/barrel and $140/barrel, so that the one percent would be between 0.9 cents and 3.3 cents per gallon. That would bring the import tariff to from 1.9 to 4.3 cents per gallon. The lowest price and the lowest volume sales we have seen would result in $2.5b per year, or up to $12.5b in spending the first year. In an oil price shock, the amount available could go to $5.6b per year, which would leverage to as much as $27b.

Now, take the more conservative $12.5b available in front loaded spending over the first year. That is roughly $40 per person in the account of each city, unincorporated county, or reservation. The City of Charleston, West Virginia, with a population of 50,000, would have about $2m to spend; if the urban area, with a population of around 200,000 was working together on a project, it would have about $8m to spend, and if the whole metro area was working together, with an estimated population of about 300,000, it would have about $12m to spend.

Or take Cincinnati. With a city population a little more than metro Charleston, the city on its own would have a bit over $12m to spend on a qualifying project. If all of Hamilton County banded together, with a population of about 855,000, it would have about 34.2m to spend.

And of course, if we considered the most populous county in the country, LA County, with about 14m people, that would be up to about $560m to spend sometime in the next year.


What Is A Qualifying Project, Again?

Isn't this a train diary? Well, in a sense, but since the Liberty Fund is about giving local areas freedom to experiment with different approaches to oil-free transport, trains projects would have to compete for the support of cities, towns, villages, suburbs, counties and reservations along with any other oil-free means of transport.

Oil Independent: The power source for the project must be available from renewable domestic power sources. No "potentially", no "in theory", no "eventually". It must be a power source: that is, the net energy return on investment must be over 100% and it must not be dependent upon oil as part of its production process. If a project has to invest in new renewable generating capacity or new transmission capacity to meet this requirement, include that as part of the project.

Common Carrier: The project must be for transport that is accessible to the population. For example, a local subsidy to purchase electric cars is not permitted unless the electric cars are going to be used in a public taxi or share car system. A public shared bike or shared ebike system would qualify: a subsidy for local residents to buy their own ebikes would require some other funding source.

Neighborhood, Metropolitan, Regional, or Inter-regional transport is all allowed: This is biased toward local transport, just because a local project has fewer local governments that it has to convince to provide funding. But the Liberty Fund does not discriminate in favor of or against any given length of trip. Oil independent transport to the local supermarket or oil independent transport between two major metropolitan areas would both quality.

Fully Funded Planning: Spending on Planning and Environmental Impact Assessment to develop a capital project to meet funding requirements is allowed with no matching funds.

Fully Funded Major Maintenance: Existing Oil-Independent Transport can draw on the funds for major maintenance required to bring it back up to a state of good repair.

Financially Sustainable Capital Spending: If the spending is on a capital investment, the project must have a sound business model with committed sources of operating funds.

Operating Subsidies with Local Matching Funds: Local governments can draw on up to half their average available balance for operating subsidies on a dollar for dollar match to locally subsidies.

And Finally, Use It Or Lose It: If Funds have been on account for four quarters without being spent or a application lodged to allow the funds to be spent, the money goes back into the pool to be divided up with current tax revenues.


So, What Would This Buy Us

Well, this is the lovely thing about Democracy: it springs surprises on us that will upset the careful spreadsheet modeling of authoritarian private corporate governance.

So what it will buy us depends in large part on what people want. But what it can buy us is:

  • Fixing existing electric local rail and mass transit systems that have been allowed to decay under the onslaught of the past forty years
  • New transit services on existing electric local rail and mass transit systems that have been cut due to the recession
  • Streetcars
  • Trolley Buses
  • New electric local rail
  • Shared Bikes and eBikes
  • electric taxis and dial-a-ride vans
  • Paved cycleways
  • Pilot Steel Interstate Projects
  • And this was just off the top of my head ... the list goes on.


Action Agenda

How to get it? Well, we got to build a coalition of the unemployed, the underserved, small businesses losing potential income to oil addiction, and the big cities, small cities, towns, suburbs, and rural counties that can find a use for the money. Or, in other words, a coalition of almost everybody who does not work for an oil company, with some people wearing two or three hats in the coalition.

From the comments: For action on the full fledged Steel Interstate, confer in particular the Railroad ReModelers Club as discussed in more depth in a recent diary.

                   

                                                            Get the eKos widget code!


Midnight Oil ~ River Runs Red

Originally posted to BruceMcF on Sun Jun 06, 2010 at 05:13 PM PDT.

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Comment Preferences

  •  There's nothing crazy about this idea. (8+ / 0-)

    Tipped and rec'ced.

    If you think you're too small to be effective, you've never been in the dark with a mosquito.

    by marykk on Sun Jun 06, 2010 at 05:46:42 PM PDT

  •  One of the things that would be cool (4+ / 0-)
    Recommended by:
    RunawayRose, Magnifico, marykk, BruceMcF

    would be to make train more affordable than flying. I'm in Canada, but, for example, I just priced tickets between Vancouver and Ottawa, because I'm moving to Ottawa, and it is twice as expensive to travel by train as it is to travel by plane. I have time to travel by train, and had really hoped to, but I can't afford double the price.

               Just my two cents,
                   Heather

    Torture is ALWAYS wrong, no matter who is doing it to whom.

    by Chacounne on Sun Jun 06, 2010 at 06:24:54 PM PDT

    •  Price of train travel (2+ / 0-)
      Recommended by:
      RunawayRose, Chacounne

      Is that ticket price coach or sleeper? Generally coach is cheaper than air travel over such a distance, but sitting (and stinking) in the same chair for 3-4 days isn't fun. Sleepers are what drives up the fare, at least on Amtrak.

      •  I can't sit up for 4 days, (2+ / 0-)
        Recommended by:
        Magnifico, marykk

        because I have arthritis and osteoporosis. The "supersaver" is $600, the lower berth is $1600 !

                        Just clarifying,
                             Heather

        Torture is ALWAYS wrong, no matter who is doing it to whom.

        by Chacounne on Sun Jun 06, 2010 at 06:57:33 PM PDT

        [ Parent ]

        •  With crude oil at around $50/barrel to ... (1+ / 0-)
          Recommended by:
          Chacounne

          ... $80/barrel, flying long distances will be cheaper than sleepers.

          When crude oil rises to $200/barrel to $300/barrel, it might not still be cheaper.

          How expensive the train ride will be, though, will depend for shorter trips on whether we get started on rebuilding our passenger rail corridors, and for longer trips on whether we establish transcontinental rapid electric freight corridors.

          Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

          by BruceMcF on Sun Jun 06, 2010 at 07:10:25 PM PDT

          [ Parent ]

        •  Yow. That's more expensive than Amtrak. (2+ / 0-)
          Recommended by:
          BruceMcF, Chacounne

          I got from upstate NY to LA and back by sleeper (2 people in the sleeper compartment) for about $1600.  My fiancee has arthritis, so she had the lower berth (and was much happier than on a plane).

          The distance you want to go is shorter, and one-way, so it should be more like $800 for two people if bought sufficiently far in advance.  But apparently it isn't?

          Have you priced Vancouver-Seattle-Chicago-Buffalo-Toronto-Ottawa (five trains, customs twice, three nights on trains, overnight in Toronto, no checked luggage on the first, fourth, and fifth trains)?  This would be Amtrak from Vancouver to Toronto, Via from Toronto to Ottawa.

          It sounds ridiculous, but with that astoundingly high price for the Canadian, it might actually be cheaper.  I'm curious.

          -5.63, -8.10. Learn about Duverger's Law.

          by neroden on Sun Jun 06, 2010 at 08:36:36 PM PDT

          [ Parent ]

      •  The class of overnight travel that is ... (4+ / 0-)
        Recommended by:
        neroden, Magnifico, A Siegel, marykk

        ... "first class bus" travel in the Southern Cone, 3 seats across rather than four, one third fewer rows, full extension seat rests and deep recline backs, would be far more comfortable than a regular coach seat.

        As I noted in another diary recently, the daytime coaches could drop off at the big city around 11pm to be picked up in the morning by a train going the other way, and only the sleepers and overnight coach seats keep heading on into the night.

        As far as stinking, showers are great for that. Again, a roomette is better (the roomette is in general a marvel of space efficiency), but a couple of shower stalls per overnight class coach will do wonders for the sensory environment.

        Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

        by BruceMcF on Sun Jun 06, 2010 at 06:59:44 PM PDT

        [ Parent ]

    •  Trains cheaper than flying ... (4+ / 0-)
      Recommended by:
      RunawayRose, neroden, Magnifico, Chacounne

      ... is normally focused on higher speed rail corridors of 500 miles or less. So Toronto to Ottawa or Quebec, that is likely. Transcontinental, less so.

      Part of the difference is that short hop flights consume more fuel per passenger mile than long flights do, so the difference in operating costs per mile most strongly favor trains for the shorter trips.

      Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

      by BruceMcF on Sun Jun 06, 2010 at 06:43:27 PM PDT

      [ Parent ]

  •  40+ years and counting (2+ / 0-)
    Recommended by:
    RunawayRose, A Siegel

    This is a great idea, but I fear it is doomed to failure until Americans change their attitude about public transit. I think the cost isn't at issue, but rather it is an American distaste for public transit.

    We've had 40+ years of failed energy policy in the U.S. Almost every year, Americans increase their consumption of oil and, in turn, the U.S. imports more foreign oil.

    In 2001, Grist had an article by Jim Motavalli about how Bush's energy team was "so tilted toward Big Oil that it will never give a thought to the only possible lasting solutions to our deepening problems: mass transit and energy conservation."

    He pointed out: "if every American drove a 70-mile-per-gallon hybrid Honda Insight instead of a gas-guzzling sport utility vehicle, we could stop importing oil tomorrow, but that kind of thinking is not on the agenda."

    We have had decades of this kind of thinking and false starts in the U.S. Our leaders express concern about oil, but do nothing about it.

    And I've concluded this is what Americans want, for example, Motavalli related:

    During a Los Angeles stop in the early days of the 2000 presidential campaign, Bush listened to the complaints of a man who rode two slow buses to work every day and was seeking transit improvements. "My hope is that you will be able to find good enough work, so you'll be able to afford a car," offered a helpful Bush.

    The majority of American have never wanted public transit and when we had it, voted with their feet and gas pedals, to destroy it. Until we can convince the majority of Americans they want:

    • Fixing existing electric local rail and mass transit systems that have been allowed to decay under the onslaught of the past forty years
    • New transit services on existing electric local rail and mass transit systems that have been cut due to the recession
    • Streetcars
    • Trolley Buses
    • New electric local rail
    • Shared Bikes and eBikes
    • electric taxis and dial-a-ride vans
    • Paved cycleways
    • Pilot Steel Interstate Projects
    • And this was just off the top of my head ... the list goes on.

    Then, we'll keep oil driving the direction of this country. Not enough Americans want to have an alternative to the gas pedal. Good ideas like the Liberty Fund are doomed until Americans want to change. Despite the disaster in the Gulf of Mexico and our oil wars, I do not see that happening.

    •  There is the feedback loop. (5+ / 0-)

      The subsidies for driving create the behavior, the behavior creates the attitudes, the attitudes create the subsidies.

      Except of course when given a chance, there does not seem to be any tremendous bias in the US against common carrier transport. When explaining mode splits between different moves of transport, we probably ought to be taking fewer available rail trips than we do if explained by frequency, reliability, travel time and cost of travel alone - there is an independent preference for having somebody else do the work of driving.

      What we would need to bring oil-free transport within 5 miles of metropolitan residents and within 10 miles of over three quarters of the population has been sketched out ... a 5% levy on earned and unearned income on all those making over 10x median income would be just about right.

      But that is not going to happen, not right away.

      But a self-funding system that avoids having to change the current highway funding splits, and that incidentally provides over 1% extra profit to domestic oil producers ... it would allow counties, towns and cities to discover the forms of oil-free transport that will attract the most political support, by letting a wide variety of systems get a trial run, and discovering the popularity of each in practice from experience.

      Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

      by BruceMcF on Sun Jun 06, 2010 at 06:52:12 PM PDT

      [ Parent ]

      •  How do we get there though? (2+ / 0-)
        Recommended by:
        marykk, Stranded Wind

        The problem is we had oil-free transport in the U.S. once. Cities and towns had public transit in the form of streetcars, trolley buses, local rail, etc. We dismantled a superior system in exchange for private automobiles because collectively Americans preferred this over public transit.

        I just am not seeing how we convince Americans to bring back a system they intentionally got rid of. I predict that even if the 1%-based funding gets through Congress, Americans will demand it go to fixing the decaying highway, roads, and bridges infrastructure for private transportation instead of designating it for public transit.

        What has changed in America to make Americans prefer the bus or train over their car? Demonstration projects may work, but I have a hard time believing Americans will let even these happen.

        •  We push for a program that looks like ... (4+ / 0-)
          Recommended by:
          neroden, Magnifico, marykk, Stranded Wind

          ... a combination of token gesture to placate the outrage of the moment while supporting the profits of domestic petroleum production ...

          ... but which actually plants the seeds of an oil-free transport system.

          This is only a token ... except seeds are normally smaller than the plants that they grow into. And the more seed that have been planted, the more people will demand "what they have over there" over the coming series of oil price shocks.

          Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

          by BruceMcF on Sun Jun 06, 2010 at 07:06:18 PM PDT

          [ Parent ]

        •  housing values (3+ / 0-)
          Recommended by:
          neroden, Magnifico, BruceMcF

          What will happen is the slow dawning, as the banking system comes apart, that housing values will never return to the levels they once were, and that all those far flung suburbs are useless crap.

          There will be an immense amount of angst, the sort of which might drive a violent revolution if we don't do something about our stalled reform movement.

          "Not dead ... yet. Still have ... things to do." -Liet Kynes

          by Stranded Wind on Sun Jun 06, 2010 at 08:37:58 PM PDT

          [ Parent ]

          •  This is part of the need to have seeds planted .. (2+ / 0-)
            Recommended by:
            Magnifico, Stranded Wind

            Just because we are accustomed to urban slums does not make them an essentially urban phenomenon.

            Rather, when existing values dip below construction costs, that is a recipe for a slum. Under 1950's conditions, this happened in urban and very inner suburban residential areas. But in 2020 conditions, this will happen in car-addicted residential suburbs.

            If we can find some way to have some alternatives in place, those suburbs that have them will find that they are not on a slum track when very similar suburbs are. And when that happens, the areas that do not have the alternatives that are effective at protecting property values will be clamoring to get theirs.

            Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

            by BruceMcF on Sun Jun 06, 2010 at 08:42:57 PM PDT

            [ Parent ]

        •  Remember, when the system was dismantled (2+ / 0-)
          Recommended by:
          Magnifico, BruceMcF

          1 -- gasoline was something like ten cents a gallon
          2 -- pollution was simply not considered at all
          3 -- the population was so much lower that traffic jams were not a serious problem in most of the country
          4 -- public transit was actually being used as a cash cow, being taxed and having its profits extracted.
          5 -- there was an honest-to-god convicted conspiracy to rip up the streetcars.

          I think the situation has changed in a lot of ways since then.

          -5.63, -8.10. Learn about Duverger's Law.

          by neroden on Sun Jun 06, 2010 at 08:40:07 PM PDT

          [ Parent ]

    •  And I will stress ... (3+ / 0-)
      Recommended by:
      Magnifico, marykk, Stranded Wind

      ... the voting by Americans to drive is in part on the basis of giving motorists a bigger subsidy than other forms of transport.

      The most heavily subsidized form of transport getting the most patronage is not something that has to be put down to "attitude".

      Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

      by BruceMcF on Sun Jun 06, 2010 at 07:02:22 PM PDT

      [ Parent ]

      •  Sunk costs (6+ / 0-)

        And how many Americans have already sunk costs into the automobile culture? Not only is there the car ownership, but homeowners lands devoted to 1-2-3 car garages and driveways. The car culture subsidies are there because Americans want this form of transportation subsidized.

        Maybe the seeds planted by demonstration projects will change our society, but really its a mighty undertaking — transforming from private (capitalism) to public (socialism).

        I think Andy Singer nails what we're up against:

        •  But, but, but ... (3+ / 0-)
          Recommended by:
          neroden, Magnifico, Stranded Wind

          ... grandma loves getting out of the nursing home to get to her Tuesday afternoon bridge club at church.

          What do you have against Grandmothers???

          Go behind the propaganda to the funding of the propaganda. There are members of the American Petroleum Institute that would get an immediate boost to their bottom line if this tax goes into place.

          It might be perceived as against all oil company interests long term ... but short term? I cannot think of any other support for oil-free transport that would be as likely as this to get Mary Landrieu to vote yes.

          Start 2010 with Lesbian Creative Works, 100% Yuri from ALC Publishing

          by BruceMcF on Sun Jun 06, 2010 at 08:12:46 PM PDT

          [ Parent ]

        •  Doesn't everyone want more yard & garage space? (2+ / 0-)
          Recommended by:
          Magnifico, BruceMcF

          I've been reading about people planting their driveways to get yard and garden space.

          And it's blatant that people's garages will promptly fill up with other Stuff if the cars are removed from them....

          -5.63, -8.10. Learn about Duverger's Law.

          by neroden on Sun Jun 06, 2010 at 08:42:02 PM PDT

          [ Parent ]

  •  Cool idea (5+ / 0-)

    Too bad so many yahoos are cold to the idea that gradually raising taxes on polluting fuel consumption and investing those proceeds in sensible ideas is so verboten.

    Who knows, maybe a big nasty oil barf in GOMEX might be a wakeup and smell the diesel moment.

    Nb41

  •  Railroad ReModelers Club (2+ / 0-)
    Recommended by:
    neroden, BruceMcF

    I think this is an opening for me to plug the Railroad ReModelers Club.

     This is a brand new grassroots effort to correct these problems Bruce outlines, and it's got quite a lot of energy behind it. Please pop in and take a look around.

       I introduced the idea myself in a diary yesterday.

    "Not dead ... yet. Still have ... things to do." -Liet Kynes

    by Stranded Wind on Sun Jun 06, 2010 at 08:31:32 PM PDT

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