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Infographic showing how big the national debt really is

October 5, 2016 4 comments

I’ve largely stayed out of the federal election this year. A big reason for that is I don’t think any of the candidates seriously care about the US National Debt or will do anything to increase government transparency. But I do think it is worth looking at this infographic from The Money Project showin just how large the US National Debt is (click the image to see it on The Money Project website):

Visualizing the Size of the U.S. National Debt. Click the image to see the infographic on The Money Project website.

Visualizing the Size of the U.S. National Debt. Click the image to see the infographic on The Money Project website.

Looking at this inforgraphic I find it amazing that people are not worried that all of the world’s physical currency, gold, and silver could not even pay off the US National Debt.  Even if the full value of the S&P 500 companies were taken to pay off the national debt, it would not be enough. That is why it almost laughable when I hear people say that increasing corporate taxes is a solution to reducing the deficit and paying off the debt. There is simply too much debt.

The Money Project also has created this interesting video showing how much money humans have created. It is a good video showing how much money actually exists.

Categories: Free Market

South Dakota gets its own entry in the 2015 Wastebook

December 17, 2015 1 comment

tikigiki-misc-railroad-tracks-001-300pxEarlier today I posted about the 2015 Wastebook published by Senator Jeff Flake’s staff. I listed a few sci-fi type of wastes in that post (mostly because of the Star Wars premier). In this post I want to highlight one of the items in the list that is specific to wasted money in South Dakota.

# 95 Abandoned Train Stations

Number 95 on the Wastebook list looks at wasted Department of Transportation (DOT) tax dollars used in South Dakota and Virginia. Here is the part specific to South Dakota:

 The Department of Transportation is on the wrong track, spending nearly $1 million to renovate unused train stations while thousands of the nation’s bridges are in desperate need of repair.

One out of every four of the 5,875 bridges in South Dakota is structurally deficient or functionally obsolete. Yet, the state spent $500,000 of federal transportation funds to refurbish a train depot decommissioned in 1958 to be a museum of sorts.

The Chicago and North Western railroad built the Fort Pierre depot in 1906, but for the past 50 years it has been serving as a farm building on a ranch 176 miles away. The structure had to be transported back on a moving truck.

Those involved with the project “have resisted saying” the depot is going to be a museum because the federal Transportation Enhancement grant paying for the project “wouldn’t pay for building or refurbishing a museum. But it would pay for refurbishing a transportation artifact.” While they may be trying to cover their tracks, this project clearly violates the program’s intent

The money is paying to refurbish “an artifact that will hold other artifacts – virtually all, in one way or another, having to do with the railroad that brought everything to the middle of South Dakota once the depot opened in 1906,” explains Gary Grittner of Fort Pierre’s Bring It Home Committee.

I think the above entry from the Wastebook pretty much speaks for itself. The Capital Journal story used to complete part of the entry can be viewed here.  With projects like this happening, it makes me wonder if the massive tax and fee increased passed by the legislature this year through SB 1 (SoDakLiberty Posts) was actually necessary.

While I commend Grittner and Fort Pierre’s Bring It Home Committee for bringing back a piece of history, I cannot condone such a blatant misuse of taxpayer dollars. The depot has been restored for about a million dollars, half of which was used by a DOT grant that was meant for actual infrastructure use. It is apparent from the quotes in the story that those involved knew the money was being misspent, so they couldn’t even call the museum a museum.

In my mind the situation is made worse by the recent passage of the federal transportation bill. The current transportation bill continues the trend of using deficit spending. Basically that means the taxpayers have to borrow money and pay interest so pork projects like this can misuse taxpayer dollars. This is not a fiscally conservative way to handle the taxpayers dollars.

A few entries out of the 2015 Wastebook

December 17, 2015 3 comments
Cover of the 2015 Wastebook.

Cover of the 2015 Wastebook.

The 2015 version of the Wastebook is here. Previously I briefly looked at the 2013 and 2014 volumes of the Wastebook. Both of those volumes were compiled by Senator Tom Coburn’s staff, who is now retired. This year the staff for Senator Jeff Flake has compiled a list of one hundred and one wasteful projects paid for using taxpayer dollars. Some of these projects used large amounts of money, some used small. But all of them appear to be a massive waste of taxpayer dollars, and more importantly add to the ever-increasing federal debt.

Since this week is the premier of the new Star Wars movie (have you seen the cool libertarian Star Wars video) I thought I would pick a few cases out with a sci-fi theme. I always love some good sci-fi, but wasting taxpayer dollars never makes for a happy ending

# 8 Sheep in microgravity

From the Wastebook:

NASA isn’t planning to launch sheep into space, but the agency has rounded up a herd of sheep as part of a study to “mimic the impact of space travel on bones to better understand bone health and healing.”The three year project, which is costing taxpayers $1.2 million, is being conducted at Colorado State University (the school’s mascot coincidentally is a sheep).

The sheep aren’t floating around inside an anti-gravity chamber or on the International Space Station. Instead, the back leg of each sheep was put in a brace that kept it from bearing weight, simulating the effects of microgravity.

During Phase 1 of the study, 23 sheep were put in the microgravity brace for eight weeks and monitored by orthopedic surgeons to “provide pain relief when necessary.”

“Because the bone was isolated from any gravitational forces, the research team was able to discern that the sheep’s bone density decreased—as did the load required to fracture the bone. The weakened bone could break more easily,” the researchers reported.

Actually I’m surprised the animal rights activist groups haven’t brought more attention to this research. What I find most odd about this $1.2 million project is that more extensive human-subject studies have already been done. Somehow I don’t think studying how sheep bones will react in low-gravity is a good use of taxpayers dollars. I don’t see the need for sheep ranches on the moon of Endor anytime soon.

# 15 Cloud City on Venus

From the Wastebook:

The science fiction space adventure that took place a long time ago in a galaxy far, far away seems to be the inspiration to create a “cloud city” above Venus similar to the one in The Empire Strikes Back where Han Solo was frozen in a block of carbonite.

NASA’s High Altitude Venus Operational Concept (HAVOC) would begin by sending a robot into the atmosphere of Venus to “check things out” with the goal of establishing “a permanent human presence there in a floating cloud city.”

While $279,000 was spent designing the HAVOC blueprints,“NASA has no current plans to fund the concept.”But the Langley-based team “continues its work with the hope the space agency could make the plan come to fruition.”

As a sci-fi fan the Cloud City sounds awesome. From a taxpayer standpoint I am quite annoyed. $279,000 to create a blueprint for something that will never be built is hardly a good reason to increase the federal debt. I find that to be even more true since most future space exploration appears to be spearheaded by private organizations, and not NASA.

#19 Jazz playing Robots

From the Wastebook:

The Defense Advanced Research Projects Agency (DARPA) is spending $2 million to hire a team of musicians and researchers to develop musical machines including robots capable of performing a trumpet solo and jamming with human musicians.

Known as the Music Improvising Collaborative Agent (MUSICA), the system—it is hoped—will be “capable of musically improvising with a human player.”

“I think DARPA’s interested in a program that will interact with humans,” speculates Thomas. “Right now, a computer waits for us to tell it what to do. The idea [with MUSICA] is that the computer can communicate with us the same way we communicate with it. It might be able to anticipate needs or ask us for clarification on a goal, then help us plan that goal for the future.” The aim of the program is to “make computers more of an equal collaborator,” Thomas said.296 The long term goal is to create artificial intelligence by teaching computers how to be “more human” in thought and expression by jamming to jazz.

Now I get how such research could lead to new breakthroughs in creating true artificial intelligence. But I would ask this: should government be involved in this project? Especially since it will be unlikely to provide any results. If there truly was a good chance the group would yield results there are many private sector sources that would be more than happy to fund the project. Well, I guess if projects like this cause the debt to go too high, there will always be robots around to liven up a depressed economy through jazz.

# 46 Robot Lobby Greeter

This from the Wastebook:

A robot served as a lobby greeter at the University of Central Florida (UCF) this year as part of an Office of Naval Research (ONR) experiment examining how humans interact with robots.

This Department of Defense (DOD) grant to UCF “supports ONR’s Human Surrogate Interaction program, a three-year investigation into how humans interact with virtual (avatars), physical (animatronics), and other types of surrogates,” according to a DOD Information Paper. “The grant, Exploration of Human Surrogates for Live-Virtual Training, is a three year effort that began in March 2014. Total funding planned for the grant is $2,312,188. Defense University Research Instrumentation Program (DURIP) grant provided $178,437 in additional funding to purchase equipment that was combined with previous equipment purchased through 2012 ONR DURIP.”

So now we want to spend over $2 million to see how people will interact with robots? Is this really a good use of taxpayers dollars? I also wonder if the DOD ever looked at the plethora of research already available on the topic. Computer/Telco equipment manufactures and software vendors have been researching the topic for years in order to  launch products. The idea of interfacing directly with a non-human is not a new idea. But apparently the DOD wants to increase the federal debt by over $2 million to find out more on the topic.

Conclusion

I’ll just stop here. There is actually a lot of waste listed in this years book. But unlike the government I can’t spend other peoples money to complete projects; so I will end this post and focus on writing other projects that actually have a return on investment!

Being thankful when I watch I Pencil

November 23, 2015 Comments off
SoDakLiberty Turkey. Original turkey art © Can Stock Photo Inc. / lineart

SoDakLiberty Turkey. Original turkey art © Can Stock Photo Inc. / lineart

It is Thanksgiving week! Due to traveling and a short week at the office I will not be publishing any posts. But I wanted to take a moment to thank all of the readers of this blog for their continued support. Also, I would like to thank everyone who is involved in making the economic marketplace a truly amazing wonder to behold. Technically that includes everyone, so I would like to thank everyone being a part of the free market (or at least what remains of the free market… but that is a subject for another post).

Three years ago I posted about the I Pencil movie. Below is the contents of that post and the video for everyone to view. Happy Thanksgiving everyone!

In 1958 Leonard Read wrote a masterful essay named “I, Pencil“. I first read this essay about fifteen years ago and have always thought it a masterful way to explain how free markets can work and adapt without central planning. This essay pointed out the thousands, if not millions, of people who must interact and work together (even unknowingly) to bring a product to market.

To honor this timeless essay the Competitive Enterprise Institute, with some help from the Foundation for Economic Education, has created a well produced 6 minute video. You can view the video below or go the I, Pencil Movie website to view the video and other interesting facts about this movie and the original essay.

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Fantasy sports fate in SD still unclear, legislative battle coming?

November 19, 2015 Comments off
Fantasy Football by © Keith Bruce via Dreamstime.com

Fantasy Football by © Keith Bruce via Dreamstime.com

Earlier this week I brought attention to the South Dakota Gaming Commission holding a hearing about the fate of fantasy sports in SD. The core of the issue is whether fantasy sports wagering is a game of skill or if it is a game of chance. Personally I know enough people who participate in fantasy sports to understand it is a game of skill (one that takes a LOT of time). There was a potential that the South Dakota Gaming Commission meeting yesterday could clear up some of the confusion. That didn’t happen.

The SD Gaming Commission has yet to post minutes from the meeting, but the Argus Leader posted the Associated Press account of the meeting. A lobbyist for the industry, Griffin Finan, went before the Commission to make the case that fantasy sports betting is not a game of simple chance. The AP report notes that the industry will likely seek legislative protection for the industry:

Finan said more than 25,000 South Dakota residents are estimated to participate in daily fantasy sports contests each year. The industry may pursue legislation in South Dakota that would clarify that fantasy sports is exempt from state gambling law and impose consumer protection measures on operators, he said.

That will definitely be legislation I will be track during the 2016 session!

It was actually a statement in the article from Governor Daugaard’s spokesman that sheds light on where opposition to such legislation will come from:

A spokeswoman for Gov. Dennis Daugaard said in a statement that the governor would “consider any legislation, but is very concerned about allowing gaming in South Dakota that is unregulated and that competes with gaming that generates state revenue.”

There are two problems I see with the above statement. First the belief that such enterprises in South Dakota are completely unregulated. The very word unregulated has no meaning in the currently over-regulated United States. There are a number of federal and state regulations that the fantasy sports wagering industry must comply with, especially in the realm of consumer protection. If there is fraudulent behavior with one of the players in the industry (such as insider trading) current consumer protection laws can be used.

Second, and more important, is the governor’s office being concerned about competing with the fantasy sports industry. That is the main obstacle I foresee for any legislation coming in 2016. The State of South Dakota makes a lot of money off gambling. In order to keep getting that money it is likely big government politicians will push to keep the states monopoly over gambling secure. Technically there are already games of change that are exempt from the current state gambling ban in South Dakota. But are the big government bureaucrats in Pierre willing to give up even a little more gambling money in order to allow people to spend their own money how they wish? That will likely be a big part of the upcoming battle.

The remarks from the Gaming Commission and the AG’s office in the AP report are pretty wishy-washy. They really aren’t taking a stand at this time. It will likely take legislation providing guidance for those groups to understand that people should be allowed to spend their money however they see fit.

Fantasy sports fate in SD to be reviewed by the South Dakota Gaming Commission

November 15, 2015 1 comment
Fantasy Football by © Keith Bruce via Dreamstime.com

Fantasy Football – © Keith Bruce via Dreamstime.com

On Friday, November 13, South Dakota Attorney General Marty Jackley sent out a statement on fantasy sports wagering.  This is a topic that has gained a lot of national attention recently. The quickly growing fantasy sports industry has gone from being seasonal to becoming a form of skilled entertainment that players can enjoy and make daily wagers. This has left many bureaucrats to call for swift overreaching regulations or outright banning of the fantasy sports wagering industry.

Before looking at Jackley’s press release it is worth noting a few recent events that have occurred in the realm of fantasy sports wagering:

Now back to SD AG Jackley. His press release includes his summary of South Dakota laws that are relevant to the discussion. First he pointed to Article III, § 25 of the SD State Constitution. This portion of the state constitution prohibits games of change in South Dakota, and provides a few exceptions that the legislature can make legal in Deadwood (and on the reservations due to the gaming compacts).

Even though the state constitution has outlawed games of chance (with a few exceptions) that doesn’t mean fantasy sports wagering is outlawed. Jackley notes that

The South Dakota Legislature has enacted a general criminal prohibition against gaming where anything of value is wagered.  See SDCL Ch. 22-25.  It has traditionally been the position of the South Dakota Attorney General’s Office that pursuant to South Dakota law, games of skill are exempted from the state law prohibition.  In 2000, the Legislature enacted laws that specifically prohibit using the internet to accept or pay wagers at any location within the State.  See SDCL Ch. 22-25A.

So the big question is whether fantasy sports wagering is a game of chance or a game of skill. Those who participate in fantasy sports wagering say it is a game of skill, and one that takes a lot of time and research to properly play. Simply calling fantasy sports wagering a game of change fails to acknowledge the pure challenge that people participating in the wagering experience.

The South Dakota Gaming Commission will have a meeting on November 18 in Deadwood. The agenda includes the following item:

Review of Daily Fantasy Sports Betting in Light of SDCL Chapter 22-25A

Since SDCL Ch. 22-25A deals with the prohibition of Internet gambling I would assume the AG and Gaming Commission are looking for ways to show fantasy sports wagering is not legal in South Dakota. Hopefully that won’t be the case. As I said above fantasy sports is not a game of pure chance. There is a lot of skill and research involved for those that participate in fantasy sports. Hopefully the Gaming Commission will understand a wrong decision could instantly make hundreds of law abiding South Dakota citizens into criminals facing possible felony charges.

TPP in South Dakota politics part III: congressional delegation

October 26, 2015 Comments off

Last week I provided recaps of the Trans Pacific Partnership (TPP) in the South Dakota Legislature and the SD Department of Agriculture. In this post I will focus on some of the actions I’ve noticed taken by SD’s congressional delegation in DC. Most of the action seems to come from Rep Noem and Sen Thune. Sen Rounds has been pretty quiet on the subject.

US House Representative Kristi Noem

April of 2014 was the first time I took notice of Noem pushing for TPP.  At that time she took a ten-day trip to Asia-Pacific countries to talk about trade. After that trip began the push for TPP. Here is the US House floor speech Noem gave about TPP:

In the speech Noem was definitly supporting TPP because of the additional trade it would bring SD, and the US as a whole. Noem did mention that she couldn’t support TPP unless agricultural trade barriers are eliminated. At the time I thought of those as empty words from Noem, and still believe it to be true…

In September of 2014 I noticed Rep Noem promoting TPP. This was in response to an article she was highlighted in. Here is part of what she said in the article:

“Currently, nearly half of South Dakota’s exports are bound for the 11 other countries that would be involved in the TPP, and a further elimination of trade barriers would only expand our opportunities,” Noem said.

This continued the small push Noem had made for TPP.

Kristi Noem speaking in Aberdeen. Photo by Ken Santema 08/11/14

Kristi Noem speaking in Aberdeen. Photo by Ken Santema 08/11/14

Then in June of this year Noem’s office had a series of press releases promoting trade promotion authority (TPA). TPA would allow the administration to push through trade agreements and force congress to vote aye or nay; and it would not allow congress to amend any trade agreements.

On June 11 there was a press release trying to counter “misinformation”. Here is part of that press release:

It is false to say that TPP negotiations have been secretive.

Earlier drafts are not made public in this way, because revealing draft proposals before a deal is struck emboldens our opposition, undermines our negotiating positions, and exposes negotiators to public scrutiny over provisions that might not even be in a final deal.  We need to keep the upper hand to get the best deal for America.

Many of us believe negotiators SHOULD be exposed to public scrutiny. If transparency means anything it must be used at all times in government affairs. Corporations have been allowed to take place in TPP negotiations. Yet the consumers in the US that would be impacted by TPP have had no view of what goes on. From a public standpoint that process IS secretive.

Then on June 18 Noem’s office sent another press release trying to get support for TPA. This was directly after she voted Yea to TPA and wanted the Senate to do the same. Here is part of the press release:

“With Trade Promotion Authority in place, the American people would be guaranteed a seat at the negotiating table,” said Noem, a member of the House Ways and Means Committee, which has jurisdiction over such issues.

Noem definitely was trying to sell TPA. Of course she left out that when TPA is being used that all negotiations had already been done…

After the Senate passed TPA she sent a press release on June 24 urging President Obama to sign the bill. Here was part of that press release (which was mostly a rewrite of the previous one):

TPA allows Congress to help set the rules for trade negotiations and lays out congressional objectives of what a good trade deal looks like for America.  This helps ensure greater transparency throughout the negotiating process by empowering Congress to conduct vigorous oversight and hold the administration accountable.

Noem forgets to mention that TPP negotiations had almost completed at this time. Even if TPA would set rules for negotiations, which many find a dubious claim, it is hard to imaging that the negotiations would suddenly change at the end due to one piece of legislation passed in the final round.

Finally I recently noticed Rep Noem was speaking to students in Gregory. Here is what the Daily Republic reported about Noem in regards to TPP:

Another student asked about the Trans-Pacific Partnership, which is a proposed trade agreement between the U.S. and about 11 Asian countries.

When U.S. exports arrive in Japan, Noem said a tariff is immediately applied that raises the price by 38 1/2 percent. She said that practice makes U.S. goods unaffordable for citizens in Japan who want food raised and grown in the U.S.

“If we can get this trade agreement done and it’s done correctly, it will allow us to sell a lot more food and be good for our families here,” Noem said. “There will be more jobs, there will be higher-paying jobs and there will be more people who are able to help our economy be stronger.”

This comes after TPP had been finalized earlier in the month. It is quite clear that Noem is still supportive of TPP and believes it will be good for SD.

US Senator John Thune

The first activity of Thune supporting TPP actually came in support of TPA earlier this spring. In March Thune went on the Senate floor to push for the passage of TPA. Here is the press release and here is the clip of that speech:

In part Thune had this to say:

The first of these agreements, the Trans-Pacific Partnership, is being negotiated with a number of Asia-Pacific nations including Australia, Japan, New Zealand, Singapore, and Vietnam.

Currently, American goods face heavy tariffs in many of these countries, at times as high as 85 percent.

Tariffs of that size put American goods at an incredible disadvantage compared to their foreign competitors.

Tariffs provide a powerful disincentive for citizens in other nations to purchase American products.

Removing this disincentive would increase foreign demand for U.S. products, which would mean more business for U.S. farmers, ranchers, and manufacturers, and more jobs and opportunities for American workers.

Thune has done better than many at giving reasons to support TPP. Unfortunately TPP is not a free trade agreement. And TPP does not eliminate most tariffs; rather TPP reduces many of the largest tariffs that hurt trade for SD agriculture.

The other press releases from this spring were basically just ones to urge Democrats to support giving President Obama TPA. Kind of ironic the President needed the help of Republicans to pass TPA.

Senator John Thune speaking at the SD Ag Summit in Deadwood. Photo by Ken Santema 07/10/15.

Senator John Thune speaking at the SD Ag Summit in Deadwood. Photo by Ken Santema 07/10/15.

Then in June I was able to see Senator Thune speak about TPP at the SD Governor’s Agricultural Summit 2015 held in Deadwood. Thune was one of the guest speakers in the panels discussing trade opportunities for SD ag. He spent some time talking about how important TPA is and why he pushed for its passage.

Here is what I reported about Thunes presentation in relation to TPP:

Thune believes both TPP and TTIP are important to open up trade in the ag industry and that neither would pass without TPA. He noted that going back to the 1930’s that only one trade agreement had been passed without some sort of expedited authority like TPA. While talking about TPA Thune noted that he was not doing this to support Obama. Thune said Obama is only going to be around for another 18 months, and that TPA will be there for 6 years. So, Thune wanted to make sure that whoever replaces Obama will also be able to handle trade agreements. He went on to say that in order to be at the table for trade agreements that TPA is necessary. I disagree, but that again is a post for a different day.

Thune hoped TPP could be done soon (I am very late in doing this post, TPP is now finalized and waiting for a vote). He had some concerns about TPP, such as tariffs on dairy in Canada. I wish Thune had  gone into that talking point deeper. He really didn’t say what he thought would happen with that.

Really Thune spent very little time talking about TPP, and instead kept focus on TPA. He did have some high level talking points about how trade agreements have a positive impact on exports and that it helped national security. But overall he really didn’t get into any specifics about TPP.

Since TPP has been finalized Thune does seem to be backing away slightly. Here is what was reported by SDPB radio:

United States Senator John Thune says he generally supports trade deals, but some parts of the latest international agreement raise his concern.

….

Thune says he’s heard pieces of the deal since Monday’s agreement, and he’s concerned about some of the elements.

…“TPP has the potential to grow American exports when you consider that the combined nations in that agreement account for about 40 percent of the entire global economy, but we’ve got to make sure that the agreement lives up to the high standards that we set in the Trade Promotion Authority bill which we enacted earlier this year.”

Thune says he plans to carefully review the details of TPP before he decides whether to support the agreement.

Now he has concerns? Of course now Thune has actually had a chance to find out some of what is included in TPP. It is NOT a free trade agreement. And the “high standards” set in TPA were irrelevant, TPP negotiations were close to being completed by the time TPA passed. I don’t expect to hear much about TPP from Thune’s office in the next year. It is an election year for him, and Obama is likely to refrain from submitting TPP for a vote until after the election.

US Senator Mike Rounds

There has been very little coming out of Senator Rounds that I’ve noticed in regards to TPP. Rounds did sent out a press release in April of this year supporting TPP. Here is part of what he said:

Free and fair trade agreements across the world open up new markets to South Dakota products. Our farmers and ranchers would particularly benefit from agreements such as TPP and TTIP. But in order to negotiate the best deal for our country, we must allow the administration to pursue trade agreements through parameters set by the Congress, and within the Trade Promotion Authority, to enable our current and future presidents to negotiate the best deal possible. That is exactly what the Senate TPA bill would do. This method has a proven record of boosting economic activity and bringing higher-paying American jobs. I look forward to debating TPA legislation when it comes to the full Senate in the coming weeks.

This was released just before TPA was being debated in the Senate. He didn’t really go into TPP much. Nothing I’ve noticed out of the Rounds office makes me believe the topic is really on his radar. Perhaps he is just letting Noem and Thune take the lead on this issue.

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