Voder-Vocoder

Rules of the game:

You can change anything you want about the federal tax code, but your changes must be revenue-neutral. No starve-the-beast proposals.

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My suggestion.

–> Let A be the annual income a full-time (40-hour/week) minimum-wage worker would make.

–> Let B be the annual income of the median worker. (50% of Americans make less than him, 50% more.)

–> Let C be the income of the 67-percentile worker. (66.7% of Americans make less than him, 33.3% more.)

Replace current federal taxes with the following:

1) Increase the EITC (earned income tax credit) to a very large level. Make it 0 at zero income, maximum at A, and get down to 0 again at B.

2) Income tax of 50% on all income greater than C, minus philanthropic donations.

3) A huge tax on carbon emissions. On the order of $10 per gallon of gasoline, with an carbon-equivalent tax on coal, diesel, natural gas, etc.

4) A general policy that negative externalities are taxed equal to the indirect cost to society. Carbon emissions are the biggest part of this at the moment, but I like the idea of pollution taxes greater than the cost of totally cleaning up the pollution. And a big tax on non-reusable goods.

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UPDATE: Hey, there’s a website for revenue-neutral carbon taxes!

“Switchgrass has the potential to produce the biomass required for production of up to 1000 gallon of ethanol per acre.”

Each American, on average consumes 1023 gallons of oil per year.

As of 1997, there was 1.4 acres of farmland per person in america.

You can either eat meat OR drive cars once we run out of petroleum.

I got into an argument with a certain unnamed environmentalist the other day. I was arguing that when we (humanity) start to run low on petroleum and natural gas over the next thirty years, we will have to become more reliant of nuclear fission as a source of energy.

The only other options are:

1) Reliance on coal. Unfortunately, coal releases more CO2 into the environment per unit of energy than natural gas, so the more that we rely on coal, the more we accelerate global warming. Burning sulfur-​containing coal also contributes to acid rain. If you don’t think that acid rain is a bigger problem than radioactive waste, go visit Appalachia.

That said, we will have to use more coal whether we like it or not.

2) Reliance on wind and solar. These will have to be a big part of our plans, but the infrastructure will be expensive and take a long time to build. Kunstler argues that these things can not be built without cheap energy and so will never be built. I am less pessimistic than he. In an ideal world, the feds would be creating a TVA-like organization to issue bonds and start building, even it they won’t turn a profit for fifty years.

3) Using a lot less energy. We can save a lot of energy just by doing two things: outlawing pizza delivery and forcing everyone to take the bus to work. (TWAJS.) But in the end, we need a lot of energy to fix nitrogen to fertilize crops to feed the six+ billion people on the planet. The only other option is to allow a few billion to starve to death. Is that what you want?

Organic farming will never feed six billion people. (Dear organic farmers, please prove me wrong.)

4) Wait for fusion. Good plan. Santa Clause will put it in you stocking next Christmas. With the Toothfairy’s help. (Dear plasma physicists, please prove me wrong.)

5) The hydrogen economy. That Was A Joke Son.

No, I am not stuck in 1950. Nuclear energy is not cheap and does produce toxic byproducts. But we can deal with those byproducts. It’s just radioactivity. Stay away and keep it out of the atmosphere, groundwater, and the hands of terrorists.

No, I’m not an environmentalist any more. I am a realist. We should do what we have to do to keep billions of people from starving.

Background:

The trustees of the Social Security Administration have traditionally used demographic, economic, and fiscal models that end after 75 years. The idea is that there simply is no way to accurately predict the future beyond that. (Aside: can’t we fix the long-term problems of SocSec by making _demographic_ changes? Exempli gratia: increase immigration.) The current administration made waves this year by integrating these numbers out to infinity to overstate the crisis.

Notion:

We (society as a whole) would be irresponsible if we did NOT plan for the future—at least 75 years out. On the other hand it would be a waste of time to plan beyond 75 years.

Discuss.

I would dismiss Kunstler as a quack, but for one thing.

I know the history of Easter Island.

Neal Stephenson, 1992:

As a result, this country has one of the worst economies in the world. When it gets down to it—talking trade balances here…once we’ve brain-drained all our technology into other countries, once things have evened out, they’re making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here—once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel—once the Invisible Hand has taken all the historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity—y’know what? There’s only four things we do better than anyone else
music
movies
microcode (software)
high-speed pizza delivery

13 years later:

Thomas Friedman, 2005:

It is this convergence — of new players, on a new playing field, developing new processes for horizontal collaboration — that I believe is the most important force shaping global economics and politics in the early 21st century. Sure, not all three billion can collaborate and compete. In fact, for most people the world is not yet flat at all. But even if we’re talking about only 10 percent, that’s 300 million people — about twice the size of the American work force. And be advised: the Indians and Chinese are not racing us to the bottom. They are racing us to the top. What China’s leaders really want is that the next generation of underwear and airplane wings not just be ”made in China” but also be ”designed in China.” And that is where things are heading. So in 30 years we will have gone from ‘’sold in China” to ”made in China” to ”designed in China” to ”dreamed up in China” — or from China as collaborator with the worldwide manufacturers on nothing to China as a low-cost, high-quality, hyperefficient collaborator with worldwide manufacturers on everything. Ditto India. Said Craig Barrett, the C.E.O. of Intel, ”You don’t bring three billion people into the world economy overnight without huge consequences, especially from three societies” — like India, China and Russia — ”with rich educational heritages.”

That is why there is nothing that guarantees that Americans or Western Europeans will continue leading the way.
[…]
Instead of complaining about outsourcing, Rao said, Americans and Western Europeans would ”be better off thinking about how you can raise your bar and raise yourselves into doing something better. Americans have consistently led in innovation over the last century. Americans whining — we have never seen that before.”

One more thing about how the dollar’s decline will effect us: Stephen Roach has a column,
“When Weakness Is a Strength”
in todays Times. It discusses two possible outcomes: a market crash or a managed correction.

I’ve been worrying about the federal buget deficit and its effect on the value of the dollar. Here’s what Tresury has to say:

At 3.6 percent of GDP, the 2004 deficit is up from the 2003 level of 3.5 percent of GDP and is the highest level since 1993.

The deficit increased in 2004 even though the recession officially ended in November 2001. This is the first time since before the Depression of the 1930s that the deficit has continued to increase this far into a recovery.

Nations in the eurozone are required to keep their deficits under 3% GDP. They don’t always meet this goal, but it is a real goal for them.

The administration here has shown no desire to keep deficits in check. They will not cut military spending and they will not fail to cut more taxes, so theoreticaly, they will have to cut non-military spending (another conservative goal). I don’t see that happening, because as soon as they start to gut those parts of the buget in quantities large enough to make a difference, they will lose the significant percentage of republican voters who believe that the gop can deliver a free lunch. There is an election in a only two years away.

So the dollar will gradually slide against the euro. But it’s not as bad as it could be. It’s only the difference between 3.6% and 3.0%.