Thursday, April 14, 2011

Have the 18 wheelers burn natural gas

That's T. Boone Pickens plan, as reported in Forbes.
It makes a certain amount of sense. Natural gas tanks are huge compared to gas tanks. The big 18 wheeler tractors have plenty of space for the bulky tankage. Much easier than fitting a natural gas tank into a Corolla.
The writer estimates that converting the truck's diesel engine to natural gas would cost $60,000 a truck. That's damn high. I bought an entire new V8 engine for $3000 a few years ago. Then he thinks the government should pay for the conversion.
Apparently the conversion to natural gas amounts to converting the diesel to a spark ignition engine, and reducing the compression ratio from 18:1 down to 10:1. That's gonna cost you fuel economy, big time. I'd want to see some test results showing fuel consumption on the natural gas converted engine. Would the converted mill be more economical than stock diesel? At what prices for natural gas and for diesel fuel?
And, the chicken and the egg problem. Truck stops don't supply natural gas right now. They won't until there are some customers for the stuff. Truckers won't convert until there is a refueling infrastructure to keep 'em running.

Expenditures Rise to meet Income (Parkensen)

Medical care is like that. If the funds are there, they will be spent. Make more funds available, and they get spent too. You can always do another CAT scan (just to be sure), do more blood work (something might develop), make another office appointment (see how the patient is doing), prescribe another medicine (just in case). Then you can add more costly safety requirements. Such as requiring the air conditioning in hospitals hold the temperature to plus or minus one degree, no matter what the temperature is outside. Or requiring that even doctor's offices have backup electrical generators.
Medicare has no limit on payouts. Medics submit bills and Medicare pays them. With a deep pocket paying, a lot of medical stuff gets done, and billed, and paid for.
Congressman Paul Ryan has proposed a way to cut medicare costs. Seniors would be given money or vouchers to purchase health insurance. Where do the savings come from? Healthy seniors would tend to purchase "hospitalization only" plans and pay routine costs out of pocket. "Hospitalization only" plans are only $3000 a year, where as the "cover everything" plans are $14,000 a year (last year's prices, tomorrow's will be higher). Patients tend to refuse costly treatments when they have to pay for them. That's where the savings come from.
Medics hate this. They have to put on their best bedside manner and convince needy patients to dig into their own pockets to pay for pills or scans or blood work. Medics like to prescribe and not have the patient worrying about the expense. Improves the doctor-patient relationship no end.
So, is the Ryan plan a good deal for seniors and the country as a whole?
Depends. Ryan's plan puts a hard cap on the government's liabilities. Uncle chips in so much and no more. Patient pays the rest. This is good for the country as a whole. This country spends twice as much on health care as any other country in the world and we don't get anything for it. We would be better off directing that money into economic development, research and development, infrastructure, education, or other worthy causes.
Would it be a good deal for seniors? Depends upon how costly insurance gets, and how much Uncle chips in. This is unclear. Ryan's plan suggests/hints/handwaves that Uncle will chip in $10000 which is about what today's Medicare costs the government. Future contributions would rise at the rate of inflation. Would that be enough? Who knows?
Also, can the senior keep the savings that come from electing a "hospitalization only" insurance plan?
At a guess, it will work out OK for seniors whose health is fair-to-good, and visit hardship on those with poor health and no money.

Wednesday, April 13, 2011

Minor IRS improvement

This is the year the IRS gave up on mailing tax packages (instructions and forms) to us poor taxpayers. Up here you gotta download 'em. I don't know what people without internet access, a computer and a printer do.
However, all is not dark. The down loadable forms are trick PDF files that allow you to enter numbers in the blanks and them print out the completed form.
Neat. Up til now I had been doing my taxes on a Excel spreadsheet and then entering the spreadsheet results on a paper form 1040 using pen and ink. In my atrocious handwriting. This year I can type the stuff in and print it out, all neat.
I never got into TurboTax. I tried it once, and it was all web based and stored all my stuff somewhere out there on the web, not on my private and secure hard drive. I went back to Excel.

Ten year deficit projections

Would you believe totally wishful thinking? How can anyone project ten days into the future, let alone the years? The current budget discussion would be more honest if the debaters stuck to one year projections.

Words of the Weasel, Part XVI

"Tax expenditures" which really means tax deductions and exemptions. "Reduction in tax expenditures" which means a tax hike. Obama used both of these gems in his speech this after noon. After a lot of typical Obamaspeak, it seems that his plan to balance the federal budget will rely upon "tax expenditure reductions".

Tuesday, April 12, 2011

$6 billion of the $38 billion in cuts is smoke&mirrors

Apparently sharp eyed budget cutters found $6 billion unspent in an account for the census bureau. They reclaimed that and called it a "cut".

So, where do the Republicans go from here?

Next big challenge is the debt ceiling. Current law limits the government's borrowing authority to $14.something trillion. When we hit that ceiling, sometime in a few weeks, we have a problem. No more borrowing, which means the government revenue takes a 40% hit. Note, it doesn't mean we default, it means a 40% reduction in the money Uncle has to spend. That's a lot. In theory such a spending reduction could be done, but the pain would be intense.
The house republicans have enough votes to prevent raising the debt ceiling. If John Boehner were to call out his troops, he has the votes to stop it.
Question, what should the Republicans demand as a quid pro quo for raising the debt ceiling?
They could go for a federal balanced budget constitutional amendment. That would make a lot of conservatives happy, but I doubt it would do much good. Too many lawyers to invent ways of spending money but calling something else. Plus there would have to be an escape clause for real emergencies. And pretty soon everything would be a real emergency.
They could demand legislation to end farm subsidies, road building subsidies, ethanol subsidies, every kind of subsidy under the sun.
They could demand a resumption of oil exploration, and permits to drill in the "Arctic National Wildlife Refuge" (ANWR for short).
They could demand curbing EPA.
They could try and pass Ryan's plan for Medicare, replacing the current cost-plus and cost-no-object system with a system of private insurance plus subsidies for the sicker and more needy elderly.
They could demand interstate sale of health insurance, and the right to import medicine from any reasonable first world country.
They could demand repeal of Obamacare, but that probably won't fly, Obama would rather take a 40% revenue hit than give up his baby.
We shall see what happens next.