280 comments on DrumBeat: January 25, 2008
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280 comments on DrumBeat: January 25, 2008
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Dulles Rail Project All but Dead
Here is the letter that the FTA sent to the Governor.
There are already a lot of recriminations about this. There are a lot of people that are upset at the no-bid contract that was awarded to Bechtel (lead contractor for the Big Dig), and thus there are concerns about substandard construction and cost overruns. And of course are upset at the way Bechtel pushed for aboveground rail in a busy business district, and ignored requests for an underground route.
There were concerns on the part of the FTA that there was no funding plan in place for the 2nd half of the project (that would take the line out to the airport).
There were concerns that the Airports Commission doesn't have experience managing large projects like this, which of course increases the danger of cost overruns.
There is of course talk about how the Feds under the current administration really don't like rail at all in any form, and would rather build either roads or BRT. They changed the scoring system to make it much harder to get any project off the ground. Of course they don't have any problems with shoveling money into Iraq, but that's another matter entirely.
One question I have for Alan is why is it so (*&(*& expensive to build heavy rail. 5 billion for a 23 mile segment seems like a lot, but I don't have anything to compare against, so perhaps it is a reasonable estimate for this type of project.
Truly hilarious that the feds would be complaining about no bid contracts. They never met a no bid, sole source contract they didn't like. But that would be for truly useful projects like Iraq. Not that I support sole source contracts. But this administration has zero credibility in managing its way out of a paper bag.
And, of course they hate rail or anything that would interrupt are rapid descent over that large cliff called peak oil.
THIS IS AN OUTRAGE !!!
A last minute demand without notice for impossible to meet conditions !
Please note that the federal share (in the federal city) was only 18% !
Years of wrangling and effort to raise the monies, and then blindsided by the pro-oil ideologues of the GWB administration. A blatant bias against non-oil transportation. A badly needed project.
THERE IS NO EXCUSE AND ZERO JUSTIFICATION FOR THIS KILL !
Utter and complete BS !
Best Hopes for the next 361 days,
Alan
PS: The Federal process, to Ration by Queue (and the Dulles extension has waited decades in queue) inherently raises costs and complexity. It is NOT designed to lower costs, but to raise them.
A comparable might be the CTRL projects to bring high speed rail into downtown London. 5.2 billion pounds (about $10 billion) for 108 km (67 miles). However, the Dulles extension need not have cost as much, but then it would NEVER get federal funding !
Who did you think was going to pay for Iraq
and the "Stimulus" package?
"Systems collapse not primarily because of rebellion from below
but because of the weaknesses of the dominant classes and the impossibility of
their maintaining their level of gain and privilege. It is only when the existing
system is weakened in terms of its own logic that the push from below can
possibly be effective."
-Immanuel Wallerstein
The federal share of the project was $900 million (about 18%), the balance from state and local sources.
But raising $4+ billion from local and state sources was a difficult challenge that took lots of political and economic deals. Now unwound by a single bureaucratic move.
Best Hopes for 90% Federal Funding for Urban Rail, just like the funding for the Interstate Highway System,
Alan
More and more, depending on the Fed will be futile.
Better is to go the Eisenhower Interstate route:
That this is indispensible to the Pentagon.
Pentagon rail to Dulles?
Yeah, I know - I live in the middle of this area. If this project had gone through, we would have a station walking distance from home. They had actually gone so far as to start some of the utility relocation.
It is far too early to say where things go from here. There is a public meeting next Monday of the task force that the county has set up to work up a new master plan for the area - I would be tempted to go to see what the consensus is.
Our state government isn't in a good shape right now. The House is held by the Republicans who refuse to consider *any* form of tax increase whatsoever. Our state gas tax is among the lowest in the nation, but any increase whatsoever is out of the question. Yet 'transportation' is always one of the things highest on the list of things that people want (primarily more roads, I guess, but things like rail and bike lanes also have trouble).
Last session they went so far as to pass a set of "abuser fees" - essentially fines to people with bad driving records can can amount to thousands of dollars, and the author of the bill was of course an attorney who specializes in traffic cases. No, no conflict of interest there. That was the Republican solution to raising money for transportation projects. The outrage has been so great that they are in the process of undoing that - even the author of the bill has bailed on the concept.
I live in the area as well. The Post article mentions a new 1% car tax on new vehicle sales, and three bills under consideration contain a gas tax increase.
No tax at all up to 2.0 liters, then $500/liter for used and $1,000/liter for new each time they change hands. Utility vehicles might get different treatment, but they have to be utility vehicles, not this minivan/SUV stuff sneaking through.
Last year I had to take a flight to DC. I chose National over Balt or Dulles in spite of the higher cost and scheduling problems. The ease of getting on the subway made all the difference in the world. Still impressed by it.
Don't you mean Reagan National
Yes, Ronald Reagan National Airport over Baltimore-Washington International Airport or John Foster Dulles International Airport. With all the acronyms on this site, I thought an abbreviation might be tolerated.
BTW, wasn't it George Washington National Airport originally? And how does it keep the name National when, I think, international flights leave from there?
I can drive MY VEHICLE on any road in the USA. Railroads, including the right-of-way, rail beds and rail traffic control systems are all privately owned by companies with no desire to support efficient low cost rail systems with any real level of competitioon between companies supplying service on the rail system.
If the government would acquire all the railroad right-of-way, trackage and railroad traffic control systems nation wide and then open access to those rails to any private enterprise, Then I would give strong support to rail. This type of public/private operation works very well for both highways and airways and could work equally well for rails.
Can you imagine if trucking companies owned all the highways and only the one company that owned each segment of the road could operate on that segment and NO public vehicles were permitted on the road? Or if all the airways were owned by the individual airline companies and only each airline that owned that particular part of the airways was allowed to operate in that air space and NO corporate/private avaition was allowed to operate at all?
I can not give support to continued massive financial support for antiquated structures like our current all private rail systems. It simply does not work to the benefit of the public. Even 100 to 150 years ago people used horses and horse & buggies for transportation becasue railroads were not organised to provide the transportation they needed.
In my dreams, each state would have a single RR system. It would be owned by the public, but not by the government. Instead, an elected board of trustees would be responsible for operating the system in the public interest, and be accountable directly to the voting public. If people wanted more/better rail service, all they would need to do is vote in trustees that were dedicated to doing that, and to pay the increased fares that this would require. Those wanting absolutely lowest fares could vote for that ticket, and they would then get what they pay for. Providing the citizenry with a direct political feedback loop in addition to the economic feedback loop of the marketplace would best assure an outcome that is both socially and economically optimal.
This arrangement would cover both passenger and freight, which would all be under the same management. This would eliminate the problem of Amtrak being a 2nd class citizen because it doesn't own the rails it runs on.
Routes that crossed state lines could be operated on a cooperative or joint-venture basis between the two neighboring states. I would not envision any route that ran longer than between two cities; traveling longer distances by rail would require changing trains at each city.
This arrangement would get the federal government out of the railroad business altogether, except possibly to arbitrate any disputes between states. It would also get corporations out of the railroad business.
I think this would work great if we could ever get it set up. Working out the financing for the initial buyout, and getting both the FedGov and the corporations out of the way would be the really difficult part.
Community investment trusts. Doesn't have to be only at state level, but could work fine at muni or regional level too. Requirement that ownership, investment and control remain within a bounded geographic area. That form of ownership is a very good replacement for corporations. Which, of course, is why corporations try to stop them, a classic example being the big telcos attacks on muni wireless and the demise of community cable tv.
Historically, it was this sort of coop that wired and powered the rural areas in US.
cfm in Gray, ME
I can drive MY VEHICLE on any road in the USA.
Nope. A few 'roads' have restrictions. Like number or people, weight, or if you have or have not paid a toll.
If the government would acquire all the railroad right-of-way, trackage and railroad traffic control systems nation wide and then open access to those rails to any private enterprise, Then I would give strong support to rail.
Not necessary - under the natural monopoly concept, the government can say 'yes you own the railway, now you must allow others on it at X regulated price'
Wallerstein is merely paraphrasing Aristotle, The Politics.
It is always easier to retain power than to seize it, thus the old rulers shall always be considered the responsible party for their own demise.
Wallerstein gets credit for paraphrasing the best, you would enjoy reading from the original.
Their mistake was in asking for federal funding at all. I'm beginning to come to the conclusion that the FedGov is only going to be part of the problem and not part of the solution, and should therefore be bypassed, ignored, and defied to every extent possible by those that actually are trying to solve problems. The more local the funding and control of a project is kept, the more likely it will be to actually succeed. This is the new paradigm.
We've gotten so used to the FedGov being a limitless trough from which a limitless number of pigs can be fed. That is quickly coming to an end. Between the consequences of peak oil & other resource scarcity, the damage starting to be done by GCC, the enormous waste of Iraq and other Bush boondoggles, the mountain of debt, the massive trade deficits and hollowing out of the US manufacturing base, etc. -- all of that is adding up to bills starting to come due now. The US is about to enter an era when the FedGov is going to find itself so constrained that it won't really matter all that much who is in charge, they won't be able to come up with the money to even keep existing programs going, let alone fund any new initiatives.
State and local governments are going to be under severe fiscal stress also. Fortunately, when it comes to transport projects, there is a projected cash flow from user fees that one can work with. The trick will be to come up with a way to package the deal so that the debt service can be covered even with relatively conservative and pessimistic assumptions. This won't work everywhere, but as energy prices rise and ever more people find themselves really needing mass transit, more and more projects should become financially viable. This assumes that the muni bond market at least can be kept afloat.
The US is about to enter an era when the FedGov is going to find itself so constrained that it won't really matter all that much who is in charge, they won't be able to come up with the money to even keep existing programs going, let alone fund any new initiatives.
That sounds remarkably like:
... They will be lucky to be able to answer the phones...
by Kunstler.
State and local governments are going to be under severe fiscal stress also
The state and local gov's will be bankrupt. Between their bonds going to zero worth(via Ambac et al insolventency) and lower revenue via lower taxes.
This assumes that the muni bond market at least can be kept afloat.
This is assuming alot I believe.
As the next wave of Loan Resets hit this summer, you are going to see 1929 crash next October.
$2 Trillion (that's 200 million million) of losses exposed between now and then.
Write that one down. 1929 Next October.
Warren Buffett is supposedly riding to the rescue for the muni bond market. I don't know if he can pull it off, but he might be able to. That isn't the sector that is particularly problematic right at the moment.
Some states and municipalities will be in severe fiscal stress and may go under, but I wouldn't be so quick to assume that all will, and certainly not all at once.
'That isnt the sector that is particularly problematic right at the moment.'...I beg to differ...'Traders are pricing in a 71% chance that MBIA will default in the next five years and a 73% chance that AMBAC will default in the same time period.' 'The triple-A credit rating of the bigger bond insurers is crucial because any demotion could lead to downgrades of the $2.4 trillion of municipal and structured bonds they guarantee.' 'If credit insurers turn out to have inadequate reserves, the credit default swap (CDS) market may well seize up the same way the commercial paper market did in August 2007. The $45 trillion of outstanding CDS is about five times the $9 trillion US national debt. The swaps are structured to cancel each other out, but only if every counterparty meets its obligations. Any number of counterparty defaults could start a chain reaction of credit crisis. The Financial Times reported that Jamie Dimon, chief executive of JPMorgan, said when asked about bond insurers: "What [worries me] is if one of these entities doesn't make it ...? The secondary effect ...? I think could be pretty terrible." Even Warren Buffet cant come up with $2.4 trillion to bail out the bond insurers. As I understand the situation Mr Buffet has started a new bond insurance company and has limited his involvement to taking on only solid risk. I have seen no news of Mr Buffet involving himself in existing bond insurance comapanies.
http://www.atimes.com/atimes/Global_Economy/JA26Dj05.html
...snip...'Maintaining an AAA credit rating is of utmost important to bond insurers like MBIA because they need a strong credit rating in order to guarantee debt. Moody's, Standard & Poor's and Fitch are all reviewing the financial strength ratings of bond insurers, which write insurance policies and other contracts protecting lenders from defaults'...snip...
For the insurers to maintain the necessary triple-A rating, their capital reserve would have to be repeatedly increased along with the premium they charge. There will soon come a time when insurance premium will be so high as to deter bond investors. Already, the annual cost of insuring $10 million of debt against Bear Stern defaulting has risen from $40,000 in January 2007 to $234,000 by January of 2008. To buy credit default insurance on $10 million of debt issued by Countrywide, the big subprime mortgage lender, an investor must as of January 11, 2008 pay $3 million up front and $500,000 annually. A month ago, the same protection could be bought at $776,000 annually with no upfront payment'...snip...
Credit-default swaps tied to MBIA's bonds soared 10 percentage points to 26% upfront and 5% a year, according to CMA Datavision in New York. The price implies that traders are pricing in a 71% chance that MBIA will default in the next five years, according to a JPMorgan Chase & Co valuation model. Contracts on Ambac Financial, the second-biggest insurer, rose 12 percentage points to 27% upfront and 5% a year. Ambac's implied chance of default is 73%'...snip...
Interesting article by Peter Schiff- "To line their own pockets, Wall Street willingly exposed shareholders to risks they never would have assumed with their own capital". That is how the game is played. http://www.europac.net/externalframeset.asp?from=home&id=11574
I'm not sure how this is all going to pan out, but just a couple of things to keep in mind:
1) Municipalities themselves are not defaulting on their debt to any significant extent right now. There is always the odd one or two, here or there, now and then. I'm not aware of any sudden upsurge beyond the normal background noise, though. There is some speculation about growing foreclosure rates plus a general economic downturn putting municipalities into such fiscal stress that they will be at high risk of default. This might happen in some places, although it is a little early to know for sure. There is no reason to single out municipalities, though. If things get that bad, plenty of corporations are likely to default as well. This is why I said that I didn't see munis as being a particularly troubling sector right now.
2) It soounds like the Buffett initiative will provide a pathway for municipalities when it comes time to issue new debt. If the fallout from AMBAC and MBIA hits municipalities too hard, they might just issue new debt through Buffett in order to refund the old.
River
Take a look at this site sometime.
Pension Watch
http://www.pensiontsunami.com/
http://www.pensionriskmatters.com/
Thanks, I will check them out.
The muni market isn't the problem. it's the mortgage backed bonded insuring part of the equation that's the problem. some say that muni bond insurance is basically just marketing. they don't really need it. some states I believe have just not gotten insurance when issuing bonds.
The municipal bonds here are paid with property taxes, which most certainly ties directly to the mortgage muddle, and we'll all recall Orange County's messy bankruptcy in 1994 as a foreshadowing of what can happen. Their bonds were insured, no?
the mortgage insurer problems have nothing to do with munis. I don't think any muni bonds will go to zero SOLELY because of an insolvency at a bond insurer.
Nope, they'll just get a free (NOT!) haircut with every bond issue and they'll be inspected like a first round private placement every time they want to go to the funding well. That'll put a crimp in development, yes indeed.
A couple of decades ago, a Single A municipality would issue binds and pay a premium interest rate over a AA or AAA municipality (revenue bonds were often a 1/8th or 1/4th or so premium over general obligation bonds as well). The spread between A & AAA could approach 1%.
Then someone came up with a great idea, have a AAA insurer insure the A muni for significantly less than the risk premium ! Transform A into AAA, lower the interest rate, pay the insurer and pocket the rest of the savings !
We will just go back to status quo ante. Buffett will set up a modest deal for AA munis to go to AAA, but he seems likely to stear clear of A munis. A munis will pay a premium interest rate.
Alan
Write this down:
1929 style crash NEXT October. 80 years, 2 generations later.
I don't recommend holding equities right now but I wouldn't short anything either. The market can stay irrational longer than you can stay solvent.
"I'm beginning to come to the conclusion that the FedGov is only going to be part of the problem and not part of the solution, and should therefore be bypassed, ignored, and defied to every extent possible by those that actually are trying to solve problems. The more local the funding and control of a project is kept, the more likely it will be to actually succeed. This is the new paradigm."
I heartily endorse this not-so-new truism. This is also another reason why we cannot be called "reversalists." We want action, change, adaptation, evolution, all of which go far beyond anything starting with the prefix "re," as in reform, reverse, etc., except REvolution and REvolt.
except REvolution and REvolt.
http://www.govtrack.us/congress/bill.xpd?bill=h110-1955
Some local governments are beginning to fight back...
http://www.atimes.com/atimes/Global_Economy/JA26Dj06.html
'Local governments versus financial giants
The city of Baltimore is filing suit against Wells Fargo, alleging the bank intentionally sold high-interest mortgages more to blacks than to whites - a violation of federal law. Cleveland is filing suit against investment banks such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo for creating a public nuisance by irresponsibly buying and selling high-interest home loans, resulting in widespread defaults that have depleted the cities’ tax base and left entire neighborhoods in ruins. The cities hope to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent demolishing and boarding up thousands of abandoned houses.
"To me, this is no different than organized crime or drugs," Cleveland Mayor Frank Jackson said in an interview with local media. "It has the same effect as drug activity in neighborhoods. It's a form of organized crime that happens to be legal in many respects."
The Baltimore and Cleveland efforts are believed to be the first attempts by major cities to recover social costs and public financial losses from the foreclosure epidemic, which has particularly plagued cities with significant low-income neighborhoods. Cleveland’s suit is more unique because the city is basing its complaints on a state law that relates to public nuisances. The suit also is far more wide-reaching than Baltimore’s in that instead of targeting the mortgage brokers, it targets the investment banking side of the industry, which feeds off the securitization of mortgages.'
Madrid is seen as a model of fast and cost-effective subway expansion. They are just finishing (several projects a few months behind) the largest subway expansion in history, which now gives Madrid the second largest (after London) subway system in Europe (larger than Paris, Berlin, Moscow). 331 km (almost 200 miles) for only 4.2 million metro population.
80.9 km (about 49 miles) in 4 years for 4 billion euros (almost $6 billion at today's exchange rates, a bit more than US$4 billion when started).
It is worth noting that this is long lived infrastructure. The subway I took to the ASPO-Boston convention opened in 1897. The tunnel bores (perhaps 40% to half of the 1897 cost) are original. The tracks last about 50 years, the electrical about 40 years, rolling stock 40 years (but I use 1923/24 streetcars :-), the stations were rebuilt in the 1920s to handle larger volumes of people and are being rebuilt again for ADA access.
Best Hopes for 49 miles of new Subways in New York City, Los Angeles, Miami, Washington DC, and SF Bay area (all with plans for expansion) and LOTS of Light Rail from 2010 to 2014, and more after that.
Ed Tennyson believes that the Silver Line to Dulles should be extended to downtown Leesburg, so that would be most of DCs 49 new miles.
Alan
Why can't all those well paid No. Va federal employees finance this project themselves? How do the poor folks here in Decatur County, Iowa benefit from this project? If every taxpayer in this project's service area had pitched in a buck a week over the last 40 years then this project would have been done 30 years ago. This rail line doesn't exist because the locals haven't been convinced to pay for it. It is the same for every other rail project in the world. If it's such a good deal for local economies then local economies should make the investment.
Apply your double standard to highways, then I'll take you seriously.
Local contribution was 81%, $4.1 billion (WAY TOO MUCH BTW). It would have saved 25,000+ barrels of oil/day, a decent percentage of US military use. The federal government pays no property taxes of their property, which reduces the wealth of the area.
Let us *STOP* wasting money on ALL agriculture subsidies (does me no good, just higher prices at the grocery store). Drought, hail, tough luck, use your savings or sell out.
And STOP *ALL* ethanol subsidies and support immediately. The money wasted (and it is wasted) on ethanol should be spent to provide 90%, not 18% federal funding on a REAL oil saver ! The Dulles extension will save 25,000+ b/day for over a century. Far more than all the ethanol in Iowa will (net).
And we need tolls on your Iowa Interstates and US highways to repay, with interest, the 90% federal funding to build them.
Alan
I don't know if you're serious or not, but just in case you are... Farming subsidies are necessary. You might argue about how the program is run, but subsidies are necessary.
Subsidies aren't just disaster assistance. They're mostly price insurance, in case there's a surplus and prices drop. It's all very well to say "lower the price in the grocery store," but how will farmers continue, if the price they're getting is less than it cost them to grow the stuff?
Farming is not like manufacturing widgets. If, say, Nintendo runs out of Wiis, the worst thing that happens is some kids don't get any at Christmas and cry all day. If the food runs short, though - some customers aren't going to live until next Christmas. The free market takes too long to work for agriculture.
Flawed as they are, farm subsidies are about the last thing I would give up.
I saw it as Alan being facetious, showing where other subsidies exist and calling thomas deplume out for his hypocrisy over rail subsidies.
I wondered about that. But reading the part about ethanol subsidies, well, I had to take his post as serious. I would get rid of ethanol subsidies in a heartbeat, if I could.
considering his "Does me no good" comment and his past support for saving New Orleans, San Fanscisco and New York at the cost of all other cities because *HE* values those 3 cities, I read it as not tounge in cheek.
What happens to the poor if they don't get propped up is a concern. Riots are not pretty, and I'm rather sure no riots would be something Alan would find valuable.
Sometimes I just have to stir the pot to see what's cooking. Alan gave good reasons for federal support but only in the context of fairness in subsidies are handed out. I believe subsidies need to be balanced nationwide. I would prefer to have tax deductions and a multitude of credits and allowances eliminated and replaced with per capita subsidies via block grants to the states. It is one of the few repub ideas I like. Let the special interests fight it out in the state legislatures.
Another monkey wrench from the Bush's Cabinet to hold up or kill any project or legislation that would reduce our 'addiction to oil'. This week, Bush's EPA administrator killed an effort by California and 16 other states to lower their greenhouse gas emission through lowered emissions from vehicles, which would have increased auto fuel economy ratings above current targets. The EPA administrator went against staff recommendations to allow the increased ratings.
http://news.yahoo.com/s/ap/20080123/ap_on_go_co/epa_california
What is arguably most outrageous about this -- among all the outrageous aspects of the story -- is that at a time when the USA federal government is borrowing money to drop from helicopters in a phony, futile "economic stimulus package" the same federal government is killing the true stimulus for economic revitalization and long-term sustainability.
If we want to do some economic revitalization, why not do some big and helpful public works projects? We need to rebuild our urban infrastructure to be more resilient and sustainable -- why not keep many people employed building rail projects throughout the country?
The money spent would actually give us an important positive product, and the people employed in working on rail and related projects would have money to spend in their communities.
I honestly think that the current administration is trying to drive the USA into a massive brick wall at high speed -- all the better to declare martial law, I suppose.
I do not trust the Democrats to do better, by the way. The top Democratic Party leadership is most clearly complicit in the war crimes and economic crimes committed by the USA and the corporatists who run the government. As John Pilger recently wrote, the Democrats cannot challenge the fascist status quo, because to do so would show that they themselves are deeply enmeshed within the corruption.
This is why we have no move in a positive direction. My guess is that a new Democratic administration will do very, very little to right these wrongs in spite of all kinds of promises about "The First 100 Days" of a new administration and similar rhetoric.
We are on a collision course with reality, and our leadership is fighting over who gets to sit in the drivers seat when we actually hit the wall.
maybe that is the answer, it doesnt sufficiently facilitate the looting of the treasury to be worthy.
beggar-
No one said late stage capitalism was going to be fun. This is just the thugs looting what is left. We are ruled by the least capable and most morally corrupt members of society. This is not a surprise in a collapsing and degenerate state.
Yup.
Was it you who posted the link to "kakistocracy"?
http://www.bartleby.com/61/49/K0004900.html
This stimulus will mainly cause even more money to leave the country for more of those all important baubles that we know are so good for the long term health (not just economic) of our nation and the planet. The package is otherwise known as the Chinese stimulation package and is going to a lot of people who are quite well off, anyway.
Recessions come and recessions go but we haven't had a real recession for so long that we think we are immune.
I believe John Edwards has at least spoken out against this madness and said we should emphasize real green jobs for now and for the future.
Anyway, perhaps those of who are receiving this windfall can think of something useful to do with our money. Perhaps a thread with some good ideas in this regard would be useful
There was some discussion of this in yesterday's DrumBeat. It was also much discussed last night at dKos. I guess it depends on what you want to achieve. Being a Democratic site, a popular suggestion there was to donate it to a Democratic candidate. People here seem mostly disillusioned with US politics, so perhaps donating it to a charitable cause?
Some wanted to "punish" the government by not spending the money. Use it to pay down debt, save it, but don't spend it.
Suze Orman last night recommended paying off debt, and if you're debt-free, investing in the stock market. She thinks savings accounts will be no good. We're headed back to 1% interest rates, so inflation will eat away at your money.
Others suggested shopping - but only locally.
The CNN talking heads last night said there are two situations that don't help stimulate the economy. 1) if you pay down debt and 2) if you buy what you always do, and the extra money only covers the increased cost (higher gas and food prices, say).
As for me, I'm still thinking it over. I don't have any debt; if I did, I would pay it off. I am leaning toward buying something durable, that I will enjoy and use, and that will maintain its value. Maybe one of those "$100 laptops" (it's actually $400, and comes with one to give to a child in a developing country). Or "glass" for my camera. High-quality lenses hold their value very well, and it's something I would use and enjoy in the meantime. I might even make a little money doing so.
A bicycle can always come in handy.
I've got one, and don't really have room for another. Heck, I don't really have room for the one I've got.
I want an electric folding bike, not least because of space reasons. But I'm hoping better models will become available if I wait.
http://www.rabbittool.com/home2.html
So they're finally shipping? Man, that thing was vaporware for the longest time.
And is it really better than a regular Dahon?
As far as I was aware the folding bikes were not constrained VS the high speed motor that was geared down 13:1 was what was needing to be shipped from Japan where they were being made.
Sheesh, what a crappy website. They don't describe the features all that well.
If you really want to help the economy, save it. Savings includes paying down debt, so that would be #1. If you don't have any debt, then invest it somewhere, just not in traditional stocks. Oil trusts are somewhat depressed, because everyone has assumed that a recession means oil prices will collapse. My personal favorite would be an ETF that shorts the market. :)
If you want to help yourself, buy food that will keep for a while. Or buy a little gold or silver.
The idea of spending it to consume more is borderline obscene. We are where we are today because we've been living beyond our means. Shifting the debt burden from individuals to the government (i.e. to future generations) just perpetuates the same diseased system. We need to become savers and producers, not consumers.
I confess...I don't really want to help the economy. I think it's doomed, no matter what I do. No matter what Helicopter Ben does, even.
I'm already saving a lot more than the average American, and frankly, I expect to be screwed on that. Honestly, I think one reason we are such rabid consumers is the lesson of the '70s: buy it now, because tomorrow, it will be more expensive. And inflation will eat up your savings.
I'm half-inclined to just blow it. Take a road trip, watch some baseball. While it's still possible. It's only $600 - not enough to even get in the door of an energy mutual fund.
I'll never see any of that money because I'm poor and a veteran, not a bloated McMansion-indebted McFool.
But if I did get it I'd look into getting "junk" silver US coins, because those will do much better than US paper (not thin enough to roll cigs with and not absorbent enough to wipe your bum with) or US zinc-junc pennies.
Other possibilities I'd consider good are: Survival foods, look into what the Mormons are storing, you may not agree with 'em but they are dead serious. Ammo - learn prices and get it as cheap as you can but good quality. Or into something you can use to be productive - like a lathe, tools, etc.
And always always always buy American and buy local.
How about a Dec08 $140 crude call option? Do your part to help drive up prices and encourage energy prep - and get a fat bonus if Bush decides to bomb extra nations, etc.
I would have no idea how to buy one of those. (Can you buy just one?) Or what to do with it once I had it.
I have a financial advisor, but his vision of the future doesn't bear any resemblance to mine.
You can buy just one - though if you go through the effort to set up an account, you might wish more.
I am NOT an expert or fiscal person of any stripe, I've basically ignored money except to raise and spend large amounts of other peoples' money to get specific things done. But I spent a half-day familiarizing myself with options on the internet in the first half of last year, and researching firms and types of accounts, for the sole purpose of buying crude call options. It's absolutely a gamble, but if you think your understanding of the world is better than that of the folks taking the other side of the bet, it makes some sense.
If I can do it, anyone can. Whether anyone should is another question, but you can't lose more than what you pay for them upfront, and the world doesn't yet believe in peak oil.
ymmv.... and good luck.
I know I'm a few hours behind here Leanan, but what are your thoughts about gold/silver? And here I am talking about primarily as a store of value.
I'm no expert, so take this with a few grains of NaCl...
I am not a big fan of gold/silver. I have some. I was a coin collector in my misspent youth, and still have them. And I have jewelry, mostly given to me by my parents as gifts. Some gold, and unbelievable amounts of cheap silver jewelry bought overseas.
But I believe in diversifying, and would never put everything into precious metals. I have serious doubts about how well they would hold their value. You can't eat them. During the Great Depression, jewelry and heirlooms went for pennies on the dollar.
There's also the fact that so many people own gold these days. It's not like it was in the old days, when ordinary folk had maybe a thin gold wedding band. Everyone and their brother has huge gold rings, chunky gold chains, gold bracelets, gold earrings, gold nipple rings, you name it. Even the kids in the ghetto. Could be a lot of people selling, not that many buying.
That is why I'm leaning toward buying things I can use and enjoy. If they don't hold their value, oh well, at least I had the use of them.
An electric assist folding bike is what I want too. I've been thinking of buying a Dahon and converting it with a kit. I've had my eye out for a used Dahon MU SL. At 19 pounds, this bike is 16 pounds less than my current bicycle. The kit I have my eye on is the bionx. It weighs 14-18 pounds depending on the model, but some of that weight is in a replacement wheel. Some people have apparently already done this. Of course, the above combination is pricey (~2k), but you end up with an ebike that is lightweight.
eZee Quando Folder
http://www.electricvehiclesnw.com/main/ezeebike.htm#e-quando
How about putting it into something solar? There is always room in the attic for more insulation. Once installed it will last for the life of the home, or longer, if it is moved to another home. Or a solar water heater. Free hot water after the electric goes off is a nice bonus. Solar systems last 25 years or more. Or buy a 50cc scooter that gets 100 miles to the gallon. You will be the envy of the neighborhood at $5 a gallon. Replace all your incandescent lights with CFLs (compact fluorescent lights). Get a new energy efficient fridge. Lots of stuff we can do as individuals. And that is what it will come to. All these actions save you money, save oil, save the environment, invests in local services and, thanks to the "stimulus rebate", doesn't cost you anything. How about it? This is a lot better than buying things we don't need.
Most of your suggestions apply only to people who own their own homes and don't plan on moving anytime soon. I rent, and all things considered, I intend to keep renting. I don't want to be tied down to a house. Unfortunately, it also means upgrades like solar panels, appliances, and insulation are out.
I don't see any need for a scooter, either. I just don't drive that much. Even my electric bike musings are more for entertainment than anything. I live two miles from work. I can walk. Unless the weather's awful. In which case, I'm not going to bike or scooter, either.
As a renter I have :
installed gaskets behind switches & outets (surprisingly effective in reducing infiltration)
Caulked (with permission)
Bought my own refrigerator (landlord used old one as a spare) which I will take with me.
Installed Relectix (bubble wrap with aluminum coating) in my windows during extreme weather, I leave some up all year, some goes up & down
I am considering buying a Chinese gas tankless hot water heater (~$250) and installing it. But payback is close to 4 years, and I am unsure I will be here that long.
Bought a MacMini computer (31 watts with Airport off, 33 watts with it on). LCD screen that I reused from old PC varies slightly, between 48 and 51 watts.
Best Hopes for Energy Efficiency,
Alan
It might be more possible to work stuff like that out if you're dealing with a small operation. I live in a complex owned by a corporation in another state, and it's not possible to do stuff like that. Not to mention I would get no payback for much of it, because I don't pay for my own heat or hot water. (And I doubt they even notice how energy-efficient I am, among my hundreds of neighbors.)
I've already done what I can (energy efficient bulbs, etc.). Did it years ago.
One question you can ask is, is there anything that you buy regularly, which you might be able to make yourself / reduce the cost of with capital expenditures. To reduce the cost of food, better cooking equipment (vacuum sealer, bread machine), better storage equipment (canning shelves, pantries) and more cookbooks can help. BTW, my bread machine is still getting regular use. Alcohol? Brew it yourself. Buy the carboys, siphons etc. Entertainment--unencrypted satellite receivers or good antennas may make it less useful to have cable. DSL modems are cheaper to buy than rent. Cell phones--a pay-as-you-go plan is much cheaper than a regular plan, if you only use the phone in emergencies. Plunk the $50 or $500 down and you'll often come out ahead.
Do a cost/benefit analysis. Paying for the cell phone is probably a better long-term choice than putting money in the bank.
Don't just look at the energy-related money sinks. Anything which reduces your long-term expenses can be an investment. In terms of hours-of-entertainment-that-I-didn't-need-to-pay-extra-for, my PlayStation2 was actually a very good deal.
My bread machine is gathering dust, and has for years. I don't eat much bread these days, and I'm trying to eat even less, given recent research.
I did buy a toaster oven awhile back, not least because it's more energy-efficient.
I don't drink, don't have a cell phone, and got my DSL modem for free (in exchange for signing up for a year - which is already up).
I'm already pretty frugal. Came out of college dirt-poor with a lot of debt, so I had to be.
One thing I also consider is the cost of an item after you buy it. I am still using the 13" TV my boyfriend gave me in college. All my friends are buying huge plasma or LCD TVs. Super Bowl season is the best time to buy. I sure would like to watch nature documentaries and sports in HD, and I could afford to buy one. But they are energy hogs. Similarly, I'm thinking twice about the new FIOS they installed in our complex. Those who have signed up for it report a noticeable bump in their electric bill.
FIOS ? Unknown or unclear to me.
Alan
When you Google it, it's the first hit.
Why is this 23-mile project projected to cost $5 billion when the 22-mile Munich maglev has a budget of just €1.8B ($2.6B USD)?
The Munich Maglev budget "estimate" is just promoters BS.
Alan