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Obama to Announce $2-Billion Plan to Get U.S. Cars off Gasoline

The views expressed are those of the author and are not necessarily those of Scientific American.


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President Barack Obama visiting at  Edison Electric Vehicle Technical Center in Pomona, California, 2009

President Obama visits the Edison Electric Vehicle Technical Center in Pomona, Calif., in 2009. Credit: White House/Lawrence Jackson

This afternoon, President Barack Obama will ask Congress to direct our cars, trucks and buses to a realm that doesn’t include gas stations. During a visit to Argonne National Laboratory, he will call for $2-billion energy security trust fund dedicated to research to boost automobile efficiency, enhance battery technology and expand the use of biofuels, among other clean-energy efforts. The ultimate goal: getting the country off oil.

Obama had briefly mentioned the idea of an energy security trust in his State of the Union address in January, as a means of providing a long-term, reliable stream of money to researchers. The White House has argued that energy innovation is not only good for cutting carbon emissions to tame global warming, but that it also plays an important part in growing the economy.

Ahead of his March 15 announcement, White House officials offered a preview of the plan’s details. They said that the trust fund’s $2 billion, spread over 10 years, would come from leases of offshore oil drilling. The money for the fund, which would probably be dispersed in the way that the ARPA-E program does it, would come from an increase in expected revenue generated by a more efficient permit approval process and other reforms. One official emphasized that the administration had no intention of modifying existing plans for the outer continental shelf and does not support drilling in the Artic National Wildlife Refuge.

Congress would have to approve the trust fund, and despite the ongoing sequester and other budget battles, White House officials seemed optimistic that the plan would get a bipartisan thumbs-up. The reason: the trust fund idea actually comes from a report by a coalition of business and military leaders and enjoys support from Lisa Murkowski, the ranking Republican on the Senate’s Energy and Natural Resources Committee. But whether bipartisanship also extends to the House of Representatives is another matter.

Weaning the nation off fossil fuels entirely for its transportation needs may not be practical or realistic. But the idea, as one administration official stated, is to “double down” on the opportunities for achieving a cleaner-energy future. As far as bets go, this one at least seems worthwhile.

Philip Yam About the Author: Philip Yam is the managing editor of ScientificAmerican.com. Follow on Twitter @philipyam.

The views expressed are those of the author and are not necessarily those of Scientific American.





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  1. 1. krohleder 8:44 am 03/15/2013

    This is great news for the environment, the economy and our children’s future!

    Link to this
  2. 2. Sisko 9:02 am 03/15/2013

    The proposal has no chance of being passed in the current economic environment and probably should not be. There is already more than sufficent motivation for private industry to research alternatives to fossil fuel powered vehicles. Any firm that develops such a technology will make the financial success of Apple seem insignificant by comparison.

    The US is spending 40% more than it is generating in revenue and our president is putting out proposals to widen this gap in order to appeal to his political base.
    The proposal is unnecessary, can not be shown to be of any benefit to the economy, the environment or anything else.

    Link to this
  3. 3. lamorpa 9:05 am 03/15/2013

    Vehicles are the worst place to be looking at alternative energy sources, because they have to carry the energy with them. You have the double problem of a new type of source and it has to be small, light, and have variable output. I think there are better areas to pursue.

    Link to this
  4. 4. dernickvw 9:26 am 03/15/2013

    Why would President Obama need to appeal to his political base, Sisko? The election is over.

    Also- the deficit has has been shrinking. Did you miss the whole sequester business?

    Link to this
  5. 5. PTripp 9:39 am 03/15/2013

    The government already makes more money than the oil companies do from oil. Now Obama wants to tax the oil and gas industry even more so he has more money to throw at companies like Solyndra just to name one, and artificially fund an industry that largely can’t compete on it’s own without government subsidies. We subsidize ‘green energy’. China and the EU governments’ subsidize theirs. ‘Biofuels’ are inefficient and cost at least double petroleum fuels while raising the price of food and anything transported using them. Want to shave some money off the Defense Dept. budget? Stop forcing the military to use and stockpile ‘biofuels’ with their huge price tag. It’s creating a false demand for a product that is costing $Bs.

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  6. 6. PTripp 9:42 am 03/15/2013

    @dernickvw: Pay attention.

    The deficit is not shrinking. It’s only growing 1% less. The deficit is still increasing and will be back over $1T in a few short years.

    Link to this
  7. 7. priddseren 9:56 am 03/15/2013

    What a joke, when will these left wing fools realize their so called government subsidies like this dont work. They in fact kill any change their might be for an alternative fuel or a better car. Its called capitalism, the market for alternative fuels and real feasible vehicles that reduce or eliminate the use of fossil fuels exists. Millions of people are ready to buy lacking only something to buy. The auto manufacturers are already spending billions in research on this. The energy industry as well is spending billions on a fuel. Should either succeed they will make tons of money, there is Zero reason for the governemnt to get involved.

    WHy?,politicians being the most intellectually challenged group and least trustworthy among the people have no clue on how to pick ideas to back and research. They choose based on their ridiculous agendas and quests for power. Once they choose they will keep at some bad idea long past the point it would have been given up on by a company. Wasting money and time. Take solar. 4 decades of government help and all it did was keep the industry pointless by artificially inflating prices or backing solyndras.

    Bad idea, let the industry do it, government involved means it will never happen.

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  8. 8. jbairddo 10:11 am 03/15/2013

    “As far as bets go, this one at least seems worthwhile.” Why is this the case? Because the outcome is good even if not likely to work? Land based green energy alternatives which should be comparatively easier have cost us (via the gubment) billions and we have scads of clean cheap non polluting energy to show for it (we don’t-never mind). The truth is going to Vegas and betting you can roll snake eyes 20 times in a row can have a great return, but a stupid bet. Apparently either A) Obama has no one to guide him on this or B) they are as idiotic as the editor of this mag or C) he doesn’t listen to experts.
    People trust mags like this to be realistic about such things and not cheerleaders for pie in the sky ideas which stand no chance of working. Maybe no one at the White House has heard the concept of energy density or it was too difficult to understand, but this should have been a discussion about the difficulties of this (science magazine right?) rather than how we will have more taxes going forward. of course maybe this is a distraction to take our minds off the fact pizzas and restaurant food will double in cost due to Obamacare.

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  9. 9. Sisko 10:20 am 03/15/2013

    dernickvw

    The president is working to appeal to his political base because he is hoping to improve the democratic position in the next round of Congressional elections and hopefully, in his mind change the make up of the US House.

    Imo, there are two basic visions for the future.
    1. One side believes that government should have an increasing role in society to protect its citizens from harm and this will require higher rates of taxes on the public to fund these programs. This side is avoiding any discussion of the need to balance the budget and seems to be trying to get the public used to the benefits of government funded programs so that they will be ultimately accept higher taxes and government involvement in their lives.

    2. The other side is less unified in a position but seems to generally to believe that the current budgetary inbalance is unsustainable and that a plan needs to be implemented to balance the budget. Again, Imo, this side of the argument often semms unrealistic in stating that the budgey can be balanced without the need for additional taxes.

    You seem to ignore basic economics. You seem pleased that the current deficit is down from a 40% over spend vs. a 37% over spend.

    How about we tell our political leaders to implement some plan to balance the budget in the reasonably near future? BTW- I am not a republican and I do have a masters in economics

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  10. 10. grm083 11:28 am 03/15/2013

    Sisko – politics aside, it’s mindsets like these that delay such potentially great movements. Do we have other issues on our plates? Yes. While they need to be addressed we can’t focus on one item at a time, that’s why there are numerous committees within Congress. When you focus on only one issue you end up with tunnel vision and generally don’t accomplish what you set out to do. To quote JFK: “…those who look only to the past or present are certain to miss the future”

    Yes we probably shouldn’t be squandering our money as a government. However in the eyes of a multi-trillion dollar deficit, is 2 billion really something to go bananas over? There are much better areas to focus cuts at than spending that realistically can only improve our future not as a country, but as a world.

    Yes it’s going to be rocky; no it’s not going to be perfect. But what our government is doing is absorbing some of the risk involved in laying the groundwork for something incredible. You can shoot it down immediately or you can hope; the choice is yours.

    I’m not questioning your economic savvy because you have valid points. I am however questioning your outlook.

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  11. 11. Soccerdad 11:29 am 03/15/2013

    Isn’t it great to have a community organizer allocating our scarce resources to the highest and best use? I’m sure he’s much better at it than businesses and individuals risking their own money.

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  12. 12. kynoto 12:22 pm 03/15/2013

    When did SA become overrun by the hard-Right ideologues? I’m a conservative, but can’t agree with these simplistic, black and white criticisms. Yes, there are potential adverse effects if pursued incorrectly, but there is no reason to assume that nothing good can come from this and great harm will. To the contrary, since WWII, publicly funded science in high risk, long term, and/or expensive research has often been spectacularly successful.

    Consider that we’re just now starting to see private investment in space. Are any of you prepared to argue that private funding would have openned up space over the last half century as quickly? Do you not understand that every cent spent on Mercury, Gemini, and Apollo returned dollars on the spinoff technologies alone? Care to estimate the economic contributions of satellite technologies? Then there’s the NIH and CDC, DARPA, etc.

    Would any of you be less adamant in your rejection of public science funding if the $2B were simply offered as a series of prizes for meeting specific challenges, similar to the X-prizes?

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  13. 13. Sisko 12:27 pm 03/15/2013

    grm083

    I agree that $2 billion is only a small part of a $950 billion annual deficit but it is still $2 billion so it is not insignificant. It is evidence of the lack of attention of the priority of the different risks to the US as a whole. The nation is very much risking a fundamental negative change in the overall strength of our economy if we do not address the annual budget deficit in the next few years. It you examine the demographics in the US you will see how government expenditures will have to increase greatly after about 10 years to account for our aging population. We need to address these issues now so that people will have some time to adjust to the economic realities to come.

    I might support said proposed spending if it were designated to be spent on some specific project(s) research that had a high probability to yield results that private industry was unwilling to fund due the high non-recurring investment cost. This proposal is not like that at all. Imo is would be funds poorly spent.

    We need to establish a plan to achieve a balanced budget within the next 10 to 12 years. In reality this plan must involve a combination of cuts to the growth of many entitlement programs and most discretionary spending with the exception of infrastructure. Spending on good infrastructure can actually be almost free as it can stimulate the economy to such a degree that tax revenues rise enough that the increase is almost as much as the cost of the project.

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  14. 14. geojellyroll 12:38 pm 03/15/2013

    More waste. When the cookie jatr is jammed with IOUs…more waste does even more damage …LESS money for any scientific infrastructure. Cutbacks to pure research where there is less politics but more actual results.

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  15. 15. TTLG 1:28 pm 03/15/2013

    This would be great if the money actually went to doing research on basic science and technologies that industry is not motivated to pursue due to the current glut of fossil fuels. Unfortunately, past experience says that the vast majority of the money will go to political donors under the premise of “developing” existing technologies which have already been shown to be inadequate.

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  16. 16. jerryd 2:47 pm 03/15/2013

    I see the lying lairs are out in full force.

    So why are you not railing against our protecting international oil companies for free? That costs 50% of our defence budget, No?

    Shouldn’t this massive subsidy that would cut the deficit by 40% be put in oil so those responsible pay the full cost?

    Then EV’s, RE wouldn’t need any subsidies.

    So you think corporate welfare is ok?

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  17. 17. notCreative 2:54 pm 03/15/2013

    What could go wrong? Just google search Solyndra or A123. You should let the free market dictate innovation.
    http://greencorruption.blogspot.com/2012/10/green-alert-tracking-president-obamas.html#.UUNs1xwp98H

    Link to this
  18. 18. bongobimbo 3:07 pm 03/15/2013

    Anyone who writes “left wing fools” tags himself as a True Believer–not to be believed!

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  19. 19. ronwagn 3:48 pm 03/15/2013

    Switching all large engines to CNG and LNG and some small engines to hybrids and all electrics is what needs to be done. It is really very simple. Any engine can be converted to natural gas. It is far cleaner: A 2001 study conducted by the Department of Energy’s National Renewable Energy Laboratory (NREL) found that natural gas vehicles in the United Parcel Service CNG fleet emitted 95% less particulate matter, 75% less carbon monoxide, 49% less nitrogen oxides and 7% less volatile organic compounds than their diesel-powered equivalents.

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  20. 20. PTGoodman 4:00 pm 03/15/2013

    Obama has said that, if Congress does not act to address our environmental issues, he will do so. The Supreme Court has ruled that the EPA has the right to regulate carbon emissions. This is a done deal–one way or the other.

    @PTripp You apparently don’t understand the difference between deficits and debt. Deficits have gone down from over $1.4 trillion when Bush left office in 2009 to $845 projected in FY 2013. Deficits are projected to decrease until 2017 when they will gently rise again. national debt continues to rise.

    Link to this
  21. 21. Mythusmage 4:22 pm 03/15/2013

    One word: Biocrude.

    Extracted oil keeps going up in price biocrude is going to become affordable. When it does dropping gasoline will become unnecessary.

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  22. 22. Derick D 4:50 pm 03/15/2013

    priddseren:

    When will these right-wing fools realize that their so-called market economy doesn’t work?

    The ball has been in business’ hands for years to do this, and they’re not doing it because all they care about is short-term gain. This is a long-term solution.

    If America had more than 3 business people with the foresight to invest in this, we’d HAVE viable green energy solutions by now.

    But they didn’t. Clearly, business has failed to take the initiative. And the rest of us are tired of waiting for them to take off their three-month-horizon blinders and start thinking long term.

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  23. 23. fgbouman 6:01 pm 03/15/2013

    There seems to be some disagreement about whether the deficits are growing or shrinking. Here are the numbers:
    FY 2007: $161 billion
    FY 2008: $459 billion
    FY 2009: $1,413 billion
    FY 2011: $1,300 billion
    FY 2012: $1,089 billion
    FY 2013: $901 billion
    The facts are clear – it’s shrinking.

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  24. 24. EWF.SA 6:05 pm 03/15/2013

    There are less than a dozen of the 535 representatives we have in D.C. with an engineering background, yet they make laws on its utilization. Too often politics overrides reason and logic. As China was dumping their retrograde solar cells way below cost, our congress sat on their hands until several U.S. firms with much better technology went under. China and Germany, who are neck and neck first and second in exports, are investing in renewable energy. The U.S. is now on course to be an exporter of fossil fuels and simultaneously due to nano-material research have discovered cost-effective ways to generate renewable energy for both electrical power generation and electric vehicles.

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  25. 25. fgbouman 6:12 pm 03/15/2013

    The U.S. WILL be weaned off fossil fuels, either in a planned, methodical way or in a crisis when the oil runs out. The high price of oil is making fracking economical but this has a very limited life span. By weaning ourselves from oil we will avoid a crisis and also have a valuable product (oil) to sell to others who have less foresight. Our oil companies will benefit from higher future prices for their oil while the planet will benefit from the overall reduction in CO2 output and our labor force will benefit from a raft of new, permanent jobs.
    Where’s the downside?

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  26. 26. Cramer 6:19 pm 03/15/2013

    It interesting to note when the deficit hawks get vocal.

    a. Reagan and Bush (H.W.) run up huge deficits and not a wimper from the right-wingers.

    b. Clinton enters office and the right-wing deficit hawks begin to scream.

    c. Economy improves under Clinton, deficits disappear.

    d. Bush (W.) structurally runs up deficits and not wimper from the right-wingers.

    e. Obama inherents the structural deficits and right-wingers once again begin to scream.

    f. However, right-wingers learned a lesson from the 1990s. This time they must obstruct to keep the economy down. (i.e. Bush (W.) created mostly government jobs. Only private sector jobs have been created under Obama (govmt has lost over a million jobs).)

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  27. 27. MARCHER 6:54 pm 03/15/2013

    Sisko,

    Anyone who actually has a masters in economics from a halfway decent school can tell you that “I agree that $2 billion is only a small part of a $950 billion annual deficit but it is still $2 billion so it is not insignificant,” is an absolutely absurd statement.

    In this context, $2 billion is little more than a rounding error, in audit, the materiality threshold for a public company is 5%. And your inability to understand this is just another example of your lack of critical thinking skills or grasp of complex situations.

    I am always amazed when people lay claim to expertise in areas where they clearly don’t even understand the fundamentals.

    And for the record, the deficit has consistently going down.

    Link to this
  28. 28. MARCHER 6:55 pm 03/15/2013

    Oops, should have been the deficit has been consistently going down.

    Link to this
  29. 29. brock2118 8:16 pm 03/15/2013

    Sounds like $2 billion in shakedown money for more Solyndra losers. A recent WSJ article detailed the massive amount of carbon used in the mfg of electric vehicles which will have to be sold to american consumers to meet the administrations wildly optimistic diktat on CAFE standards.

    The losers will be gasoline consumers and car buyers aka “The middle class.”

    The only good thing you can say about the arrangement is that at least the carbon will come out of the ground some time to aid future generations.

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  30. 30. dwbd 12:57 am 03/16/2013

    You guys should realize that our monetary system is A DEBT MONEY SYSTEM. If you tried to pay off our debt there would be no money, the economy would collapse. In order for our economy to expand, DEBT MUST INCREASE, that is our debt money system. So all this silly talk about reducing the deficit, paying down the phoney National Debt is ALL based on a misunderstanding of our monetary system.

    Our Debt Money System:

    youtube.com/watch?v=jqvKjsIxT_8

    All about Fractional Reserve Lending, Bill Still:

    youtube.com/watch?v=Rbq7NRnCQDM&list=UUhZRoC9b

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  31. 31. @Nancy 2:14 am 03/16/2013

    In my view,If this proposal from the strategy,It is undoubtedly benefit for our future.First,with the decrease of using gasoline,the enviroment will be more pure and clearer than now.Second ,the sourses in the nature can be used efficiently.
    So,the critical issues is how to make a good tactical and operational.
    I must say that everything would be endured a hard time,such as be opposed by other unions whose benefit be injured.

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  32. 32. Fanandala 11:39 am 03/16/2013

    Do you really want to curb fuel consumption drastically?
    Raise the price to the same levels as they are in western Europe. If that does not help nothing will. I do not know of average Europeans who own a “truck” for personal use.

    Link to this
  33. 33. geojellyroll 1:38 pm 03/16/2013

    No need to reduce fuel consumption. As a geologist I don’t see any shortage of fossil fuel energy in the coming decades. Quite the reverse.

    If I’m wrong then the market will adjust accordingly. Prices will reflect supply and demand. Alternate energy will become more efficient.

    Link to this
  34. 34. geojellyroll 1:45 pm 03/16/2013

    fg,,”By weaning ourselves from oil we will avoid a crisis and also have a valuable product (oil) to sell to others who have less foresight. Our oil companies will benefit from higher future prices for their oil while the planet will benefit from the overall reduction in CO2 output’

    Huh? the USA reducing consumption but selling oil does not reduce overall emissions. Especially not the bad ones. A gallon of gas or ton of coal burned in the USA is subject to stricter controls (and enforced) than anywhere the USA would sell it to.

    This is one issue with alternative energy. It would reduce fossil fuel prices…making fossil fuels MORE attractive in developing economies. It doesn’t mean less consumption. A hundred million vehicles in India will not be subject to any practical controls.

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  35. 35. sault 2:31 pm 03/16/2013

    People need to grasp the concept of return on investment. When we put down a dollar into something game-changing, like the Apollo program, semiconductors, the Internet or a whole host of other major innovations we enjoy today, we get many more dollars back in economic activity. On a side note, at no time in the beginning of these projects when funding was first allocated was it known whether they would be successful or not. It’s PRECISELY because of this element of risk that the private sector is wholly unequipped to undertake history-altering projects like this and a risk-tolerant government is a necessary financial backer. This is especially true when a project produces exceptional benefits for society as a whole that can’t be realistically “bottled” and sold for a profit. Clean drinking water, public education and interstate highways come to mind as examples.

    So, investing in our infrastructure, our people and our environment has shown tremendous returns in the past and makes the USA more competitive economically. If we can substantially reduce our gasoline consumption, we could keep a greater share of the nearly $400B we spend importing oil here at home all while cleaning up the air and lowering our healthcare bills.

    Or we could just let Wall St. traders and millionaires enjoy historically low taxation…a lot of good that did us in 2008, right?

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  36. 36. phalaris 3:49 pm 03/16/2013

    That’s a lot of money for a public relations exercise.

    And to prove that you can’t get a quart out of a pint pot, which the rest of us would tell Obama for an awful lot less than the 2 billion.

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  37. 37. Sisko 5:31 pm 03/16/2013

    Marcher

    Do you have any grasp on reality. US debt is NOT going down. It is increasing at a historically unprecedented rate. Now maybe somehow you are trying to incorrectly focus on the fact the the annual defict is down from over 1 trillion per year to currently slightly less than 1 trillion per year.

    What part of spending almost 40% more than we are generating in revenue do you fail to understand? In what universe is that situation remotely sustainable? The problem will only get more difficult as in 10 years the demographics will change for the worse from a expense to revenue standpoint. The problems are simple to indentify and painful to fix but pretending they do not exist as thecurrent administration has been is very bad policy. btw- I voted for Obama in 08 and am not a republican so you can drop that line of bias

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  38. 38. Sisko 5:45 pm 03/16/2013

    Sault

    Try to find out what specifically is going to be accomplished for the $2 billion. It is simply a poor use of government’s limited funds.

    Government can help with basic research into things that industry won’t often research because the payback is either to risky or excessively long term. If there are technologies that can be fielded in 10 years to replace fossil fuels for electricity and personal transportation government investment in basic research would have no impact. There are many venture captial firms that will invest in ideas that will yield profitable returns over that timescale and even longer.

    It is invalid to make a comparison to the space program. There, a specific goal was established and things were being built to achieve that goal. New technologies developed to make the achievement of that and expanded goals more easily achieved. Now if the government were to do something like building an advanced nuclear plant with $2 B itwould be a better use of funds. It would support you same stated long term goal and would actually accomplishing something.

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  39. 39. sault 7:06 pm 03/16/2013

    Sisko,

    What part of reducing gasoline consumption do you not understand? That is a clear goal, is it not? And the government is ALREADY throwing billion$$$ at nuclear plants, right? If we make a bunch of electric cars, maybe utilities will have the increasing electricity demand they need to justify more new nuclear plants, right? I mean, since refining a gallon of gasoline uses almost as much electricity as an electric car would need to go the same distance a gasoline car could with that same gallon of fuel, I doubt it, but it’s possible.

    Look, the U.S. government can sell bonds at basically the rate if inflation right now. AND, we have millions of unemployed / underemployed just waiting to do meaningful work. Why don’t we invest in education, infrastructure and anything else we need to be a more economically competitive nation now and then pay off the debt during the economic upswings? Well, I know that one of the political parties wants the economy to do as poorly as possible while they’re out of power for political reasons, so they won’t go along with it, but I digress.

    There are ZERO signs that government debt is negatively affecting the economy (except for the credit rating downgrade…from the same agencies that gave AAA rating to credit-default swaps all the way up to 2008…only because we couldn’t stop the partisan squabbling!!!) and COUNTLESS signs that the de facto Austerity policy we’re pursuing is. Austerity has failed SPECTACULARLY in Europe, so what makes you think it’ll work differently in the USA?

    So, even though you deny the successes of the Space Program, DARPANET and the Interstate Highway System, you still think the government can’t successfully lower our dependence on fossil fuels. How would you solve this problem, then?

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  40. 40. syzygyygyzys 7:22 pm 03/16/2013

    To: Sisko

    You can try to educate these folks who can’t do math or chemistry if you like. It’s probably a waste of your time. Their Dear Leader has spoken and that’s good enough for them.

    I tried to explain the Schrödinger equation to a puppy once. All he could do was chase the old guy’s cat.

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  41. 41. MARCHER 9:15 pm 03/16/2013

    @37 Sisko,

    Not only do I grasp reality, I have sufficient grasp to know when someone is trying to change the subject.

    The deficit has been going down each year, and the interest rate on our bonds is near historic lows. Your attempts to conflate deficit and debt are amateurish at best, the type of bush league tactic used by trolls who love to lay claim to academic and professional experience they clearly do not have.

    Getting back to the original argument, before you tried to change the subject, your original statement that $2 billion is significant because of the figure itself is not just wrong, but laughably, ludicrously wrong.

    It does not even constitute 5% of the budget, it is a very small expenditure that has very little impact on current spending levels and even less on long term debt. And your inability to understand this, while not surprising, is just more evidence that you love to ramble on about subjects you clearly do not understand.

    As for you new argument that US debt is not going down, I never claimed it was, so you can stop lying about that. I stated that the deficit has gone down and indisputably true statement.

    If you want to discuss serious, long term plans for the US to balance the budget from a spending standpoint alone, you are primarily talking about SS, Medicare and Military spending. Again, a rather basic fact that anyone who actually possessed a Masters in Economics should know.

    Finally, I couldn’t care less who you have voted for. Your statements on this issue, like most of your statements, are flat out absurd.

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  42. 42. syzygyygyzys 11:04 pm 03/16/2013

    I just saw that the author is managing editor of ScientificAmerican.com. I would have expected greater objectivity from someone educated in the sciences.

    The author might have provided us with examples of what alternative fuel sources might actually have potential to replace oil.

    The author even says it himself, “Weaning the nation off fossil fuels entirely for its transportation needs may not be practical or realistic.” But then he goes on to effectively say,”But hey, let’s blow the $2B anyway. What’s the worse that could happen?”

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  43. 43. RSchmidt 12:15 am 03/17/2013

    @Sisko, “BTW- I am not a republican and I do have a masters in economics” LOL! You are a tea partier with a masters in B.S. I would think that someone with a masters in Economics would have something better to do with his time than spread disinformation about climate change and other “left wing” conspiracies on the interwebs. You probably pump gas in Cowpoke Indiana and got all your science and economics wisdom from the National Inquirer. But please feel free to enlighten us about how you and your heroes Glenn Beck, Sarah Palin, Michele Bachmann and Rush Limbaugh are going to save us all from Obama and his islamo-communist army of tree-huggers.

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  44. 44. syzygyygyzys 1:55 am 03/17/2013

    There is no point in reading these comments. The same name calling trolls show up in everything related to this topic.

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  45. 45. Bremsstrahlung 7:47 am 03/17/2013

    Yes. RSchmidt can be distracting at times. Oh well, one must take the bitter with the sweet.

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  46. 46. MARCHER 11:42 am 03/17/2013

    @44,

    Given that you your first comment here reveals you to be a name calling troll; feel free to self-deport from the conversation in order to stop being part of the problem.

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  47. 47. MARCHER 11:43 am 03/17/2013

    @43,

    HA!

    Absolutely hilarious.

    Always amazes me that people like Sisko, who clearly know very little about subjects they discuss always claim to knowledge that cannot be verified.

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  48. 48. Greyed 11:52 am 03/17/2013

    Government subsidies never work. NASA has been given billions of dollars over the years and what has it given us? Satellite communications, GPS, better weather predictions, new materials like Aerogel, tele-robotics, etc…. Not to mention the whole national pride thing. Getting off gasoline will be just as big. Investing in new car batteries would also help cell phones and laptops. Upgrading the electric grid, especially to accommodate electric vehicles, is necessary just to keep up with projected demands. Bio-fuels and bio-lubricants will have unexpected cousins much like synthetic rubber created other chemicals like nylon and silly putty. The ramifications would be impossible to predict. It would be stupid and counterproductive for the US not to invest in this project.

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  49. 49. Vladimir Gorodetskiy 11:59 am 03/17/2013

    When such a fund is created, it is automatically means there are some people who are bright and smart enough to do the project selection. And this is not only about the ideas selection, it is also about supporting of business structure of this particular ventures. That is in reality hard to do. Ideas compete on the market, not only as ideas, but as the personalities, teams, management. Some of them could be promising, but not real. I would doubt any fund could change the market trends to use the most efficient fuel. The best could be to spend money on a long term programmes, such as educational programmes, science research, health care, existing energy sources modernisation. It could be too expensive to try to change the venture nature and market trends. As soon as there is price difference, the money will come. The competition on the market should be fair to benefit consumers. It should be final product competition based on equal opportunities, not because somebody was able to find the way to some cheap source of money. One more way it could be done as a loans for the banks $1 for 1$. The bank create it’s own fund with 50% from their sources and 50% from the fund. It will double the capacity. And the money finally will have to come back to the fund, so they will not be lost.

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  50. 50. Sisko 12:13 pm 03/17/2013

    Marcher

    The US government has taken advantage of the current economic environment by converting (essentially refinancing) most of our existing debt into longer term notes at lower interest rates that the US actually now owns. This has lowered the amount of our current budget that goes to servicing our current debt and made the US less vulnerable to harm when interest rates inevitably rise in the future. It also was a positive action by making the US less vulnerable from harms by other nations holding to high of a percentage of our debt and being able to manipulate interest rates. Those were aggressive and wise actions made possible because the US economy is currently so large as compared to the rest of the world and due to the perception that the US economy is fundamentally stronger right now than that of the other major nation’s economies.

    Those positive action do not mean that the current unwise actions should not be corrected. The longer term notes have not eliminated the issue but have pushed it down the road depending on when the notes mature.

    Again, the problem is that the US is currently spending just under 40% more than it is generating in revenues.

    Given the current levels of spending our budget could not be balanced unless unemployment was reduced to less than 4%. Imo, basing economic policy on sustaining a 4% unemployment rate is extremely poor policy. In very good times you get to this rate but it is historically closer to 6.5%-7% over a long term basis.

    The new debt the US continues to create every day IS a significant problem that WILL result in other nations devaluing US currency in relation to their currency and thereby creating hyper inflation if there is not a plan to correct this imbalance. Plans to balance our budget will be made by cutting many expenditures that are less than $1 billion. It will take a lot of small cuts to get there but we will only get there by being realistic and being willing to realize the fundamental facts.

    The US government does not need to invest in R&D to make cars more fuel efficient the market place will perform that function. If a car company offers vehicles that will get better gas mileage that is what consumers will purchase. There is great financial motivation to improve gas mileage and many investors trying to take advantage of this opportunity.

    Sault

    You wrote that there is zero evidence that the debt is negatively impacting the US economy but you are very wrong in your perspective. Currently it is negatively impacting the economy by making business far less willing to invest because businesses are very worrying about the long term strength of the economy. This is slowing the rate of businesses hiring new employees.

    Perhaps even more importantly on a slightly longer term basis there will come a time when the rest of the world will abandon using a US currency that is manipulated by the US Federal Reserve to try to make up for a fundamental budgetary imbalance. When confidence is lost in a countries financial system that countries currency collapses quite quickly when it finally occurs. There have been many historical examples of this occurring.

    It is really not much different from a person’s personal financial situation. If you have a lifestyle where you are spending 40% more than you are earning you may not think that is a major problem. Then suddenly you credit cards are maxed out and you can not borrow any more and you are in a situation where you have a large debt to service and you are forced to immediately adjust to having far less disposable income. Obama should present a plan to balance the budget in 10 to 12 years that will combine significant spending cuts and some tax increases.

    People who say otherwise are either ignorant, are lying, or are trying to appeal to a political constituency. Paul Ryan is doing this by claiming we can balance the budget without raising taxes. Obama is doing it by claiming that all is well and we do not need to address the problem. Both are being untruthful and imo both know it and are appealing to the ignorant in their political bases.

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  51. 51. MARCHER 12:33 pm 03/17/2013

    Sisko,

    First of all, using the historical unemployment rate as a benchmark is not a particularly good idea.

    As you have pointed out repeatedly, we have a rapidly shifting population demographic which is likely to reduce the labor force participation rate and which makes a lot of historical unemployment data over the past few decades rather misleading.

    Your claims that our long term debt outlook is not sustainable in the short or medium term is flat out none sense. We have continued to borrow at rates near historic lows without negative consequences to the US economy.

    Your insistence that this is untrue, that companies are not investing due to lack of “confidence” is utter garbage. Companies refusal to invest is due to lack of demand as a direct result of stagnating wages and high unemployment. This fantasy that companies racking in record breaking profits are simply sick with worry that the US economy is on the brink of collapse is laughable; if it had any merit whatsoever, the thoroughly failed austerity policies of many nations around the world would have resulted in an economic boom in countries that have instead found themselves with higher unemployment and worsening economic outlooks.

    As for your “free market rules” view on research, yet another example of your lack of knowledge. Sault already pointed to some of the most significant inventions of the last century coming from government research.

    The private sector is always reluctant to engage in research with a long term profitability horizon.

    Finally, a balanced budget will come through lots of big cuts to the three major government programs SS, Medicare and the Military. Claiming that a lot of small cuts can balance the budget is just another piece of propaganda from people who are either ignorant, lying or trying to appeal to a political constituency.

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  52. 52. syzygyygyzys 1:43 pm 03/17/2013

    I was just curious how many would take the bait and self-identify. Have fun everybody.

    Link to this
  53. 53. bailiff 2:25 pm 03/17/2013

    @42,

    “I just saw that the author is managing editor of ScientificAmerican.com. I would have expected greater objectivity from someone educated in the sciences.”

    Science is no longer important to Scientific American.

    Should you want evidence for this claim, please refer to the contents of the blogs hosted by ‘Scientific American’.

    Link to this
  54. 54. sault 2:44 pm 03/17/2013

    Sisko,

    Not all debt is created equal and comparing the U.S. Government’s finances to a person’s finances is a fundamentally flawed analogy, but I’ll roll with it for the sake of argument…

    Sure, charging up a bunch of credit card debt for cheap thrills and fancy items is a bad idea. But taking out student loans so that you can get a degree and eventually make a lot more money is a smart move. Financing a car so you can get to the job that will pay you more money is also a good idea. Cleaning out your bank account to buy WAY MORE guns than you’ll ever need for home defense is not a good way to go, but being secure enough in your own home and working with your neighbors to keep criminals from operating in the neighborhood is. And while taking care of grandpa and his medical bills is becoming expensive, you can’t just cut him off and tell him to fend for himself! He took care of your parents and built your house with the expectation of some comfort in his senior years. It’s not his fault that his bills are rising anyway. The hospitals and doctors he sees, the pharmaceutical companies that make his drugs, even the private insurance company that you bought a policy from to help pay the bills…all of them have been jacking up their prices WAY faster than inflation for decades so that they are more than TWICE as high as what your nearest neighbors pay.

    To complete the analogy, you then tell your boss at that nice, higher-paying job that he can cut your pay and benefits with the mistaken expectation that you’ll just work more hours to come out ahead anyway…even though you tried this in the past…TWICE…and it failed miserably each time!

    Then, when you start to rack up a bunch of debt, you somehow think you can get to a balanced budget by cutting minuscule things like getting oil changes for your car and fixing leaky pipes around the house. This is all penny-wise and pound-foolish since that car engine will eventually seize up or mold will start growing around the leaking pipes.

    What you need to do first is go to your boss and get your higher pay & benefits back like what you had in the 90′s. You made enough money back then to pay your bills and save a little too. On top of that, the company you worked for had its greatest period of growth in decades in the 90′s as opposed to the sluggish or even flat growth it has experienced in recent years, so getting a slightly higher salary for yourself didn’t really drag down the company’s growth all that much after all…Then you need to tell the doctors, hospitals, drug companies and insurance companies that they’re charging WAY too much and that you’ll be switching to the plan that one of your neighbors subscribes to that costs LESS THAN HALF of what you’re paying right now. Finally, you need to give your kids a leg up by fixing up the house, getting them everything they need to have a great education and prepare them for the future so they can take care of you when you get old and still have money of their own to live comfortably and continue to invest in the family’s future.

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  55. 55. sault 11:37 pm 03/17/2013

    BTW, Sisko…even Boehner agrees with me that the debt isn’t impacting the economy right now saying, “We do not have an immediate debt crisis…” this morning on “This Week”. So you gotta look at the people feeding you this misinformation about the debt and see whether they even know what they’re talking about!

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  56. 56. Sisko 9:23 am 03/18/2013

    Sault
    I believe that what Boehner stated is that the current US debt is not an immediate problem and that nothing catastrophic would happen in the next year or two. I would not disagree with that conclusion. Make no mistake, I am not in agreement with republicans as the republicans are being untruthful to state that we can balance the budget without raising taxes and that is simply wrong.

    What I do not seem to be explaining in a manner that you understand is that it will be a problem in the near future. The US Fed was able to essentially print money and re-finance US debt in the last few years because although the US has a terrible budget imbalance, the other major economies of the world are fundamentally currently in even worse shape than the US. This resulted in large investors (hedge funds, etc.) to find the US the best available option. The situation is not sustainable as they will devalue US currency if we keep printing money at the rate we did in 2011 and 2012.

    Using your comparison to an individual borrowing to go to school to improve their life when they are in debt is not an overly poor analysis. Let’s examine-

    Let’s suppose someone had racked up a huge debt on credit cards while they were spending 40% more than they were earning. That same person continues to spend far more than they are earning. Would you be willing to loan them even more funds if they told you that they wanted to now go to school so that they could learn and potentially get a better job and maybe earn enough more in the future that it would make up for how much they are currently spending more than they are earning AND to pay for the additional loans? It is pretty unlikely that you would make a loan to a person in those circumstances because it would seem unlikely that you would be repaid.

    The comparison to an individual is quite reasonable. If an individual is spending 40% more than they are earning they first need to align their expenses with their earnings. That would mean getting a less expensive transportation that they can afford. That would mean getting a less expensive residence that they could afford. That would mean eating less expensively, etc. etc. etc. When you spend more than you earn you must align the two. You get there by cutting what you can in a manner that hurts your long term financial position to the minimum extent possible but you HAVE TO GET REVENUE and EXPENSES ALIGNED.

    Some like to pretend that fundamental economics do not matter but ultimately the truth is that they do and it is not that complicated. The EU is a fair example. The US can either deal with the pain now or experience greater pain in the near future. In 10 years we are in deep, deep trouble based upon some people’s expectation regarding what they think our government will be able to pay for.

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  57. 57. sault 4:13 pm 03/18/2013

    Again, I’ll state that not all debt is created equal. Borrowing money to get educated and set yourself up for a better job is a very good investment, right? We should be investing in things like reducing fuel consumption that reduce our trade deficit and increase economic competitiveness. Just like with the other successful government investments I brought up previously, these projects have caused economic activity many times their original costs.

    What we SHOULDN’T be doing is cutting these investments so we can sustain MASSIVELY bloated healthcare and defense sectors…you know, the big ticket items ACTUALLY driving most of the long-term debt picture. Look, we’re still spending MORE on defense than during the Cold War, when we had a real opponent and an arms race to deal with. In addition, we pay TWICE what other industrialized countries do on healthcare and get worse results. Let Medicare bargain for drug prices (over Big Pharma’s army of lobbyists!) and get rid of our ridiculous fee-for-service model that incentivizes massive over-treatment and over-charging (over all those “non-profit” hospitals’ army of lobbyists!).

    The main problem is that too many people have gotten too rich off the current system to get it to change easily. Allowing unlimited and anonymous corporate campaign spending has made this problem even harder to tackle. But unless you engage on military spending or equitable entitlement reform, YOU’RE not serious about tackling the debt problem either. And complaining about crumbs like the plan highlighted in the article that could potentially repay themselves many times over in greater economic activity is actually counterproductive.

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  58. 58. lpc713 1:13 pm 03/19/2013

    Its entertaining to read debate about budgets and deficits, but the real issue is funding research, and how times should change so there is money for long term research. Some changes such as royalties for inventors be extended to all employees of companies they work for instead of it belonging to the companies they work for. Many of these companies are receiving grants from states and the federal government. Many universities are research arms for many industries. A lifetime royalty would allow the company to fund more research and not go back to government after gaining commercial success. There would have to be a set maximum royalty fee set so that a product could not be withheld from the world from a greedy person or company say after the 15 year mark…The government if originally involved would also get a royalty for say 50 years 1 or 2%. All the commercially productive industries that use technology were paying a fee to the government from the space program including international could fund many futuristic problems. Fighting over the 2 billion that could produce more research money than is spent is futile..Funding long term inventions and research is the real problem so that government(the taxpayers) is rewarded for its risk…

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  59. 59. syzygyygyzys 2:34 pm 03/19/2013

    Ipc713,

    For your convenience here is a link to lyrics for The Internationale.

    http://en.wikipedia.org/wiki/The_Internationale

    Here is the refrain:

    |: This is the final struggle
    Let us group together, and tomorrow
    The Internationale
    Will be the human race. :|

    But I’m sure you know it well.

    Link to this
  60. 60. syzygyygyzys 2:36 pm 03/19/2013

    The smiley came accidentally when pasted from Wikipedia.

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  61. 61. kenwa2010 7:12 pm 03/20/2013

    The reason for our present energy crisis is for scientists like us to invent new ideas for energy resources. We need to notice where energy builds up and where it combusts and where we can conserve, hopefully there is more to it. One scientist even suggests harvesting electricity from the atmosphere. All you naysayers of alternative enegies are only limiting all of our potential to make inventions and money.

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  62. 62. greenhome123 10:36 pm 03/21/2013

    I think that electric cars should have 3 or so easily removable battery packs (which are a standard size)..maybe around the size of a toolbox. Then, all gas stations could gradually be converted to charging stations for these easily swap-able battery packs. So, you drive up to a gas station in your electric car and swap out your battery packs, similar to how you swap out propane tanks. The gas stations could even have solar panels and wind turbines on site to help charge their store of battery packs.

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  63. 63. TexNation 7:50 pm 03/22/2013

    As usual Obama ignores conventional wisdom and figures out a way to waste $2 Billion dollars we don’t have. If he had a brain he would spend that $2 Billion on converting all trains and federal vehicles to NATURAL GAS. Converting is cheap it would create several million long term jobs, it would provide an enormous amount of revenue for the Government in taxes. This is a win, win situation, America has enough NG and oil to last more than 200 years. It’s also been proven that no global warming is happening, all climate change is natural and there is nothing we can do to change it. Obama is again trying to shut down jobs and ruin America. He needs to be impeached for being the idiot of all time.

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  64. 64. TexNation 8:02 pm 03/22/2013

    How anyone could still believe in what Obama and the Democrats are saying is amazing. Nothing Obama’s done has help any area needing improvement. Unemployment is ridiculously high, the deficit is out of control, the Middle East is in shambles, South America is going to Communism. America’s economy is a disaster despite there being numerous ways to turn it around almost over night but Obama refuses. Liquified Natural Gas is the best and easiest way to turn our economy around immediately. Most of the infrastrucfure is in place. The cost for converting diesel to LNG is very low, the technology is already there with new fuel injecting systems. This will work for trucks, trains and any diesel vehicle and the same can be done for gasoline. This would create over two million jobs in the production end alone. The number of jobs in manufacturing and servicing would be at least as big. By failing to do this now Obama is proving he is trying to destroy jobs, not create them. He wants our economy to collapse.

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  65. 65. Philipsonh 11:40 pm 03/22/2013

    Obviously Obama has never see the Jetsons. They had no problem at all using transportation that gave off no emissions.

    Link to this

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