The Need To Learn From Mistakes Made By Other Countries

Investor’s Business Daily posted an article today stating that the Netherlands is changing the rules of its welfare state.

The article states:

The Netherlands has been known for its generous welfare system. Three decades ago, when the U.S. was spending about 22% of its GDP on entitlement programs, the Dutch were spending more than 40%. The Financial Times named the Dutch system a “comprehensive egalitarian social model” built in the 1960s and 1970s.

…Three months ago, newly coronated Dutch King Willem-Alexander told his country that the “classic welfare state of the second half of the 20th century” was over. It would be replaced by a “participation society” because the “arrangements” the nation was operating under “are unsustainable in their current form.”

Among the changes is a requirement that welfare applicants must prove they have actively looked for a job for at least four weeks before they can receive benefits.

“And once they begin to receive benefits they will either have to work or perform volunteer community service,” says the Cato Institute‘s Michael Tanner.

Other savings will be found when youth services, care for the elderly and job retraining are kicked down to the local level, which is better equipped to be more efficient with other people’s money.

The Dutch have learned that those who work cannot support those who do not work indefinitely. Eventually those who work get very tired and decide to join the non-workers. If we do not learn the lesson the Dutch have learned, we can also expect to have to make drastic changes in the near future.

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How To Make Things Look Better When They Aren’t

Yesterday the Financial Times posted an article explaining that Brent Moulton, who manages the Bureau of Economic Analysis, has told the Financial Times that in July, government statistics will be updated to include such things as royalties and spending on research and development. Including those things will increase the size of the United States economy by 3 percent–making it appear that the economy has grown.

The article states:

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.

This move represents a new international standard for Gross Domestic Product accounting. Considering the state of the world’s finances in general, I can’t help but wonder if this is simply a step into denial of the fiscal collapse that surrounds us at the present moment.

There is one aspect of the changes being made that I think is positive. The article reports that deficits in pension plans will also have to be included–what is promised will be measured as well as what is paid. These unfunded liabilities are something that federal, state, and local governments have kept below the radar for years–it will be good to see them brought out into the open.

The changes coming in July move us closer to worldwide accounting practices. I have very mixed emotions about that. The changes in July will also lull the low-information voters in America into believing the economy is growing at at least 3 percent. Believing that should be a stretch for anyone.

Please follow the link above to read the entire article. It is an interesting read.

 

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Why We Need The Keystone Pipeline

The Financial Times reported yesterday that American increased the amount of oil it imported from the Middle East last year.

The article reports that by the end of November the U. S. had already imported 450m barrels of crude oil from Saudi Arabia, more than we imported in 2009, 2010, or 2011. This is the first time since 2003 that Saudi Arabia has accounted for more than 15 percent of America’s oil imports. The Gulf region accounted for more than 25 percent–a nine-year high. This is happening at the same time that demand for crude oil has declined slightly since 2004 due to increased efficiency, an economic slowdown, and the increased use of natural gas.

This is foolish on the part of America. Because of our dependence on Middle-Eastern oil, we are forced to make political and foreign policy decisions that are not in our best interest. Whether we choose to acknowledge it or not, there is currently a clash of civilizations between western freedom and Islamic nations and radicals that do not support freedom. We are supporting these radicals with our oil purchases. If you look at the changes in the United Nations over the past thirty years, you will find that the new empowerment of Islamic groups was financed by Americans buying oil. The anti-Semitism that has ruled the United Nations in recent years is funded by Americans buying Middle East oil. Saudi Arabia, who is an awkward ally at best, is one of the major financial backers of terrorism and extreme Islam around the world, and we keep giving them oil money.

It is time for America to declare its energy independence. That does not mean wind and solar–so far they do not work. We live in a carbon-based world economy. We might as well acknowledge this and get on with life. The Keystone Pipeline would be a positive step in that direction.

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Leading The Way In Spite Of Washington

It doesn’t take a genius to predict that the Obama Administration will shut down fracking (hydraulic fracturing) on government land and attempt to shut down fracking on private land sometime in the next few months. However, in the meantime the increase in fracking in the United States has had unexpected consequences around the world.

Yesterday the Washington Times reported that other countries are attempting to copy the process of fracking to produce shale gas.

The article reports:

…More than 100 exploration concessions to more than two dozen companies have been awarded, and the Polish State Geological Institute estimates that the country’s shale gas deposits may secure domestic production for at least 25 years. Britain has lifted a moratorium on fracking that was imposed after a previous operation was blamed for sparking an earth tremor.

Argentina, the largest producer of natural gas in South America, is eyeing the practice on a significant scale to better exploit its supply.

Needless to say, the environmentalists do not approve. Think about that for a minute. Fracking provides a path to energy independence for a number of nations around the world. It reduces worldwide dependence on Arab oil and the funding of terrorism. There is no proof that fracking harms the environment; in fact, studies so far have shown that it does not. Cheaper energy provides prosperity for more people and freedom for more people. Why would the environmentalists object to that? Maybe it’s time to examine the agenda behind their agenda.

The article concludes:

Some already are warning that Europe may miss out on a global energy revolution if the green forces on the Continent prevail.

“Some European countries already made the decision not to go into shale gas, so naturally when they do that there will not be development,” Mohamed al-Mady, chief executive of Saudi petrochemical giant Sabic, told the Financial Times newspaper. “I think the trend you will see [is] more investors going to North America, China and the Middle East.”

As in the U.S., Mr. Medlock said, it comes down to “political geography” more than anything else. A ban on fracking in Vermont was relatively easy to achieve because the state is thought to have little in the way of recoverable natural gas.

The same holds true in a country such as France, Mr. Medlock said. For Poland and others, where fracking likely will lead to tangible energy benefits, critics will continue to have a tougher time mounting serious opposition.

This is going to be an interesting fight between those who want freedom and prosperity wherever possible and those who want only control of the population.

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The Saudis Bring Reason To OPEC

The Organization of Petroleum Exporting Countries (OPEC) is meeting this week. The Financial Times reminds us that oil prices have dropped from $128 a barrel in March to a current price of about $100. The drop is partially due to the financial difficulties in the European Union and the general slowdown in the world’s economy. Normally when the price of oil drops, OPEC calls for a decrease in production so that the price will rise again (supply and demand works!).

Recently OPEC has been producing more oil than its quota in an effort to lessen the impact of the oil sanctions that Europe and America have placed on Iran in an attempt to end Iran’s nuclear program. Saudi Arabia seems to be responsible for the increase–Ali Naimi, Saudi Arabia’s oil minister, told the Financial Times in March that he would like to see lower oil prices  “that will not hurt the global economic recovery”.

The Saudis have called for higher oil output levels despite the lower prices. I would love to be a fly on the wall (one who understood whatever language is spoken) at the coming OPEC meeting!

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Saudi Arabia Has Closed Its Embassy In Cairo

Yesterday’s Financial Times reported that Saudi Arabia has closed its embassy in Cairo after protests by Egyptian activists at the embassy. The protesters are protesting the arrest of Ahmed al-Gizawy, who was arrested when he arrived in Saudi Arabia for a pilgrimage to Mecca and Medina. The Saudis have accused Mr. al-Gizawy of smuggling Xanax (which is an illegal substance in Saudi Arabia) into the country.

The article further reports that the protesters believe that Mr. al-Gizawy is being held because of a court case he brought in Cairo over the illegal detention of Egyptians in Saudi Arabia. The Egyptians have been held without trial. Mr. al-Gizawy had been tried and sentenced in absentia in a Saudi court, but was not told that in advance of his trip.

Before the fall of Mubarak, the government of Egypt would not have allowed protests against the Saudis. One reason I find this interesting is that I believe that the rulers of Saudi Arabia are the next target of the Muslim Brotherhood in the ‘Arab Spring.’ They are the major non-democracy still standing in the Middle East. Despite the fact that Saudi Arabia practices Sharia Law, it is under the control of the Saudi royal family–not the Muslim Brotherhood.

Make no mistake, the Muslim Brotherhood supports a world-wide caliphate–but only one which they control.

 
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