RocketDoc Notes for January 10, 2022 – Things that Worry Me (In Reverse Order).
#10 - Global Warming
On my list of top ten worries, Global Warming is my least worry. Mean global temperatures have been varying for millions of years. Species adapt or go extinct. I think we will adapt, but if we adapt poorly, other countries will gain an advantage. That is what I cover here.
Global Warming is real, as if you haven’t already figured that out for yourself, but the world’s leaders are lying to us when they talk about reaching zero-carbon-emissions by 2050. It is impossible to reach zero-carbon-emissions by then, because with the energy solutions available to us now, it is totally unaffordable to generate the required world yearly energy without burning fossil fuels. Look at figure 1 below that shows where Global Primary Energy Consumption has been and where it is headed based on planned powerplant developments (almost all of which are based on existing costs and budgets).
Figure 1 – Present and Projected Global Primary Energy Consumption
It would take roughly $150 T to build enough solar and wind renewable powerplants with the needed battery facilities to replace the petroleum, natural gas, and coal powerplants shown in the figure. The world doesn’t have the money and after the winter we are currently having everyone is aware of the shortcomings of renewables during inclement weather.
This means we have two choices, either invest in modern nuclear powerplants, or prepare for warmer summers, fiercer winters, and rising oceans. I could survive either option, but I would prefer the first. Unfortunately, our government doesn’t have a workable game plan for either option. They have underfunded the development of advanced (Generation IV) nuclear fission powerplants for years, funded only advanced planning for future fusion powerplants, and raised the costs for fossil fuels by increased regulations to the point where there is little private investment money available for major energy companies to invest in anything not immediately profitable. We are screwed.
China, on the other hand, has clearly seen the problem and has invested $400 B in advancing nuclear power. In contrast the recent infrastructure bill out of Congress only allocates $5.6 B for advanced reactors, $8 B for advanced hydrogen hubs in certain key districts, $10 B for demonstrating carbon capture, and $ 1 B for demonstration projects in rural areas. See why I’m so discouraged. The Chinese currently have a 200 MWe advanced rotating-bed helium-cooled fission plant online and generating power. The rotating-bed Helium-cooled design operates at much higher efficiency than conventional reactors. They also have a compact fusion reactor in test at temperatures sufficient for D-T fusion. I am not surprised by this because they have always lacked sufficient fossil fuels other than coal and it is certainly in their best interest to push advance nuclear powerplants. Therefore, unless there is a sudden breakthrough in the privately funded Fusion Powerplant developments in the USA (see RocketDoc notes for 5 Dec 2021 for in depth review), we are all going to be buying nuclear powerplants from China for the foreseeable future.
This is why I’m worried. China will most likely be the cheapest source for nuclear powerplants in the world over the next ten to fifteen years and could build up an almost unsurmountable advantage. From where I sit, we’re having a war over Global Warming and China is about to win.
I recommend that Mr. Gore, who seems to be in charge of the nation’s energy policies, to stop listening to Greta Thunberg, and take a good hard look at the big picture with respect to Global Warming. We need to have a long-term solution, which is not political, but technical. Advanced nuclear powerplants will allow us to affordably get to zero-carbon, but it would be nice if we don’t have to really depend on the Chinese to get there.
#9 - National Debt
On my list of top ten worries, paying off the National Debt is number 9 on my list. Our National Debt is huge and largely out of control, but there are some compensating factors present.
Our national debt has just passed 122% of U.S. Gross National Product (GDP) putting us in the same condition as past world leading empires such as, the Romans, the Dutch, the Spanish, and Great Britain just before they lost their leadership role. Are we different or are we about to become a past superpower? The chart that conveys this problem best is figure 2 shown on the next page. As you can see, a debt/revenue ratio that was manageable fifty years ago has become totally unmanageable over the last twenty years., and ridiculous over the last couple of years. There is simply no way that debt can be retired with current revenues. Uncontrolled printing of money has to stop.
Figure 2 – U.S. Financial Health over Last Fifty Years
What is our best response to this problem? The first thing that comes to mind is to retire the current Democratic and Republican parties and replace them with a party who understands economics and who are not bought and paid for by various industries and political entities. Our current Congress and Executive Branches are happy to spend other people’s money to garner votes in the here and now, and don’t care what happens downstream after their term is up. That’s how we got into this problem.
But I’m afraid we have let the problem run to long and there is currently a progressive faction in Congress who will oppose any movement to cut spending and balance the budget. How bad is it really going to get? Probably not as bad as you think. Let’s look at who holds our national debt to get a better idea.
Figure 3 on the following page shows who owns the outstanding $28 T in U.S. debt. The largest holder of U.S. debt is the Federal Government, especially Social Security and Medicare, who buy bonds with the taxes they collect, and hold them to pay for future expenses. The next largest holder are foreign governments, who hold bonds to balance their foreign exchange accounts. Together, they account for two-thirds of our national debt.
Figure 3 – Current and Past Holders of U.S. Debt
An accounting of the major foreign holders of out=r National Debt is shown in figure 4 below, and it pretty well matches up with our primary trading partners.
Figure 4 – Major Foreign Holders of U.S. Debt.
Most of the remainder of U.S. Debt is held by public and private institutions (State and Local Governments, Pension Funds, Insurance Companies, investment funds, etc.). The bottom line is that, even though the U.S. Government is totally unable to pay off its debt, the current holders of this debt will hold the debt, as long as the U.S. Government makes its interest payments.
I view this situation as bizarre, but understandable. In this case we are the best house in a bad neighborhood. The U.S. dollar is the world’s reserve currency, and even though it has a huge debt overhang, so does everyone else.
The situation is far from stable, which is why I worry, but we could coast along for years, until Europe, China, Japan, or Russia actually puts their house in order by growing their trade accounts and stabilizing their currency. Then our debt overhang might relegate us to a past world power.
Here are my top ten worries in order. I will cover 7 and 8 in my next blog.
1. Income Inequality
2. Public Insurrection (Facts Disbelief)
3. Failures of current education systems
4. Racism (all types)
5. Institutional response to Homelessness
6. Current Crime Wave
7. Impacts of COVID on Institutions
8. Progressive Government vs Capitalism
9. U.S. Debt Levels
10. Global Warming
Stay tuned. I think you will find this interesting.
Thanks for Reading and Stay Safe,