December 29th, 2012

All we have to do to fix the deficit…

is create more jobs and growth.

Easy-peasy, dummyheads. Why didn’t I think of that?

So, let’s get cracking and do it!

Only question is—how?

59 Responses to “All we have to do to fix the deficit…”

  1. Dirtyjobsguy Says:

    For the first time ever the average Canadian is wealthier than the average American. The fundamentals are they developed energy in oil and cut spending.

  2. Occam's Beard Says:

    Only question is—how?

    We had our shot in November.

  3. Mr. Frank Says:

    The article ignores the difference between the deficit and the debt. Until you run surpluses you do nothing about debt.

    The article ignores what may be real structural causes for high unemployment like mechanization of agriculture, technology replacing workers, and the type of skilled workers needed by the economy. You could also say that government programs like minimum wage, extended unemployment benefits, food stamps, and rent subsidies increase unemployment.

  4. Sam L. Says:

    Kill the EPA. And OSHA. Lower tax rates. Kill Obamacare. Cancel half of the business regulations. Guarantee (a real toughy, that) no changes in any of those for 10-15 years. Also, make tort laws rational to stop frivolous suits.

  5. T Says:

    Mr Frank makes a crucial distinction.

    Creating more jobs while continuing to spend more than than a country’s revenue does not fix the problem of spending more than one is bringing in (deficit). As long as we support a congress that insists on spending more than available revenue, they will simply increase deficit spending as revenues increase.

    More jobs and higher employment contribute to minimizing the impact of the national debt (as distinct from reducing the debt itself) because they create a larger whole and the debt by contrast becomes a smaller percentage of that larger whole.

    As OB notes above, we had our chance in November. As long as the Obamacons hold power there is no hope for resolving any fiscal crisis; that is not their priority. Their concern is punishing, not encouraging success.

  6. T Says:

    Sam L. for president in 2016!

  7. Patrick Says:

    Creating jobs was my number 1 reason for voting for Romney. I don’t know if Obama has a clue about how to do it. Sam hit some good points. The EPA is really out of control and is only getting worse, and I know Obama won’t rein them in.

  8. Otiose Says:

    The primary intent of the author is to use sophistry and outright deception to encourage more spending and higher tax rates.

    Correlation is no causation. Tax rates are different from amounts actually collected.

    Income inequality – aside from very real government effects e.g. cronyism and the like – is a good thing that means there’s more highly integrated economic growth happening. In our current case it’s very misleading to focus for example on inequality within the US political boundaries when there is so much economic integration rapidly occurring across those boundaries.

    With the end of the Cold War in 1989 (a key milestone along the way) there were in excess of a billion people suddenly brought into the global economic network, more if you look at third party countries who no longer looked to the socialist block countries as a viable model.

    The effect was to trigger a rapid realignment of the capital (people included) structures of the existing global players. That meant that a lot of manufacturing left the US (and Europe and Japan and Indonesia and Mexico and etc) to migrate to lower cost places (e.g. China). The main effect was to increase the COLLECTIVE standard of living for the entire system, BUT it hurt badly for example, the peasants in China who had their lands (i.e. means to survive) systematically stolen by the rising powerful), and for example the people who formerly did those manufacturing jobs in the US.

    These economic across border adjustments occur faster than any political adjustments, and political elements especially where the pain is worst react in ways to soften the blows in the short term that had great long term cost – especially making the system more volatile as debt levels steadily rose.

    In the US that meant the Central Bank lowered interest rates to encourage borrowing to uphold falling living standards, and the politicians increased transfer payments and entitlements using borrowed money. One effect and measure of this going on was the persistent deficit the country has been running (it started before 1989). The surpluses under Clinton had nothing to do with his administration’s policies but to the fact that government spending on defense was cut creating a short honeymoon not unlike someone wasting a windfall from the lottery or an inheritance.

    What should have happened is that large segments of the US work force should have made some painful career adjustments with many suffering outright losses even as the whole benefitted. INCOME INEQUALITY during this process should increase and is a strong indicator that the overall global system is rising in complexity and specialization with large numbers of people getting relatively richer than anything seen before. Income inequality is itself not a problem needing fixing. However, that is not to say there aren’t a lot of people gaming the system who don’t need ‘fixing’ i.e. jail.

    “Belt Tightening” – also called austerity. The author does not distinguish between austerity for the government (something that would boost the economy) and austerity for the private sector (which does not). In his mind spending by the government and the private side equally boost economic growth. The author believes as did Keynes that spending creates wealth. Actually it’s only when productivity is increased that wealth is created.

    Anyway this particular Keynesian belief is at bottom why people such as the author say that we must continue spending (and taxing) in order to stimulate growth and get out of this downturn, when what we really to do is cut back government costs and spending dramatically leaving the private side the resources to deploy in ways that have a chance to reignite real growth.

  9. M J R Says:

    Dirtyjobsguy, 1:15 pm — “For the first time ever the average Canadian is wealthier than the average American.”

    Canada does not have the problem of the underclass that the USA has. They also are serious about to whom they grant entry.

    Mr. Frank, 1:23 pm — “The article ignores the difference between the deficit and the debt.”

    So many articles, speeches, interviews do. Economic illiteracy/innumeracy is epidemic.

    Patrick, 3:21 pm — “Creating jobs was my number 1 reason for voting for Romney.”

    Same here, and Supreme Court appointments were very important to me as well.

    Patrick, 3:21 pm — “I don’t know if Obama has a clue about how to do it.”

    I do know (and the answer is in the negative). The need, as a few have already pointed out, is not so much for one individual to know how to create jobs, because one individual does not create all those job; the need is to get out of the d#mn way.

    (I know that most here, including the aforementioned “few”, know that. But I thought it was worth including for emphasis.)

  10. M J R Says:

    Otiose, 3:23 pm — I appreciate your analysis.

  11. Occam's Beard Says:

    Kill the EPA. And OSHA.

    What no love hatred for the Department of Education? Surely it’s earned a place on Death Row.

    The article ignores the difference between the deficit and the debt.

    It’s amazing how few people grasp the difference between the two. It’s the difference between slope and intercept, yet most people fail to differentiate between the two. Another sore point: it seems not a person in a thousand is aware that the President does not determine the budget (“Bush spent all that money!”); that’s Congress’s job. Apparently they no longer teach civics in high school.

    Two more instances where the Department of Education failed miserably. I leave aside the woeful preparation of students for the workforce, as that is a given.

    Income inequality – aside from very real government effects e.g. cronyism and the like – is a good thing that means there’s more highly integrated economic growth happening.

    “Income inequality,” or as I like to call it, “incentive.”

  12. M J R Says:

    Patrick, 3:21 pm — “I don’t know if Obama has a clue about how to do it.”

    M J R, 3:37 pm — “I do know (and the answer is in the negative). The need, as a few have already pointed out, is not so much for one individual to know how to create jobs, because one individual does not create all those jobs; the need is to get out of the d#mn way.”

    I wish to point out that the incumbent’s overriding concern is redistribution of wealth (and punishing the successful). I do ^not^ mean that as mere rhetorical prose: I believe that it is literally the case.

    Oh, from the incumbent’s point of view, it would be peachy if there were healthy job creation — but that’s not his overriding concern. Meanwhile, he gets to maintain or increase people’s dependence on government. Win-win!

  13. Wolla Dalbo Says:

    Just a few common sense steps that no one in the current political environment will take:

    First, government must always spend less that it takes in, and this can be accomplished by very closely examining and eliminating wasteful and duplicative government departments, agencies, and programs, and reducing the government workforce, and by carefully scrutinizing the budgets of the remaining agencies and programs to eliminate any expenditures and personnel which cannot be shown–using a very strict standard—to provide a tangible benefit to the U.S. and its citizens.

    Although it is not the panacea it is always advertised as being, a fair amount of money could be squeezed out of the budget by a ruthless search for the legendary “waste, fraud and abuse,” with mandatory, rigorous prosecution and “clawbacks” of money from those caught cheating the U.S. taxpayer.

    Slash regulations and taxes on businesses and individuals.

    Special tax and other incentives for legitimate startup businesses, and for businesses that relocate to the U.S.

    Universal right to work laws and “at will” employment.

    Establishment of trade schools as an alternative to the university track, and emphasis of the trades for those not equipped for or really interested in academics.

    Encourage Community Colleges to offer a very complete array of job oriented courses.

    Reform all entitlement programs, and, in particular, cut benefits and tighten eligibility, and increase the age at which benefits begin–

    Reform unemployment compensation by limiting the number of weeks of aid, and requiring recipients to work and to attend legitimate job training classes to prepare for a new job as a condition of receiving aid. Moreover, when individuals do get a job they should be required to pay back whatever aid they received.

    Reform welfare by adding a strong work requirement; if you want something like an “Obamaphone,” you have to earn it through working at a real job, and you have to pay your cell phone bill yourself.

    Set up incentives within the welfare system to keep families intact rather than encouraging their breakup.
    All out development of all U.S. energy resources.
    Large, tax-free government prizes to encourage individuals and companies that achieve certain technological goals that would benefit the whole country.

    Institute strict enforcement of existing immigration laws to make the U.S. much less attractive for illegal aliens (Mexicans alone, the majority illegals, annually overburden our social welfare and law enforcement sectors, soaking up many dozens of billions in extra tax payer funded benefits, while at the same time siphoning $20 billion dollars or more each year out of our economy and sending it back to Mexico) but change immigration laws to give priority to skilled immigrants and/or those with the assets to support themselves, and this means drastically shortening the wait and processing time for such desirable legal immigrants who can show that they will make a positive contribution to this county.

  14. Smock Puppet, 10th Dan Snark Master Says:

    }}} Only question is—how?

    I could be wrong, but I think the best start to this would involve nuking Washington, DC, during the SOTU.

    Drastic, yes, but it would certainly move the country forward substantially for a long time…

  15. JH Says:

    So, let’s get cracking and do it!

    Only question is—how?

    Let go invade Iran!!

    Was Bush &Co done it before the financial drama folded out, so in 2003 fixed?

  16. JH Says:

    A guide to the fiscal cliff

  17. n.n Says:

    The most important and significant resolution will be to remove economic and social distortions throughout our society. This can be represented by repealing Obamacare and addressing underlying causes for progressive inflation of medical services and pharmaceuticals.

    It is dissociation of risk which causes corruption. It is dreams of instant gratification which motivates its progress.

    This is about immigrants, legal and illegal, displacing Americans, exceeding a rate of assimilation.

    This is about environmental policies, which preclude reasonable use and exploitation of natural resources, while simultaneously condoning environmental disruptions through shifting or obfuscation.

    This is about redistributive change, which is a principal means to dissociate risk for individuals.

    This is about normalizing dysfunctional behavior, especially a general devaluation of human life through the normalization of elective abortion.

    This is about denigrating individual dignity and devaluing human life to advance political, social, and economic standing.

    This is about exploiting democratic leverage to enforce policies which sponsor progressive corruption.

    This is a progressive dysfunction predicted by the civilization paradox.

  18. n.n Says:

    On a practical note: Pioneers and entrepreneurs of the world, unite! With humility and respect, give order to the labor of your fellow men and women, lest they believe that redistributive change is a virtuous policy.

  19. Mr. Frank Says:

    Developed societies have been experiencing increasing inequality for a number of decades. There are many factors and no easy answers. Jobs that pay well in modern societies require well above average intelligence, and intelligence is not evenly distributed throughout the population. Those jobs often require high level, specialized training which is not readily available to all. Semi skilled, manual jobs have either been shipped to poor countries of have been eliminated by technology.

    Beyond these structural changes are the life style changes among the poor and working class that are self defeating. Half a century ago the big difference between the poor and others was a lack of money. Poor people got married, went to church, and raised their kids to work hard and be honest. The collapse of the traditional family has taken a heavy toll among people with limited resources. Marriage is becoming limited to reasonably well off people. Unwed child births is approaching 40% in the U.S. and is over 70% among blacks. This is a major factor in poverty, children struggling in school and getting in trouble with the law.

  20. rickl Says:

    Smock Puppet, 10th Dan Snark Master Says:
    December 29th, 2012 at 5:23 pm

    I could be wrong, but I think the best start to this would involve nuking Washington, DC, during the SOTU.

    SMOD, hear our plea!

    Even a Tunguska-sized event would serve our purposes.

  21. J.J. formerly Jimmy J. Says:

    Weisenthal has got it partly right. Increasing jobs is certainly the biggest part of the solution. He offers no ideas as to how to increase jobs, so he’s just flapping his gums.

    However, the solution is two fold:
    1. Reduce government spending. That means no increases for a few years. Our leaders plan to spend 6-8% per year more each year. Why? Because that’s what they’ve been doing and they like it. It keeps getting them elected. (Or so they think.) They are spendaholics!
    2. Increase jobs by doing just the opposite of what Obama’s been doing. Ease back on the regulatory throttle, open up our vast Federal oil/gas leases, build the Keystone XL pipeline, quit attacking businesses and the successful as greedy, fix tax rates as they are (or lower them) for the forseeable future, reform our medical tort system, make individual medical insurance costs tax deductible (as they now are for all who get insurance from their employer), and any other action that encourages businesses and investors to take risks. Plus the ideas put forth by others in this comment section. It ain’t rocket science. Of course Obama and company know from nothing about economics. Except for the economics of envy and redistribution.

    As long as Obama and Harry Reid are in office there is no solution.

  22. RandomThoughts Says:

    Wolla Dalbo’s suggestions above are all quite sound and rational, and will never be followed. As long as there are pigs lined up at the government trough, there will never be significant, meaningful cuts in spending, much less any real attempt to eliminate waste and cut unnecessary government jobs.

    Meanwhile, Mr. Random Thoughts is now part of a 25% workforce reduction layoff, and me, well, I continue to be underemployed. Happy New Year to all the brainless fools who voted for a repeat of the past four years. Not that I’m bitter or anything.

  23. Artfldgr Says:

    in reference to pigs at the trough

    In 11 different U.S. states, the number of government dependents exceeds the number of private sector workers. This list of states includes some of the biggest states in the country: California, New York, Illinois, Ohio, Maine, Kentucky, South Carolina, Mississippi, Alabama, New Mexico and Hawaii. It is interesting to note that seven of those states were won by Barack Obama on election night. In California, there are 139 “takers” for every 100 private sector workers. … If you can believe it, entitlements accounted for 62 percent of all federal spending in fiscal year 2012.

  24. parker Says:

    What do the top 5 have in common?

  25. Wm Lawrence Says:

    A couple small additions to Wolla Dalbo’s list:

    All medical or social services used by an illegal immigrant should be back charged to the government of their country of origin. Forcing the US taxpayer to foot the bill lets a foreign government slough off it’s responsibilities. In essence they are collecting taxes from us.

    Levee a surcharge on all foreign transfer payments by non-citizens to cover some of our costs and make it less attractive to cross the border illegally.

  26. Wm Lawrence Says:

    I heard someone joking on the radio about paying off our debt to China by signing over Yellowstone park…

    I object! If we are forced into foreclosure the first thing to be sold puff should be Washington DC.

    I’ve always thought we would be better off if the capitol city were in a less glamorous location. In addition if it were remote without amenities and experienced periods of unpleasant weather that would cut down on some of the useless parasites who hang out around DC looking for a hand-out (no, I don’t mean panhandlers…).

    I’ve come to the conclusion the capitol should be relocated to Minot, North Dakota.

    Only half joking.

  27. rickl Says:

    Wm Lawrence Says:
    December 30th, 2012 at 12:15 am

    I heard someone joking on the radio about paying off our debt to China by signing over Yellowstone park…

    I don’t think it is a joke.

    This may be tinfoil hat territory, but I’ve been thinking for a long time that the reason why the government doesn’t “allow” Americans to develop our own g*ddamn natural resources is precisely because those resources are being held as collateral for foreign creditors.

  28. parker Says:

    We are beyond stupid and irresponsible. We, as a nation, voted no to any attempt to slowly turn this ship of fools away from a collision with a fiscal iceberg. The only way to avoid the abyss is to stop spending more than the government receives in revenue (note I did not say more than the government earns). This is not going to happen. QE to infinity and beyond, Buzz Lightyear is the way.

  29. expat Says:

    We should also look to Shakespeare’s Henry VI: “First thing we do, let’s kill all the lawyers.” How many of our ridiculous regulations are supported by industry as CYA measures to avoid class action lawsuits?

    Another suggestion: Make sure that girls learn how to cook and serve their kids sit-down family meals. Heck, maybe some of the kids’ fathers might even hang around to help raise them if they were rewarded by a real dinner every night. Let’s stop inflating the value of creativy and introduce a bit of boring regularity into the lives of families. WaPo had an article this week about school administrators wondering whether they should feed kids over the holidays. Gee, I thought food stamps were supposed to ensure that everyone has enough food. But if mom can’t peel a potato or make a bowl of oatmeal, the schools have to step in.

  30. rickl Says:

    JH Says:
    December 29th, 2012 at 5:36 pm

    A guide to the fiscal cliff

    Love their terminology: “Tax Units”. Yep, that’s what we are, as far as the government is concerned.

  31. IGotBupkis, Legally Recognized Cyberbully in ALL 57 States Says:

    License civil trial lawyers. Then vote to reduce the number of licenses available by 10% every five years until the people decide there are the right number of regular lawsuits.

  32. JH Says:

    Only question is—how?

    Cut Military wasting money……..

    7 Shocking Ways the Military Wastes Our Money

  33. SteveH Says:

    Low employment and outrageous govt spending are just a symptom of what’s wrong. The majority of voting age Americans who think there’s such a thing as a free lunch is the problem.

    You can’t resolve that in supposed grownups by creative budgeting ideas or rules.

  34. Ira Says:

    Congratulations to Neo-Neocon and all her commenters. But for the occasional anti-lawyer screeds, this writing at this blog is creative and intelligent and among the best to be read anywhere.

  35. J.J. formerly Jimmy J. Says:

    JH said, “Cut Military wasting money……..”

    The seven shocking ways the military wastes our money link was good.

    Thirty-four years ago when I retired from
    the Navy, the problem was obvious. We have four service branches (USN, USA, USAF, & USM) competing for money. Interservice rivalry has always been about money and the number of top jobs available. Combine the services into one force with four branches and you will save 25% without reducing overall combat capabilities.

    In Vietnam I worked for a time with the Air Force. Up to the Major – Lieutenant Commander ranks we worked well together. We just wanted to do a good job and do whatever it took to get the war over as soon as possible. At the levels above that rank prestige, money, glory, and, oh yes, money reduced cooperation until at the General – Admiral level, it was all about money, money, perks, advancement, and glory.

    How many realize that the Army has more airplanes and pilots than the Air Force? How many realize how difficult it is to do inter-service operations? How many realize that when joint operations are in the planning stages there will inter-service agendas in which each service tries to maximize their share of the money and glory? The friction, waste and duplication is enormous.

    I will admit that joint operations are somewhat better coordinated today than back in my day, but having separate branches all competing for money and prestige continues. Any SECDEF that tries to combine the services would have a huge fight on his hands. However, if the budget was restrained enough that it became obvious to all that the only way to maintain the same bang for the buck would be to get rid of waste, overlap, and redundancy; progress might be made. Especially if advancement became contingent on being a team player, not a perfumed prince of one branch or another.

  36. Mr. Frank Says:

    There are some good aspects to separate military services in terms of morale and fighting effectiveness. In 2011 Canada restored the terms navy, army and air force and they went back to unique uniforms. The unified command remained.

  37. JH Says:

    the problem was obvious. We have four service branches

    J.J. formerly Jimmy J.

    I think the problem not with the branches and hierarchy of the military, it’s those who creating colonies within the military or state department to gain more power and money. The question is it worth hire 150 new security agents spending $750 million (Five Millions each)?

  38. Ira Says:

    J.J. formerly Jimmy J. Says:
    December 30th, 2012 at 2:26 pm

    “How many realize that the Army has more airplanes and pilots than the Air Force?”

    JJ, are you sure. The numbers reported at
    seem to differ with your conclusion, unless you are including helicopters and drones.

  39. Occam's Beard Says:

    J.J. formerly Jimmy J. Says:
    December 30th, 2012 at 2:26 pm

    My father (USMC) used to complain about the difficulty of getting close air support for infantry from the Air Force, which was much more interested in the more glamorous strategic than prosaic tactical use of air power, and cited that as one reason the Marine Corps wanted their own aviators.

  40. Occam's Beard Says:

    I think there’s a case to be made for having four services; it’s a kind of martial analogue of federalism. For areas where procurement conceivably overlaps, we get more than one shot at getting something right.

    Of course, we also get more than one shot at getting something wrong, but that’s pretty much baked into the cake.

  41. Occam's Beard Says:

    Sorry, PPS.

    The bottom line, however, is cutting the deficit and the debt come down to one thing: cutting entitlement spending, which as Artfldgr points out, is pushing two-thirds of expenditures.

    And while there doubtless is waste in defense spending, how much more waste must there be in entitlement spending, which outstrips defense by what, about six to one?

  42. Sam Random Says:

    How long before the Union breaks up, I wonder?

  43. neo-neocon Says:

    Ira: I assume when you speak of anti-lawyer screeds, you’re talking about commenters. I don’t think I’ve ever been one for anti-lawyer screeds.

  44. Occam's Beard Says:

    I don’t think I’ve ever been one for anti-lawyer screeds.

    Work on it.

  45. J.J. formerly Jimmy J. Says:

    Ira@6:36pm: I was including helicopters and drones.

    The Marines also have a formidable number of helicopters, transport, and supply aircraft that conceivably could be provided by the Air Force, but under the present regimen cannot be because of the issue OB’s father pointed out. The various branches do not play well together.

  46. expat Says:

    I am not against all lawyers, but we certainly could rein in some of the class action types. There is something definitely wrong when a sleazebag like John Edwards is seriously considered as a national politician.

  47. thomass Says:

    Not sure the US is a safe place to invest in at this point… all things considered.

  48. Gary Rosen Says:

    “Not sure the US is a safe place to invest in at this point… all things considered.”

    It’s comparative. As screwed up as we are, most of the rest of the world is even more screwed up. Europe is being dragged down by the PIIGS, the Third World is still the Third World, and authoritarian regimes like China and Russia are not really attractive to a lot of investors. So the US still attracts a lot of global investment, propping us up, it’s like the old saying “democracy is the worst form of government except for all the others”. But that doesn’t mean we won’t eventually blow it if we don’t get our fiscal/financial house in order.

  49. parker Says:

    We (the fools in DC and in far too many state houses) are not going to get our fiscal house in order. Its time, if you have not already done so, to get your own fiscal house in order, the devil shall take the hindmost. After the crash we shall see what we shall see, and choose as individuals and communities how we respond. Family and friends are the shoulders we stand upon.

  50. Ira Says:

    neo-neocon Says:
    December 30th, 2012 at 9:54 pm
    Ira: I assume when you speak of anti-lawyer screeds, you’re talking about commenters. I don’t think I’ve ever been one for anti-lawyer screeds.

    Occam’s Beard Says:
    December 30th, 2012 at 10:35 pm
    I don’t think I’ve ever been one for anti-lawyer screeds.

    Work on it.

    Yes, I was referring to commenters, and obviously not to all commenters as I wrote (emphasis added), “But for the occasional anti-lawyer screeds . . . .”

    expat Says:
    December 31st, 2012 at 12:00 am
    I am not against all lawyers, but we certainly could rein in some of the class action types. There is something definitely wrong when a sleazebag like John Edwards is seriously considered as a national politician.

    I believe the real problem with some of those cases had been the judges’ letting evidence get to juries that actually did not point to the conclusions for which the evidence was offered.

  51. Occam's Beard Says:

    I believe the real problem with some of those cases had been the judges’ letting evidence get to juries that actually did not point to the conclusions for which the evidence was offered.

    I think the Ur-problem is, once again, the collective stupidity of the populace, from which all too often the most stupid are drawn to form the juries.

  52. Clayton Bigsby Says:

    As mentioned earlier, take FULL advantage of our oil and gas resources. The naive decisions to curtail new refining capacity has us hamstrung, but in time we can tell OPEC to F off.

    Think about what would happen with gasoline back to $ 1.50 a gallon? But that’s minimal compared to the impact on chemicals, plastics, pharmaceuticals,etc.

    We’re stuck with HIM for 4 more years so let’s stop pissin and moaning fix what we can….and hope our Supreme Court
    Justices stay healthy…..

  53. Clayton Bigsby Says:

    Also, forgot to mention, that just as the “Iron Horse” (more generally steam and reciprocating engines) greatly reduced the need for horses, “artificial intelligence”,robotics, and associated technologies have eliminated the need for humans and consequently their vocations.

    How we get around this inevitability aside from declining birthrates is a relatively recent problem that we are still learning how to solve…if it is solvable at all.

    Which in a round about way leads us to alternative means to acquire capital to survive, which ultimately leads us to government “entitlement programs” and tort reform, for starters….. and of course the time honored tradition of crime.

  54. blert Says:


    Refineries are NOT our fundamental bottleneck.

    Lost to the MSM, and hence the general public, oil refineries are perpetually expanding in through-put capacity all the time. This is why there has been no real pressure to build a ‘greenfield’ plant in decades.

    This increase in capacity is due to better catalysts, better processes and additional pre-processing ‘trains’ which are tucked into the same ‘foot-print’ as the original refinery.

    [ Most of the land committed to a refinery is used to create a fire break and explosion buffer. This is typically miles across. You can see the voids from Google Earth. The empty land surrounding refineries is owned by the processor itself.]

    The other global trend is for OPEC nations to pre-process their own heavy sour crudes within world scale facilities. This is driven by the economics of scale. Absolutely no-one can compete with the advantages of large scale processing trains — particularly with heavy, sour crude.

    Thus, KSA is building a 400,000 bbl/ day facility at Yanbu — on the Red Sea — which will transmute the nasty crude into heavy oils and light products. The heavy stuff can be sold to small markets like Ireland — which can’t ever justify a world scale refinery even if the whole island consumed its production.

    The KSA project was started as an American-Arabian deal. Then, because of fracking economics, the Americans dropped out. Red China stepped up. This new refinery is expected to fire up in less than one year.

    Eventually, KSA is going to have to pre-process almost all of its heavy, sour grades. It’s an economic imperative.


    In other shocking news: Kenya has discovered the other end of the Permian oil deposit of KSA an Gulf fame — off its coast.

    In less than a decade, Kenya figures to be a heavy weight oil exporter.

    Yes, it’s light, sweet crude. Even the very first test well is a gusher.

    The implication is that the deposit lies off of Somalia, too.

    Imagine that.

  55. thomass Says:

    Gary R,
    We actually have more problems than say Greece. We are not one ethnic group, Mexican citizens ‘feel’ like they have valid territory claims to parts of the US, There is also the issue of the US being the left’s boogie man. Some want to take the country down since we are so dangerous…..

  56. Clayton Bigsby Says:


    Thanks for all that info. I’m trying to process it all…as i’m not in the business. Are you saying that our current refining capacity is adequate to handle the projected volume of our shale oil endeavors?

    Would we not benefit from or even need a world scale facility here as we’re not dealing with crude oil with shales?

    If we are bound and determined to be energy self-sufficient does it matter that Africa has entered the game, if our goal is not primarily to be an exporter?

  57. siri Says:

    Only question is—how?

    Easy, Just as Bush did in his 2nd term, create new WAR……..a New Regime Change

  58. siri Says:

    Looking to how dramatically the effective tax rate has come down in US over the years for the top earners These People, make you wonder if this have some elements of drowning US economy?

  59. siri Says:

    blert Says:In other shocking news: Kenya has discovered


    This discovery will take five to 10 years for the oil find to benefit Kenyans and the world.

    So from now till that time what you thinking how US improve her economy with China alligator?

About Me

Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.

Monthly Archives


Ace (bold)
AmericanDigest (writer’s digest)
AmericanThinker (thought full)
Anchoress (first things first)
AnnAlthouse (more than law)
AtlasShrugs (fearless)
AugeanStables (historian’s task)
Baldilocks (outspoken)
Barcepundit (theBrainInSpain)
Beldar (Texas lawman)
BelmontClub (deep thoughts)
Betsy’sPage (teach)
Bookworm (writingReader)
Breitbart (big)
ChicagoBoyz (boyz will be)
Contentions (CommentaryBlog)
DanielInVenezuela (against tyranny)
DeanEsmay (conservative liberal)
Donklephant (political chimera)
Dr.Helen (rights of man)
Dr.Sanity (thinking shrink)
DreamsToLightening (Asher)
EdDriscoll (market liberal)
Fausta’sBlog (opinionated)
GayPatriot (self-explanatory)
HadEnoughTherapy? (yep)
HotAir (a roomful)
InFromTheCold (once a spook)
InstaPundit (the hub)
JawaReport (the doctor is Rusty)
LegalInsurrection (law prof)
RedState (conservative)
Maggie’sFarm (centrist commune)
MelaniePhillips (formidable)
MerylYourish (centrist)
MichaelTotten (globetrotter)
MichaelYon (War Zones)
Michelle Malkin (clarion pen)
Michelle Obama's Mirror (reflections)
MudvilleGazette (milblog central)
NoPasaran! (behind French facade)
NormanGeras (principled leftist)
OneCosmos (Gagdad Bob’s blog)
PJMedia (comprehensive)
PointOfNoReturn (Jewish refugees)
Powerline (foursight)
ProteinWisdom (wiseguy)
QandO (neolibertarian)
RachelLucas (in Italy)
RogerL.Simon (PJ guy)
SecondDraft (be the judge)
SeekerBlog (inquiring minds)
SisterToldjah (she said)
Sisu (commentary plus cats)
Spengler (Goldman)
TheDoctorIsIn (indeed)
Tigerhawk (eclectic talk)
VictorDavisHanson (prof)
Vodkapundit (drinker-thinker)
Volokh (lawblog)
Zombie (alive)

Regent Badge