Global Reset

As we are in the heart of the holiday season, people start to think about the new year and the potential it could bring. This blog tends to be technical ideals for the layperson, but this post is on a something that influences everyone, the economy. My wishes may seem demented initially. Think it through, they make rational sense. My wish is for our economic institutions to face their bankrupt reality and begin defaulting on their debt. This will force leaders everywhere to make decisions that are significant and lasting.

We are in economic trouble because of excessive debt levels at all levels of society. The main debt sources are mortgages, credit card debt and auto loans. Compounding this fact is in the US (all Western societies) we no longer manufacture many items. In essence, we consume more than we produce. Since the initial stages of the crisis appearing in July 2007 (two Bear Sterns MBS hedge funds collapsed), almost all policy has been kick-the-can-down-the-road type ignoring reality. The US federal government backed by the Federal Reserve and the banking industry backed our financial industry in the depths of the 2008-2009 financial crisis. The result was more debt was accumulated on the books of government agencies. US federal government debt stands at $13.8 trillion or ~90% GDP and is quickly rising. Our deficits are unsustainable and will make this debt burden impossible to pay in the next few years. If this was a US problem alone, rest of the world would continue on while we solve our problems. Unfortunately, this is a world wide problem with Europe and Japan in even worst conditions. There is more debt than the ability to pay, thus, it will not be paid. I predict by the next presidential election, much of the debt will be defaulted upon.

The defaulted debt will cause a Great Reset. If our leaders want a society worth living in, they will be forced to make hard decisions about a variety of topics including economics, government spending and social order. Why do I want this to occur? As the way thing are, the debt load is consuming available capital into useless support of an over sized financial industry along with other less productive pursuits like the war-machine and etc. Good portions of this capital could be put to more productive uses like dealing with replacing declining Crude Oil stocks are our main transportation source. Many other good social/economic forces could also be financed. One positive result would lead to the eventual reduction in unemployment since more people would be allowed to work. The other reason is it could bring about the next big thing in technology. The way it is now, future technologies are not emerging due to a lack of will from funding sources. I would like to join the next big thing, but it requires funding and societal support.

This is my wish. It would result in a beautiful renewal or rebirth. Happy holidays everyone!

Spenditis the Disease

Today folks, I am going to talk about a disease that seems to permeate our society, Spenditis. You may ask what is Spenditis? To put it simply as spending every penny one makes plus future earnings through taking on mountains of unnecessary debt. It amazes me how many people I know buy an over sized (too expensive) house, several luxury vehicles, have several maxed out credit cards and a student loan (or loans if married) to boot. Folks, you are never going to pay this back. The problems will begin when economic trouble hits, i.e. job loss, sudden illness. At that point, you fall behind on payments and it will all vanish in a heartbeat.

I am not arguing against buying things that pertain to hobbies, travel or other nice items as long as it is within your economic means. We have our interests and that is one thing employment supports. Our interests should not enslave us though.

What is the cause of Spenditis? I am not sure. Things that contribute to this misdiagnosed malady are feelings of entitlement, narcissism, keeping up with the Joneses and our consumer culture. Personally, one factor that contributes heavily to those want-to-be high rollers is the inability to distinguish between a want and a need. Needs are the basics like food, clothing, shelter, medical care and other society factors like education. In most cases, if an item is a luxury purchase it fits into a want. The best want example is Imelda Marcos' 2700 pairs of shoes. For the 99 % of people who are not extraordinarily wealthy, this would bankrupt them. To her, being president of the Philippines, the want did not permanently damage her economic standing.

Please avoid Spenditis. You will appreciate it when the hard times come, and they will come. The best analogy is The Ant and Grasshopper fable from ancient times.

Next generation space flight takes orbit

I made a previous post on the topic about how dangerous the retiring Space Shuttle is to those who fly the craft. In that same post I mention about the military's potential future workhorse, the X-37, an unmanned orbiter that is launched by a traditional rocket and lands through gliding back in the Earth's atmosphere touching down on a runway just like the space shuttle. If I am correct, this is the idea behind the original Space Shuttle back in the 1970's before NASA's bureaucracy took over and made it the expensive, dangerous, manned orbiter. Good ideas are generally recycled in history, and this is another example.

The Associated Press reports that the X-37 recently took a flight starting in April 2010,

The U.S. Air Force's secrecy-shrouded X-37B unmanned spaceplane returned to Earth early Friday after more than seven months in orbit on a classified mission, officials said.

The winged craft autonomously landed at Vandenberg Air Force Base on the California coast 130 miles northwest of Los Angeles, base spokesman Jeremy Eggers said.

"It's very exciting," Eggers said of the 1:16 a.m. PST landing.

The X-37B was launched by an Atlas 5 rocket from Cape Canaveral, Fla., on April 22, 2010, with a maximum mission duration of 270 days.

That is what makes this technology advantageous over the shuttle and traditional rockets. It is launched cheaply (like a rocket), but has the capability of the shuttle in flexibility while in orbit. No need to worry about anyone getting injured or killed during operation either. The X-37 excels in the fact it can remain in orbit for long periods of time. This is a capability neither the rocket or shuttle possess.

Research and development of the system has not been cheap or quick,

The voyage culminated the project's long and expensive journey from NASA to the Pentagon's research and development arm and then on to the secretive Air Force Rapid Capabilities Office. Hundreds of millions of dollars have been spent on the X-37 program, but the current total hasn't been released.

Compare the hundreds of millions of dollars spent on the X-37 to the $500 million per Space Shuttle launch, it justifies the capital spent. To be fair, anything hi-tech, new and revolutionary like this craft will be expensive to get from idea to final, successful product. Personally, this is a concept many business and government leaders are missing by not funding significant research and development in our society today.