Another reason that the Iraq war was a huge mistake

[WickedLou9]

We spent how much money on Iraq so far? more than 500 Billion dollars?
What happened? All that deficit spending has devalued the dollar. Our economy has tanked. INcreasing oil prices have hobbled our economy. But there is something we overlook. Where is all that money going?

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Political Perceptions : Pump Prices Hurt Americans Not Just in Pocketbook

Both presidential candidates are focusing on the economy this week, and for good reason: $4-a-gallon gasoline has Americans sliding into pocketbook shock.
But pain at the pump is only one reason energy now should be the central issue of this year’s campaign. Here’s the other, more insidious one: High oil prices are shredding America’s financial independence and producing a massive transfer of wealth from U.S. pocketbooks into the hands of suspect actors around the world, including Iran, Venezuela and Russia.
The U.S., in other words, now has an energy problem that is not only draining the bank accounts of its own citizens, but filling up the bank accounts of some who work against American interests around the globe. It’s hard to imagine an issue that more deserves campaign prominence.
To simplify the predicament, high energy prices hurt Americans in three ways. Only the first and most obvious one, the effect of high gas prices on voters’ economic health, gets much attention.
The second way high oil prices hurt is by adding to the country’s lack of economic independence. In much the same way the country has been borrowing money from China to pay for more Chinese imports, it increasingly is borrowing money from oil producers to buy more of their oil.
A new report from UniCredit Markets & Investment Banking summarizes the problem nicely: “Due to soaring oil prices, the U.S. current account deficit” — that is, the broadest measure of the nation’s trade deficit — “has doubled since 2001. This excess consumption has been financed by huge capital inflows from Emerging Asia and oil-exporting countries.”
At the same time, oil producers are joining other foreigners in buying the U.S. Treasury bonds that finance the federal government’s budget deficit. Between 2004 and 2007, the report notes, foreigners bought 80% of all newly issued Treasury bills.
The outflow of petrodollars also translates into loss of financial independence on another front. Oil-producing countries are accumulating piles of excess cash that they can use — and are using — to buy pieces of Western companies.
A new analysis by McKinsey Global Institute notes that Russia, which seems increasingly less in sync with American foreign-policy aims, has “emerged as a major global financial player” because of oil money; it had $811 billion in foreign investment assets available at the end of 2007.
But it isn’t just big Russia that has new money to invest around the globe, increasing its influence. The McKinsey report notes that the smaller exporting countries of Algeria, Iran, Libya, Nigeria and Venezuela also are gaining global financial clout.
“When oil prices were lower, these countries channeled the bulk of their oil profits into domestic spending, with little left over to invest abroad,” the report says. “But as crude prices have climbed, these five countries are emerging as significant investors in foreign markets. They accounted for nearly one-quarter of net capital outflows from oil exporters in 2007….”
Which leads to the third concern: that some of these mountains of petrodollars will in turn be used to advance anti-American political agendas. The McKinsey report summarizes the problem dryly but succinctly: “The rise of a broader range of countries with sovereign wealth funds heightens concerns about the potential noneconomic motives and political ramifications of their investments.”
It doesn’t take a lot of imagination to start seeing how the growing chunk of money in the hands of the wrong people can set back broader American interests. Iran is, at least indirectly, using some of its oil money to finance attacks on U.S. soldiers in Iraq and to build a troublesome nuclear program. Venezuela’s President Hugo Chávez is financing his Western Hemisphere crusade against American influence with petrodollars. When Russia had a dispute with Ukraine two years ago, it simply cut off natural-gas supplies to increase its political leverage.

Brad Setser, a former Treasury Department official now at the Council on Foreign Relations, points out a couple of other uncomfortable side effects of the petrodollar flow. Some unsavory regimes, he notes, can use the cushion of high oil revenues to buy off would-be internal critics and prolong their life spans.
In addition, to the extent the U.S. has to lean on oil-exporting countries in places such as the Persian Gulf for both gasoline and debt financing, it loses its leverage to push for internal changes. “It is very hard to push your creditors to be democratic,” Mr. Setser says.
To their credit, Sens. John McCain and Barack Obama are trying to raise awareness of the corrosive national-security effects of oil prices. In his recent centerpiece address on energy, Sen. McCain declared: “When we buy foreign oil, we are enriching some of our worst enemies.” As far back as last fall, Sen. Obama said in a speech that money spent on foreign oil “corrupts budding democracies and allows dictators from hostile regimes to threaten the international community.”
But the country is a long way from consensus on what to do. When the Wall Street Journal/NBC News poll asked Americans a few weeks ago what should be done to address the rise in energy prices, it found the country split down the middle between steps to increase domestic oil production and steps to conserve and develop alternative energy sources. The challenge of the campaign — and of the next president — is to start finding common ground on what is now a genuine national-security problem.

What if we had invested that 500 Billion dollars into energy independance? Would we not all be better off in every conceivable way?

[SoFlaJDM]

b.... with a b

[WickedLou9]

Originally Posted by SoFlaJDM

b.... with a b

Oops. I should change that huh? I thought 500 million sounded wrong.

[Ardentfrost]

Spending all the money acted to devalue the dollar, and while being in our current economic predicament and having energy independence is far more amenable than being in our current economic predicament and having a war no one wants, I still think overall people would rather just want to NOT be in our current economic predicament.

So while it is somewhat interesting all the stuff we COULD have done with the 600 billion bucks we've spent, I just wish we'd never spent the money at all.

[WickedLou9]

Originally Posted by Ardentfrost

Spending all the money acted to devalue the dollar, and while being in our current economic predicament and having energy independence is far more amenable than being in our current economic predicament and having a war no one wants, I still think overall people would rather just want to NOT be in our current economic predicament.

So while it is somewhat interesting all the stuff we COULD have done with the 600 billion bucks we've spent, I just wish we'd never spent the money at all.

What if you suppose that the massive investment in energy production ( be that nuclear, solar, wind, or a combination of everything) put us ahead of the curve making the us THE global leader in energy production. We would no longer need to meddle in the middle east. Russia and Iran and all of these states wouldn't have all of our money to use against us. The economic boom would potentially generate enough tax revenue to offset the spending increase. Because there was no oil shock, the financial markets stay profitable and we avoid a recession.
I know this is wishful thinking but surely investing this 500 billion in our own country would have yielded better results than investing it into Iraq.

[motivez]

Things like this make it all the more important that Democrats stop opposing technology that can help us meet our energy demands, like nuclear.

Everyone wants an electric car and plug in hybrids, but don't realize that half of our electricity is produced by coal, hardly a clean energy.

I don't think drilling is the answer because it's just giving an addict a greater supply, it's time to shift away from dirty technology and on to clean. Wind, wave, geothermal, nuclear can all cover our energy demands if we start building our infrastructure

I also read something about updating our power grids to use DC instead of AC, meaning people who decide to set up solar and wind and other things on their property would be able to sell a portion back to the grid, currently it's impossible because with AC, too much of the power would dissipate to make it useful.. with DC, that's not the case.

[Ardentfrost]

Originally Posted by WickedLou9

What if you suppose that the massive investment in energy production ( be that nuclear, solar, wind, or a combination of everything) put us ahead of the curve making the us THE global leader in energy production. We would no longer need to meddle in the middle east. Russia and Iran and all of these states wouldn't have all of our money to use against us. The economic boom would potentially generate enough tax revenue to offset the spending increase. Because there was no oil shock, the financial markets stay profitable and we avoid a recession.
I know this is wishful thinking but surely investing this 500 billion in our own country would have yielded better results than investing it into Iraq.

You're still describing a Broken Window Fallacy situation. I'm all about opening the doors to alternative energy solutions and whatnot, but after those doors are open, if we don't have the ability to make all that energy in a cost effective manner, it just won't happen and there's nothing wrong with that. I *personally* think that we could, but what I believe and what is reality doesn't have to be the same thing.

[Ardentfrost]

Originally Posted by motivez

I also read something about updating our power grids to use DC instead of AC, meaning people who decide to set up solar and wind and other things on their property would be able to sell a portion back to the grid, currently it's impossible because with AC, too much of the power would dissipate to make it useful.. with DC, that's not the case.

The only reason our shit is on AC is because of the distance between power creation and power consumption.

Anything in your house with a motor would be what prevents switching from AC to DC easily. You'd have to put an inverter on your house to turn the supplied DC power to AC.

If we did go to a DC power grid, invest in companies that produce inverters such as AIMS

[TankRizzo]

Originally Posted by motivez

I also read something about updating our power grids to use DC instead of AC, meaning people who decide to set up solar and wind and other things on their property would be able to sell a portion back to the grid, currently it's impossible because with AC, too much of the power would dissipate to make it useful.. with DC, that's not the case.

wait, what? People are already selling power back to the grid through solar and wind generators hooked up to their homes.

[Ardentfrost]

Originally Posted by TankRizzo

wait, what? People are already selling power back to the grid through solar and wind generators hooked up to their homes.

Yeah, but he's talking about a widely distributed power grid where nearly everyone does it and the energy companies don't have to generate as much power because of it.

[Stylerod]

The government wouldn't have spent that 500 billion on energy. It's a nice thought though. It does suck though that that money is now gone and we can't use it towards that. And as for Mot saying drilling is not the answer, it might not be but we still will need oil far into our future, whether we like it or not. And being able to use our own oil instead of someone elses just makes sense.

[motivez]

Originally Posted by TankRizzo

wait, what? People are already selling power back to the grid through solar and wind generators hooked up to their homes.

What Ardent said

[DosEquis]

Originally Posted by WickedLou9

What if we had invested that 500 Billion dollars into energy independance? Would we not all be better off in every conceivable way?

Could you imagine the reaction?

"Today, as president I am going to ask congress for 500 billion dollars over the next 5 years to work toward energy independence. We are going to develop cleaner more efficient ways to do things and it will be well toward completion by 2009."

People would call that guy the biggest pinko-commie bastard, wasting billions of government money. Its ok to spend it when we blow shit up. There is minimal outrage. Can't be against the war and support the troops at the same time right?

[TankRizzo]

Originally Posted by DosEquis

Could you imagine the reaction?

"Today, as president I am going to ask congress for 500 billion dollars over the next 5 years to work toward energy independence. We are going to develop cleaner more efficient ways to do things and it will be well toward completion by 2009."

People would call that guy the biggest pinko-commie bastard, wasting billions of government money. Its ok to spend it when we blow shit up. There is minimal outrage. Can't be against the war and support the troops at the same time right?

I don't think it's that far fetched given the right circumstances.

[WickedLou9]

Originally Posted by DosEquis

Could you imagine the reaction?

"Today, as president I am going to ask congress for 500 billion dollars over the next 5 years to work toward energy independence. We are going to develop cleaner more efficient ways to do things and it will be well toward completion by 2009."

People would call that guy the biggest pinko-commie bastard, wasting billions of government money. Its ok to spend it when we blow shit up. There is minimal outrage. Can't be against the war and support the troops at the same time right?

5 years ago, yeah.
If he made that same speech right now... I think there would be more support.

[DosEquis]

Originally Posted by WickedLou9

5 years ago, yeah.
If he made that same speech right now... I think there would be more support.

Well 5 years ago he would have had to say something like:

We'll get this energy thing wrapped up in a few weeks, at the tune of 60-80 billion and it should pay for itself. The automakers will greet us as liberators.

[Charles Martel]

Originally Posted by WickedLou9

Oops. I should change that huh? I thought 500 million sounded wrong.

Did you?

And let's always remember the ANNUAL GDP of this United States....it approaches 15 trillion.

That's a t in case you sounded wrong again.

Btw, always amuses me when our massive entitlements..the actual reason for most of our debt is ignored. Or when an idea floated like oh.....keeping or privitizing our social security gets introduced.....you would think the liberal 5 alarm fire is happening.

Transparent arguments, Gentlemen. Imo.

[motivez]

Originally Posted by Charles Martel

Did you?

And let's always remember the ANNUAL GDP of this United States....it approaches 15 trillion.

That's a t in case you sounded wrong again.

Btw, always amuses me when our massive entitlements..the actual reason for most of our debt is ignored. Or when an idea floated like oh.....keeping or privitizing our social security gets introduced.....you would think the liberal 5 alarm fire is happening.

Transparent arguments, Gentlemen. Imo.

You don't think the war in Iraq has contributed to our economic problems?