The price of electricity in Germany and renewable energy as manipulated by Physics World

According to Physics World on 27 March 2019, a publication of the Institute of Physics, 

between 2008 and 2015 renewable energy deployment “caused an electricity market price reduction of 24% in Germany and of 35% in Sweden”.

Yet, according to Clean Energy Wire:

We see that the average cost of electricity for a German household using 3,500 kWh/year of electricity from 2006 to 2019 went up 55.3%.  From 2008 to 2015, it went up 32.6%, which is a far cry from falling by 24% as stated by Physics World.  The only major component of the household cost that fell from 2008 to 2018 was the Aquisition/sales component and it fell by only 2.4%, not 24%.

The case for "renewable energy" even from the Institute for Physics and Physics World is much akin to the magician's use of misdirection.  There no doubt is some way to parse out energy costs that allows one to claim that an electricity market price reduction of 24% occurred in Germany between 2008 and 2015, but this is highly irrelevant to the consumer who has to pay for electricity.

Note in the graph above that the grid fee has gone up, which is exactly what one expects when one has to collect energy from many small sources such as wind generation and solar panels tend to be.  The value added tax went up, no doubt in part so the German government could use a part of that tax money to enforce a transition away from hydrocarbon fuels, pay for its own higher operational costs due to its higher electricity costs, and to pay for its extensive propaganda about how catastrophic man-made global warming justified forcing the nation to use more expensive and unreliable wind and solar power.

Note that the Renewables surcharge went up from 2008 to 2015 by 532%!  What was the purpose of that fee?  Why its purpose was to subsidize wind and solar power generation.  Why is there a need to subsidize renewable power generation if the cost of electricity is falling as Physics World claims it is?  The answer seems clearly to be that they are quoting a cost that has the subsidy paid out by the Renewables surcharge built into it.

So, let us just focus on the sum of the Acquisition/sales cost and the Renewables surcharge cost from 2008 to 2015 to get a more realistic understanding of the effects of the governmental push for renewable energy on the German consumer.  The sum of these costs in 2008 was 8.38 Euro cents per kWh/yr.  In 2015, the cost was 13.22 Euro cents.  From 2008 to 2015, the cost to the consumer went up by 57.8%, which is a very different story from going down by 24%.  From 2006 to 2019, this measure of the cost of the electricity went up by 227%.

No fear that the Physics World magician will saw the case for renewable energy in two.  Physics World will not spill any of its blood, no matter what measures of reader misdirection are required.  Note that it is most curious that an article published in 2019 terminated its cost claim with data from 2015.  But that is itself a small act of misdirection compared to ignoring such costs increases as the Renewables surcharge or the increased grid costs, which I am sure are among the added costs that make wind and solar possible at all on the grid.

I sure do hate to see the dishonesty of such institutions as the American Institute of Physics and the Institute of Physics, based in the United Kingdom on all matters pertaining to catastrophic man-made global warming.  The major institutions of physics have become sorry prostitutes, with far less necessity to justify their behavior than most prostitutes probably have.  There is no heart of gold there.  You only have to look at what they are perfectly happy to do to the German household consumer and how they want to extend that to everyone else in the world.

Who can you trust?  Not the major scientific institutions.  Real evil resides in the Institute of Physics, as it also does in the American Institute of Physics and many another professional scientific organization.  

Changes in the Relative GDPs of the G20 Nations over the Last 25 Years

The American Enterprise Institute has an interesting graphic on the relative GDPs of the G20 nations over the last 25 years.  Who's GDPs increased as a relative percentage of the total GDPs of the G20 nations and who's fell over that time?

Note that the European Union as a whole has a membership in G20, but not being a nation is excluded from the chart above.

What I am interested in is the change in the relative percentage of the GDP of the G20 nations over the past 25 years.  Let us look at the fraction of the 2018 percentage divided by the 1992 percentage beginning with the nations that had the highest percentages 25 years ago:

USA, 30.90/31.96 = 0.9668
Japan, 7.77/19.11 =  0.4066
Germany, 5.86/10.38 = 0.5645
France, 4.12/6.85 = 0.6015
Italy, 3.08/6.43 = 0.4790
United Kingdom, 4.18/5.77 = 0.7244
Canada, 2.63/2.90 = 0.9069
Russia, 2.51/2.25 = 1.1156
China, 19.50/2.09 = 9.3301
Brazil, 3.28/1.96 = 1.6735
Mexico, 1.83/1.78 = 1.0281
South Korea, 2.44/1.71 = 1.4269
Australia, 2.11/1.59 = 1.3270
India, 4.14/1.39 = 2.9784
Argentina, 1.02/1.12 = 0.9107
Turkey, 1.36/0.77 = 1.7662
Saudi Arabia, 1.09/0.67 = 1.6269
South Africa, 0.56/0.66 = 0.8485
Indonesia, 1.62/0.63 = 2.5714

If an underdeveloped nation is not determined to shoot itself in the foot, it can commonly make easy gains on its share of the world's GDP over time.  Similarly, the lesser developed nations of the G20 could easily have done so over the last 25 years.  Some of them have, the most remarkable one being China.  India has had the second greatest GDP surge among the G20 nations.  Third place belongs to Indonesia.  Turkey, Brazil, Saudi Arabia, South Korea, Australia, Russia, and Mexico have improved their relative positions in that order from more to less.  The gains of Russia and Mexico are actually very unimpressive.  The losers among the smaller economies of the G20 nations from biggest loser to smaller loser are South Africa and Argentina, though both were at one time relatively leading economies in the world.

Japan and the major nations of the European Union have suffered huge reductions in their significance, while the USA and Canada have seen relatively minor reductions in their relative economic significance.  The least bad performer of the major European Union nations has been the United Kingdom.  France has been the distant second least bad.  The former Axis nations of WWII have done relatively poorly with Germany being only 0.5645 as significant and Italy becoming only 0.4790 as significant.  Japan has many anti-competitive restrictions in its home economy and has a rapidly aging and shrinking population among its problems.

Both Canada and Australia have done far better than the United Kingdom, which I believe has been held back by its membership in the European Union.  If the United Kingdom simply makes a break from all of the European Union's collectivist requirements and bureaucracy, while it will likely do worse for a while as it adjusts to the new reality, it will do much better in the long run.  The United Kingdom should aim to be more like the USA as a dynamic economic power in the world and increase its trade with the USA, Canada, Australia, and India especially.  These are all nations doing comparative well, while France, Germany, and Italy are sinking rapidly.

The EU has smothered itself with many largely irrational safety and quality control policies, which I can see as such from the standpoint of being active in materials analysis and testing.  They are using these policies to suppress goods and services from outside the EU, but the effect is to increase costs and to make local companies lazy and unresponsive in an anti-competitive environment.  In addition, the EU has been following very foolish energy policies and has swallowed the catastrophic man-made global warming fraud hook, line, and sinker, with disastrous economic results.  The inability of the bigger economies of the EU to keep up in economic growth is the result.  The USA, for all of its increased regulations and the many anti-business policies of the Obama regime, has performed much better in comparison.  With Trump decreasing the burden of unreasonable regulations and following rational energy policies, the USA is improving its relative position in the world economy.  We can do even better to the extent that we can arrange truly free trade agreements with nations around the world.

Germans are Taxed if Members of an Institutional Religion

While I am often a severe critic of the American government and its many violations of individual rights, it is also objective to understand that many governments are even worse.  For instance, if one is a member of a congregation in Germany, that church collects taxes from you as an appendage to the state income tax.  This is not a voluntary tax, except insofar as one may choose to be a congregation member or not.  The tax is 8% or 9% of income depending upon the German state one is in.  It is not surprising that the population of congregation members in Catholic and Protestant churches in Germany is dropping by 100,000 people a year.

It would be difficult to be able to afford being in a church congregation on top of the already heavy state and federal taxes, the high cost of home ownership, the high cost of German goods and services, and the high cost of energy in Germany.  Consumer Prices are 15.56% higher in Germany than in the United States.  The Average Monthly Disposable Salary After Taxes is 13.86% lower in Germany than in the US.  It does not help at all that the German government has many laws and regulations that keep each of these costs high, including a tax on those who exercise their infringed freedom of conscience by being a member of a church congregation.

I suppose you could look upon the church member tax as a penalty tax for bad behavior, such as that the Democrat Socialists in the USA applies to those who do not buy the health insurance with the 10 essential benefits that most of us to not need.  Of course the religions really are immoral and irrational, while buying a different health insurance plan than that mandated is generally both moral and rational.  So one can look upon the German congregation tax as a state imposed sin tax.  Nonetheless, it is a violation of the right to freedom of conscience.  After all, while it is not wise to actually sin, it is often a right to do so.  Of course I am using my own definition of sin, not that of a church.

King Coal Will Continue to Rule the World

The renewable energy, non-fossil fuel phantom is not about to replace Coal as the King of World Electric Power Generation.  The Western European attempt to replace coal with wind energy and solar power has only proven what was perfectly obvious:  They are unreliable and very expensive.  They are threatening Germany and other nations with severe winter power inadequacies and these are continuing to mount.  Industry is fleeing Germany for less expensive and more reliable electricity power.

The problem is not just that wind and solar power generation plants themselves are unreliable and expensive.  Because these power sources are unreliable, they have to be backed up by natural gas power plants, which can be tuned to higher or lower power outputs relatively rapidly, unlike coal-fired power plants.  The late start and the resistance to the development of shale oil and gas fields by using the well-proven frakking technique has left Europe with only high cost natural gas, much of which is imported from Russia.  The use of coal provides much less expensive and very reliable electric power, but also produces more of the falsely accused CO2 villain.

The European Union has regulations that were designed to reduce CO2 emissions which discouraged coal use altogether and limited natural gas power plants to standby duty, only to be turned on when the wind did not blow or blew too hard.  But, natural gas power plants are too expensive to keep running at less than about 57% of their capacity.  The result is that 60% of European natural gas electric power plants will be closed by 2016.  Power outages will become a frequent occurrence.  It will be miserable for residences and businesses will go out of business or move to other parts of the world.  Many of the big European businesses will continue, at an accelerated pace, to move more manufacturing operations to the US, where power is still more reliable and less expensive in many states despite Obama's best efforts to drive prices sky high.

Idiot European Union regulations or not, Europe will have to build more coal-fired power plants at some point.  According to the World Bank, in 2011 world-wide electric generation plant capacity was just over 22 trillion KWH or 22 billion MWH.  The presently known proposed building plans for coal-fired electric power plants are summarized in the schematic map below.  The 1.4 billion MWH of plants proposed will be a about a 6.4% increase in electric power generation capacity.  The biggest two contributors by far to this increase are China and India.  But, Russia, Turkey, and Vietnam are a distant 3, 4, and 5 by rank.  In Europe, Ukraine, Poland, and Germany are ranked 1, 2, and 3 with their proposed coal power plant increases.  Ukraine and Poland rightly have no qualms about this, but Germany is being driven to it out of necessity.

Given the coal-fired power plant plans of China, India, Russia, Turkey, Vietnam, South Africa, and the US, the contribution of Germany would have no significant impact on global warming, even if the failed hypothesis of CO2 emission catastrophe were true.  Obama's madmen and madwomen at the EPA are trying to nix the US building of such power plants and may succeed for awhile.  Eventually, we will learn what Germany is in the process of learning.

China is talking about trying to reduce its coal-fired power plant contribution to its increasing power needs.  However, the projected 2030 electric power plant generation capacity in 2030 is expected to compare with that of 2006 as shown below:

So in 2006, China had a 2.77 trillion KWH capacity and by 2030 it is expected to have an 8.55 trillion KWH capacity.  This is a 3.1 times increase.  Try as China may, the only way that can happen is if the use of coal powered plants greatly increases.  The 2006 coal-fired power plant capacity was 2.19 trillion KWH and it will expand in 2030 to 6.41 trillion KWH.  This is a 2.9 times increase!  The 2030 coal-fired power plant capacity of China will be the equivalent of nearly 30% of the present total world electric power generating capacity.

It is a very good thing that the hypothesis of catastrophic man-made global warming has failed.  The world is not going to be able to avoid the continued and even the increased use of coal.  If it tried, that would be a catastrophe.  The global warming alarmists time is drawing to a close.  King Coal will remain well ensconced on his throne.

German Manufacturing Threatened by Green Energy Costs

German energy costs have been considerably increased by the kind of green energy policies that Obama is so eager to follow.  Meanwhile, at least the cost of natural gas, which is often used in manufacturing heating applications, has come down greatly in the U.S. thanks to horizontal drilling coupled with hydraulic fracturing.  Obama is dying to regulate at the federal level rather than the state level where it is now regulated. He wants to reduce our natural gas output by hydraulic fracturing.

The much higher German manufacturing costs of energy in energy-intensive industries compared to the U.S. is causing executives at such German companies as Bayer and BASF to worry that little such future investment in plants and facilities can be made in Germany.  Manufacturing expansion will have to be in the U.S.

But wait, Obama may yet rescue German manufacturing from our competitive edge as he pursues his program to make our energy costs skyrocket.  Heaven forbid we should take advantage of an energy resource to create jobs in the U.S.!

Viewers of An Objectivist Individualist by Nation

Having just discussed who does the most searches on Ayn Rand related topics and who visited the website of the Ayn Rand Institute the most in my previous post, I thought it might be interesting to share where the readers of this blog come from.  Of course, this blog is not primarily about Ayn Rand.  It is about many topics of interest to me, which I discuss in a manner consistent with my own commitment to reason and to morality.  I believe my values are very consistent with those of Ayn Rand, but I do not claim they are identical.  And it must be said that my selection of topics is quite different than was Ayn Rand's.

The pageviews of the last month have been by:

United States, 7002
Russia, 941
United Kingdom, 699
Canada, 221
France, 177
Germany, 155
India, 126
Australia, 98
Spain, 62
Netherlands, 48

The pageviews history for all time have been by:

United States, 86,960
Russia, 8252
United Kingdom, 7455
Canada, 5486
Germany, 2989
India, 2985
Australia, 2822
South Korea, 2272
France, 939
Slovenia, 777

It would be of great interest to me to know who my readers are and why they read this blog.  I wish to invite my readers to either make comments or to tell me why they read this blog in e-mails sent to charles.r.anderson@gmail.com

It is a rather curious thing to me that I have had so many readers in Russia, for instance.  If readers there would be kind enough to shed light on that, I would be most appreciative.  I suspect that part of the reason is that I discuss man-made global warming and energy issues with some frequency and Russia is a giant energy producer and many Russians are rather skeptical about catastrophic man-made global warming.  Either personal reasons for being a reader or general insight into why Russians might read this blog would be welcome information.

While Scandinavians may be big readers of the Ayn Rand Institute website, they are not such big readers of this blog.  Sweden, Denmark, Norway, and Finland do pop up on the list occasionally when I look at the statistics of pageviews for a given week, but this is not a regular thing.  I see South Africa fairly often in such shorter timescales also.  Spain and the Netherlands are also frequently on the list for shorter timescales.

Germans Face Skyrocketing Electricity Bills

Let us recall that Obama has promised us skyrocketing electricity bills.  He wants to do to us what is already happening to the German people.  Electricity costs are even worse in Denmark.

The German government is aiming to have 80% of German energy produced by renewable sources by 2050.  It has also decided to close down all nuclear power plants by 2022.  Older fossil fuel plants are being shut down already.  Solar, wind, and biomass energy now are a quarter of the country's electricity supply.  The levy subsidizing the green energy electricity sources instituted with the Renewable Energy Sources Act (EEG), has caused electricity costs to skyrocket.  Electricity now costs about 85% more than in 2000, when EEG was passed.  The EEG is to be increased by 47% next year to a toll of 5.3 cents per kilowatt hour.  Already, electricity is less expensive in many European and Asian countries by 30%.  It is 50% less expensive in the U.S. and Russia.  This will cost Germany jobs.

The subsidy next year for renewable energy to be paid by German consumers is about 20 billion Euros.  The Technical University of Berlin just issued a study that predicts that the subsidies crushing German consumers will be more than 300 billion Euros by 2030, which is unsustainable.  Already, as many as 800,000 German households are unable to pay their electric bills.  In 2009, German households spent an average of 2,500 Euros a year for energy.  At the 2009 average monthly exchange rate to dollars, this was the equivalent of $3,474 a year.  German households are now paying about 41% of their total bills for heating and hot water costs.  After the electricity rate increases already scheduled for next year, further increases from 30 to 50% are expected over the next ten years.

Costs are not the only major problem.  A very cold period in February 2011, was more than the electric grid could handle.  A number of heavy industry plants in the Hamburg area were forced to shut-down.  There is reason for concern that further shut-downs will be needed this winter and next winter.

The story for investors has been bleak.  Wind and solar power system manufacturers are among the worst -performing stocks in the last few years.  Vestas, the Danish wind turbine manufacturer, had a fantastic 20 times increase in stock value from 2003 to 2008.  The value of the stock has now returned to the 2003 value.  In 2012, Vestas is losing money and has had to reduce its workforce around the world by 3,735.  Vestas America has cut jobs this year, hurting Obama's claim of creating many green jobs.

Solar panel makers have had a similarly hard time.  SunTech of China is the largest photovoltaic panel manufacturer.  Its private equity investors, including Goldman Sachs, made 10 times their original investment.  When SunTech shares were initially launched on the stock market, they went from $20 to $79 in late 2007.  The stock has crashed since to $0.92!  Similarly, First Solar was at $308 in April 2008 and now is about $23.  Falling prices due to a surplus of manufacturing capacity and sinking government subsidies have caused the solar industry to become unprofitable.

Yet, Obama still thinks he is going to create millions of green jobs in America.  If he uses subsidies to do so, they will have to be huge.  Huge subsidies will kill other jobs in greater numbers than those created in the green industries.  The green industries have very brown thumbs.

GDP and Industrial Output Comparisons by Country

I needed to find out if China was the number 1 manufacturing nation in the world or was it the United States?  This proved a bit more difficult question than I thought it would be.  But the CIA World Factbook had the information needed to determine this and to calculate the actual value of each of the three sectors into which they divide the GDP for the year 2010.  These sectors are Agriculture, Industry, and Services.  The results I found for the 7 nations with the largest GDPs expressed in dollars with purchasing power parity are given in the following table:

 

The answer to my original question is that the value of China's industrial output, which includes mining and construction, is $4.73 trillion, while that for the United States is $3.24 trillion.  China's industrial output is 46% greater than that of the United States.  No other nation comes close to having so much industrial output as China or the United States.  The value of China's agricultural output is also the largest in the world.  In this case, it is 6 times that of the United States.  It is the delivery of services that the U.S. excels in doing.

The per capital GDP for the United States is more than 6 times that of China.  Germany has the second highest per capita GDP on the list and that of the U.S. is 32% higher.  The United Kingdom and Japan both have per capita GDPs very nearly as great as that of Germany.  This group has a per capita GDP more than twice that of Russia, whose per capita GDP is more than twice that of China, whose per capita GDP is more than twice that of India.

Solar Power Increased Cost for German Electricity

Both the federal government and many of the state governments are mandating much increased use of so-called renewable power such as solar and wind generated electricity.  We should be very aware of the costs of doing this.  Germany has gone far down this road.  What are the results in Germany?

Germany makes Germans pay high levies on their electricity bills to pay people to invest in offshore wind turbines and roof-mounted solar panels.  These levies are guaranteed for 20 years.  Offshore wind turbine generated electricity is supported with a levy of $0.21 per kilowatt-hour and roof-mounted solar panels are given $0.46 per kilowatt-hour!  As a result, Germans have rushed to put solar panels on their roofs and the levies paid for wind, solar, and hydro power will be $11.3 billion this year, which is a 55% increase from last year.  About 8 gigawatts of new solar panel installations are projected for this year.  This is the electricity output of 4 large nuclear power plants, or would be if the sun always shone brightly in Germany 24 hours a day.  Those installing solar panels after this summer, will be paid 16% less for the electricity they produce.

The result is that on a German's electric bill, taxes and levies are now 41% of the bill and that percentage has been climbing rapidly.  VZBV, the German consumer association, says the solar panels installed in 2010 alone will cause additional electricity charges of $36 billion over the next 20 years.  Similar mandated renewable energy is constantly being advocated by Democrats, our version of socialists, in the U.S.  Our costs, especially if you live in California, have been cranked up as a result also.  Texas and Colorado are other states where the cost of electricity has been cranked upward significantly.  Read more about this here.

Incurring these increased energy costs is pointless.  Political central planners are frightening people around the world with stories of almost immediate failures of our energy supplies and catastrophic man-made global warming which require us to turn to incredibly expensive renewable energy.  The renewal they are talking about is apparently the renewed poverty of people around the world, who have often been improving their standards of living recently.  Their improved standard of living is offensive to Democrats and will be greatly impeded by nonsensical requirements to drive energy costs sky-high in accordance with the otherworldly dreams of Obama, Pelosi, Waxman, Markey, and others of the lunatic fringe of American socialist politics.

How is Obama's European Socialism Plan Working in Europe?

Europe started suffering from the oil price spike in early 2007 before we in the United States of America did.  Europe's energy prices, thanks to their socialist government's policies and taxes, were already much higher than those in the U.S.  In addition, the weight of the public sector on the private sector was even greater, making the private sector much more susceptible to the strain of the oil price spike.  As is very clear now, many of the countries of Europe are burdened with excessive debt.  In fact, Greece and Latvia are considered to be among the 7 governments in the world most likely to go into default.  Almost no one now believes the recent $1 trillion bailout of Greece is going to prevent that nation's default.  The regional government of Sicily in Italy is the 10th most likely governmental default.  Portugal, Spain, Italy, and Ireland are in very serious trouble.  Even Great Britain is said to be dubious.  There is now reason to believe that Germany is also.

As I noted in my last post, of the largest banks in the world to go under in this recession, one was a German bank.  The Sachsen LB bank had to be taken over by the Landesbank Baden-Wuerttenberg  with help from the Saxony government in December of 2007.  It turns out that there is reason to believe that part of the reason the German banks were so willing to help bailout little Greece with only about 2% of the GDP of the EU, was because many German banks are seriously over-extended.  Let us look at a bit of background history on what is going on in Obama's idea of a socialist utopia, socialist Western Europe.

Socialists do not understand economics.  They cannot because economics deals with the very complicated interactions of huge numbers of individuals trading huge numbers of values for other values.  The socialist assumes that all economic activity can be dictated, controlled, regulated, and governed by a central planning authority in government.  A real economy is much too complicated for that, but socialists insist in living in a Platonic dream world of pure economic forms.  In this world, the complex multivariate interactions of a private sector are almost always shoe-horned into some simple-minded governmental industrial and trading policy such as mercantilism.  Usually, the controlling government selects certain industries for their export potential and controls its currency to keep it artificially low in value in comparison with that of other countries in order to help keep its exports low in cost.  The selected industries may also have many effective subsidies as well.  This is what happened to Japan and brought its post-war recovery to an end in the 1980s and has left Japan in the doldrums ever since.  China has shown recent problems with this also.  So too does Germany show similar problems with its mercantilism policy.

Germany has a large export surplus with respect to most of the world and this includes the rest of Europe.  What should happen in such a case is that the German currency should become worth more and go up in value relative to other currencies.  The currency is rather like the stock in a country.  When it proves itself to be productive enough to do well in the export market, its stock should go up.  Imports from other countries then start to look very inexpensive and the country with the export advantage both starts losing that advantage and starts importing more.  This tended not to happen in Germany even before the euro became the common currency of most of the European Union.  The Germans had little choice but to put their money into savings, since it was too expensive to spend it on imports.  The banks in turn had to find ways to invest that money.  The German banks did this by loaning it to their many trading partners who had trade deficits with Germany.  Many of these countries do not offer many good investments, so the German banks have become very good at losing the money that Germans save with them.  The banks are under-capitalized.

Once most of Europe went to sharing a common currency, there was no longer even a possibility that the currency of Germany might go up in value relative to the currency of its net importers in other countries of Europe.  The trade imbalance issues have actually become more acute.  One of the reasons Germany was willing to put so much money into the Greek rescue plan was because French President Sarkozy furiously threatened German Chancellor Merkel with abandoning the common euro currency.  The Greeks also had more leverage in negotiations than one would have expected.  It turns out that a mercantile economy can be very fragile.  How fragile?

The German government has put a ban in place on short selling.  The mandate calls for a short selling ban in particular on 10 large German banks including Deutsche Bank, Commerzbank, and Allianz.  It also banned the purchase of naked credit default swaps of European Union government bonds.  This can be expected to have some negative effects:

• Large fixed income investors will be less able to adequately hedge their positions or be faced with insufficient market liquidity in the future to exit their positions.  They will be driven to invest in other markets.  The almost immediate stock market drop attests to this.
• The ban is a signal to the markets and investors that more bad news is coming. Investors are likely to lose even more confidence in European debt markets.  Spain recently had to reduce the amount of national bonds it could sell due to too few takers, so this may already be manifesting itself.

Germany, just as Japan and China have found, is not really in the catbird seat by virtue of having an export surplus.  It is highly dependent upon the health of the many countries which are running a trade deficit with it.  The old saying that one should neither a debtor nor a lender be has some solid truth in it.  One's country's exports and imports should be in balance.  If they are not, then the country to which one is lending should be growing rapidly so that one's investment is good.  On the other hand, if one is a debtor nation, one's economy had also best be growing rapidly.  This is not the case in Western Europe, where most countries have so immersed themselves in socialism that the public sector is seriously weighing down the private sector.

Obama's socialist heaven, Western Europe, is not feeling well at all.  Yet, it and Obama continue to criticize the free market of ideas, goods, and services that at one time characterized the U.S. and enabled it to become the economic superpower of the world.  The U.S. became an empire of wealth, created by free individuals voluntarily trading values with one another as they wished with little governmental interference.  This proven engine for economic growth is not in fashion in socialist Western Europe where unemployment rates of 10 to 20% have long been common, along with slow growth rates.  Nonetheless, it is this model that our lying leader wishes to dictate that we adopt.  This last week, he made major in-roads on this effort with the Dodd Financial Institution Take-Over.  Obama sure knows how to use an "emergency" to take a firm grasp on ever more totalitarian power.

IMF Projects Some Out-of-This-World National Debts

The International Monetary Fund (IMF) has produced the debt predictions for the year 2014 given below.  The chart is from the 27 March - 2 April 2010 issue of The Economist.  The bar graph plot is actually of the increase in the national debt from 2007 to the projected debt of 2014, which is given in the small boxes on the right as a percent of the nations GDPs.

The United States IMF-projected increase in the national debt from 2007, when the Democrats were in their first year of controlling Congress, looks to be about 47% between then and 2014.  Both Japan and Great Britain will have added even more to their national debts, but note that the U.S. has recently been much more profligate in its overspending than even such stalwart socialist countries as France, Germany, and Italy.  While Japan's projected 2014 national debt will guarantee its sluggish growth for decades as it struggles under an unimaginable debt 246% greater than its GDP, the projected national debt of the U.S. at 108% of GDP will make us stagger a good deal also.  We will wind up with a national debt worse than that of Britain, France, and Germany, each of which we recognize as irresponsible socialist countries.  What does this make the U.S.?

Kudos belong to Canada, which has been much wiser in managing its economy throughout this recession.  It is increasing its national debt by only about 5% from 2007 to 2014 and its 2014 national debt will be a mere 69% of its GDP.  That should position Canada for solid growth in the near future and leave Canadians much less burdened with debt and the interest on that debt than the wayward Americans to the south.  It looks as though I would be wise to shift some of my retirement investment to Canada, where it may be safer and have better prospects for growth.

Victor Davis Hanson: The bad war?

Dissatisfaction with the war in Iraq appears to be inducing both the left and parts of the right to reinterpret America's previous wars. The conservative Patrick Buchanan has written Churchill, Hitler and the 'Unnecessary War': How Britain Lost Its Empire and the West Lost the World." Wow, what a perspective on WWII! Then there is the view that American and British bombing of German cities in WWII was a war crime, put forth by the leftist Nicholson Baker in Human Smoke: The Beginnings of World War II, the End of Civilization. Just war theory is popular in some circles. Victor Davis Hanson has a well-done commentary on this rewriting of history and this tendency to think that "liberal democracies be not just better and smarter than their adversaries, but almost superhuman in their perfection."

He points out that Buchanan's (and many others) belief that the Treaty of Versailles that ended WWI was too harsh, should be viewed in light of how much worse the treaty was that Germany (Prussia) offered France in 1871 after the Franco-Prussian War or to the treaty offered to Russia in 1917 when Russia left WWI after its revolution. According to Hanson, it was also milder than the treaty Germany intended to offer a defeated Britain and France should Germany win WWI. It may still be the case that the Treaty of Versailles was too harsh in terms of reparation payments, but one can also argue that the penalty for starting a war and losing it needs to be severe to prevent countries from playing at war as though it is a game. Try and try again until you win all the marbles, as in the Hundred Years War. This is rather what Germany did by starting WWII. To prevent this, one can argue, as Hanson does, that the real mistake was not occupying Germany after WWI.

In any case, Hanson claims that these books do not prescribe realistic alternatives, which ought to be a lot easier to do after the fact than it is reasonable to expect it was for Britain and France while fighting for their lives. What kind of world would it have been if we had continued to find ways to keep doing deals with Hitler which were adequate to keep him happy? I expect Hitler would have been happy for a few more years if every time he proposed taking large chunks of other countries, the Allies had said "OK, go right on ahead." After all, he was only asking for areas where Germans lived. They lived in most of the cities and large towns throughout eastern Europe where they were prominent professionals and tradesmen. Hitler could have gone on a long time taking over areas alleged to committed abuses against these Germans, many of whom were German Jews.

Hanson says of America's role, "They and those who sent them into the carnage of World War II knew Americans could do good without having to be perfect. In contrast, the present critics of the Allied cause enjoy the freedom and affluence that our forefathers gave us by fighting World War II while ignoring -- or faulting -- the intelligence and resolve that won it."