PDI Spending

8/16/2019 PDI Spending

1/58

Negative


2/58

Spending DA: 1NC

Credit ratings agencies agree that the U.S. budget defcit isstable now

Puzzanghera 1, Jim is a staf writer at the Los Angeles Times, 3/21/14, Fitchtakes U.S. creit rating of owngrae watch a!ter e"t eal,htt#$//www.latimes.com/"%siness/la&'&mo&'tch&creit&rating&e"t&limit&2(14(321&stor).html

* Strong fscal consolidation has been achieved !" #itch said! a re$erence to

the a%tomatic spending cuts known as the se+%ester that began last %ear. &

'he budget defcit $ell to ( o$ )DP last %ear $ro* +.,( the previous %ear

and -.( in /00-, Fitch sai. This 'scal )ear, the com#an) !orecasts the e'cit toshrink to 2.- o! so&calle gross omestic #ro%ct. A recent two&)ear budget deal

was a sign "there has been some i*prove*ent in the coherence o$

econo*ic polic%*a2ing" in 3ashington! #itch said. Still, the 'rm oes not

e#ect a "roaer *gran "argain* on long&term e'cit re%ction %ntil a!ter the 2(10#resiential election. #itch described the prospects $or U.S. econo*ic growth

as " *ore robust" than *an% other advanced nations . t !orecast the

econom) wo%l e#an ") 2.- this )ear a!ter a 1.- increase in 2(13. n other#ositie signs, Fitch sai the Feeral esere ha starte to re%ce its stim%l%seforts, the U.S. "anking s)stem was health) an iien #a)ments !rom sei5eho%sing 'nance giants Fannie 6ae an Freie 6ac ha ofset the cost o! their"ailo%ts. Last s%mmer, 4ood%5s upgraded its outloo2 $or the U.S. credit

rating to stable! citing the shrin2ing budget defcit an im#roe econom).

S6P also shi$ted its outloo2 to stable $ro* negative in J%ne !or similarreasons, "%t warne the U.S. was still )ears awa) !rom regaining its AAA rating.

78shore shatter fscal discipline9its grossl% e;pensive reton 78e#artment o! 9iil an Trans#ort :ngineering an ;orwegianUniersit) o! Science an Technolog) Stat%s, #lans, an

Technologies !or ?fshore @in T%r"ines in :%ro#e an ;orth Americahtt#$//www.scienceirect.com/science/article/#ii/S(0(141(((2243BSeveral challenges are! however! *et b% o8shore wind energ%. ?igherinvest*ents in towers! $oundations and underwater cabling are needed!and installation is *ore di@cult and e;pensive o8shore. 78shore wind

energ% is also as o$ now 1.B/ ti*es *ore e;pensive than onshore. A long

planning phase including a*ong others environ*ental! engineering!$easibilit% and sitespecifc studies is reuired! and in so*e areasco*petition with other *arine users will "e a #ro"lem as well. Access to theo8shore sites $or *aintenance and repair is also a *aor concern. Si*pleproble*s that could be f;ed instantl% and at low costs onshore reuire ati*econsu*ing logistical s%ste*! and *a% su8er unpredictable dela%sdue to adverse weather conditions. Eepairs are an esti*ated B10 ti*es*ore e;pensive to per$or* o8shore than onshore! *ainl% due to the need$or e;pensive crane vessels! and waiting periods $or suitable weather


3/58

conditions can be e;tre*el% costl% . n some cases, een !or a t%r"ine locate

onl) 1 km ofshore, a #erio as long as two weeks can #ass witho%t access to thesite !or re#air "eing #ossi"le. t was recentl) estimate !or a #ark of the coast o!relan that the t%r"ines are reacha"le !or re#air onl) a"o%t C(DEC- o! the timewhen looking at the whole )ear. Such li*ited access rates $or repair and

*aintenance leads to lower production ti*e $or o8shore turbines! thusa8ecting the econo*ics o$ the par2s. Aaila"ilit) o! the t%r"ines is e#ecte togo own !or locations s%"mitte to harsher enironmental conitions, an asistance !rom the shore increases. An e;a*ple o$ di@culties $ollowing $ro*access issues was the e;periences b% Festas in the ?orns Eev wind $ar*o8 the coast o$ Den*ar2. A$ter proble*s were $ound with so*e o$ theturbines generators and trans$or*ers! Festas decided to change theseco*ponents in all the 0 turbines o$ the par2. Access to the site was thena *aor issue! and it was decided to re*ove all the nacelles and bringthe* onshore $or repair! which was ver% costl%! and during which ti*e thepar2 could not be in operation. 7ne conclusion $ro* this e;perience and$ro* other wind par2s is that the wind turbine technolog% should be

proven be$ore turbines are ta2en o8shore.

7nl% continued spending cuts avert a downgradeNew*an 1G @ith U.S. 'scal #ro"lems %nresole,treas%re AAA rating ma) !all of clifhtt#$//www.washingtontimes.com/news/2(13/Man/E/%s&'scalro"lems&%nresole&aaa&rating&ma)&ro#/#ageGallB8es#ite the iniference in some #arts o! @ashington, anal)sts sa) this time co%l"e iferent an that a second downgrade b% 4ood%s or #itch has the

https://www.google.com/search?sourceid=chrome-psyapi2&ion=1&espv=2&ie=UTF-8&q=%22rick%20newman%20is%22https://www.google.com/search?sourceid=chrome-psyapi2&ion=1&espv=2&ie=UTF-8&q=%22rick%20newman%20is%22https://www.google.com/search?sourceid=chrome-psyapi2&ion=1&espv=2&ie=UTF-8&q=%22rick%20newman%20is%22https://www.google.com/search?sourceid=chrome-psyapi2&ion=1&espv=2&ie=UTF-8&q=%22rick%20newman%20is%22


4/58

potential to cause signifcant *ar2et tur*oil and da*age the countr%s

privileged fnancial status ! which includes the lowest govern*ent

borrowing rates in the world and the *an% prerogatives that go with

printing the worlds *ain reserve currenc%! the U.S. dollar. e"o%n wo%l

"e iNc%lt :conomic anal)sts sa) that, once lost! it would be di@cult $or the

U.S. to regain its top rating ! and the *ove would confr* in the e%es o$

*uch o$ the world that the U.S. is slowl% sliding into secondtier

econo*ic status . >The net ste# is a er) serio%s clif that inoles the creit rating o! the U.S. t oesnOt get more serio%s than that, an one ho#es that willca%se some to "e more res#onsi"le than the) might otherwise "e, sai 8ai Pelleher, #resient o! Qetter 6arkets nc. an a !ormer Senate 8emocratic aie. >Un!ort%natel), the laste"ate oer the e"t ceiling in 2(11 oesnOt gie m%ch ho#e. The owngrae in A%g%st 2(11 #rooke a maMor ro# in cons%mer an "%siness con'ence an #rom#te a i55)ingro# o! more than 0(( #oints in the 8ow Jones in%strial aerage the a) it ha##ene. Q%t the im#act #roe to "e transient, with most losses reco%#e within a matter o! weeks ormonths, leaing man) in @ashington to +%estion whether another owngrae will hae an) lasting signi'cance or efect. >=l%s, there are too man) sa)ing the) are going to hol thecreit rating o! the U.S. hostage to their #olic) #re!erences, 6r. Pelleher sai. >! #oliticians arenOt care!%l, the) co%l act%all) make eer)thing m%ch worse. So%ning the alarm Somein 9ongress mostl) e#%"licans agree that @ashington sho%l "e worrie a"o%t the net owngrae. >America cannot afor !or 6oo)Os alarm to !all on ea! ears, sai e#. Tim%elskam#, Pansas e#%"lican. >n 2(11, @ashington was gien am#le notice that AmericaOs stellar creit rating was on thin ice, "%t @ashington #asse on the o##ort%nit) to elier asol%tion. Un!ort%natel) !or America, the so&calle 'scal clif legislation was another last&min%te eal instea o! a real sol%tion. There were conse+%ences !or inaction last time, an clearl)there will "e conse+%ences this time aro%n as well. Q%t ske#ticism that @ashington will rise to the occasion also is #lenti!%l. Li"eral gro%#s s%ch as the :conomic =olic) nstit%te, ala"or&"acke think&tank, arg%e that there is little nee to c%t the e'cit with Treas%r)Os 1(&)ear "orrowing rates at all&time lows o! less than 2 #ercent. The) sa) the U.S. sho%l takeaantage o! s%ch low rates an increase s#ening on in!rastr%ct%re, %nem#lo)ment "ene'ts an other economic stim%l%s #rograms. >Some res#ecte oices on the le!t "eliee that a!oc%s on the e'cit is an oer"lown reaction to a managea"le #ro"lem, sai 8ai ollingsworth, aiser !or the Thir @a), a centrist 8emocratic gro%# that is #%shing !or !%rthermeas%res to re%ce the e'cit. >The) arg%e that i! o%r e"t was reall) a "ig eal, inestors wo%lnOt "e s%##l)ing %s with ca#ital so chea#l). o"ert Sha#iro, an economic aiser in the9linton aministration, aocates aitional meas%res to gra%all) re%ce s#ening on entitlement #rograms an "ring own the e'cit, "%t he "lames the last owngrae one#%"licans, not 8emocrats, an sai it co%l ha##en again i! conseraties insist on co%#ling an increase in the e"t limit with %n#o#%lar s#ening re!orms. >The last time that o%sean Senate h)#er&conseraties went own that #ath, it cost the U.S. goernment its tri#le&A rating !rom one o! the three maMor creit&rating agencies, he sai, s%ggesting that8emocrats will tr) to #in an) !%rther owngraes on e#%"licans i! it ha##ens again this )ear, an to %se it to #olitical aantage. >An) #olitical leaer or #art) that hel#s to "ring a"o%ts%ch a catastro#he will #roe themseles %n't to goern !or a er) long time, he sai. @all Street worries The growing intransigence on the le!t an right has le man) on @all Streetan 6ain Street to +%estion whether another agreement eliering more "%get c%ts will emerge !rom the latest ro%n o! negotiations. Tom =orcelli, chie! economist at Q9 9a#ital6arkets, sai he e#ects e#%"licans to 'ght har !or s#ening c%ts that el%e them in last weekOs eal, "%t the o%tcome is in o%"t. >n the a"sence o! a gran "argain in the net two

months, it is li2el% that the U.S. is downgraded , he sai. >And this downgrade is

li2el% to have a *ore signifcant *ar2et i*pact than the S6P

downgrade!I because it will $orce invest*ent $unds around the world to

reshuJe the securities in their port$olios to ensure the% are *aintaining

AAA or other targeted rating levels, he sai. 'his will cause widespread

disruptions in global *ar2ets as investors recalibrate their port$olios!

causing a K cascade e8ectI on assets other than 'reasur%s! he said. Lohn

>rowne! senior econo*ic consultant at Muro Pacifc Capital! said the

da*age $ro* $urther downgrades would a8ect the U.S. status in the

econo*ic world $or a long ti*e . The U.S. ollar is the worlOs ominant

c%rrenc), he sai, "eca%se e"t tro%"les in the e%ro5one hae tarnishe the a##ealo! the e%ro, which ha "een ascening as a re#lacement !or the ollar in the #astecae. >This #riilege #osition has con!erre on @ashington the ital element o!time to organi5e ia"le reisions to its entitlements, whose %ncontrolle growth isat the root o! the U.S. e"t #ro"lem, he sai. Q%t #olitical leaers a##ear to "e>s+%anering the l%%r) o! time the) got !rom the ongoing :%ro#ean e"t crisis, hesai. >'he spectacle o$ A*erican politicians $ailing to agree on budgets!spending li*its or an% t%pe o$ fscal discipline can a8ect the credit ratingo$ the U.S. ?er the longer term, a maMor !all in the creit rating is likel) to

increase U.S. interest rates, he sai. Q%t #erha#s the greatest im#act is to the U.S.re#%tation. >The "latant ereliction o! %t) on is#la) in @ashington will iminishnational #restige, 6r. Qrowne sai.

Mcono*ic collapse causes global warsEo%al 10 78irector o! 9oo#eratie Threat e%ction at the U.S. 8e#artment o!8e!ense


5/58

Oess intuitive is how periods o$ econo*ic decline *a% increase theli2elihood o$ e;ternal conict. =olitical science literat%re has contri"%te amoerate egree o! attention to the im#act o! economic ecline an the sec%rit)an e!ence "ehaio%r o! intere#enent stales. esearch in this ein has "eenconsiere at s)stemic, )aic an national leels. Seeral nota"le contri"%tions!ollow. First, on the s)stemic leel. =ollins


6/58


7/58


8/58

/nc U #iscal Discipline

'heres Congressional co**it*ent to fscal discipline thele$t and right agree

?unger$ord R, Thomas L. %nger!or, :=Os 8irector o! Ta an Q%get =olic), Testimon) "e!ore the o%se 9ommittee on @a)s an 6eans,htt#$//www.e#i.org/#%"lication/testimon)&ho%se&committee&wa)s&means/

Concern over our longter* fscal challenges appears to have *ade long

ter* fscal discipline the order o$ the da% . For eam#le, congressional

budget proposals! such as the 9ongressional Progressive Caucuss budget

proposal and 6r. E%ans "%get #ro#osal, la% out policies that would reduce

budget defcits and $ederal debt oer the 1(&)ear "%get winow, al"eit in er)iferent wa)s.

Eevenues increasing and the debts declining

AP +R11, Feeral "%get e'cit !or 6a) #%t at V13( "illion,htt#$//www."%falonews.com/"%siness/!eeral&"%get&e'cit&!or&ma)%t&at&13(&"illion&2(14(011

The im#roement this )ear reects a stronger econom) an la"or market, whichtranslates into more income an higher ta reen%es. 'he govern*ent has also

tri**ed spending to gain control o$ soaring defcits in recent )ears.

Eevenues this )ear totaled 1.-G trillion thro%gh 6a), up ,. percent !rom

the same #erio a )ear ago. )overn*ent spending oer this #erio totaled

/.G, trillion! a drop o$ /.G percent $ro* a %ear ago.

No! seriousl%! we have the lowest defcit in %earsTli*asins2a 10RG0, Pasia is a staf writer at Qloom"erg, Q%get 8e'cit in U.S.;arrows to C&Wear Low on ecor een%e, htt#$//www."loom"erg.com/news/2(13&1(&3(/"%get&e'cit&in&%&s&narrows&to&C&)ear&low&on&recor&reen%e.html

'he U.S. posted its s*allest budget defcit in fve %ears as em#lo)ment

gains hel#e #ro#el reen%e to a recor.Spending e;ceeded receipts b% +0.G billion in the 12 months ene Se#t.3(, the narrowest gap since /00! co*pared with a 1.0- trillion short$allin 'scal /01/, the Treas%r) 8e#artment sai toa) in @ashington. n Se#tem"er,the U.S. recore a VEC.1 "illion s%r#l%s, little change !rom the s%r#l%s in the samemonth a )ear earlier.

http://www.buffalonews.com/business/federal-budget-deficit-for-may-put-at-130-billion-20140611http://www.buffalonews.com/business/federal-budget-deficit-for-may-put-at-130-billion-20140611http://www.buffalonews.com/business/federal-budget-deficit-for-may-put-at-130-billion-20140611http://www.buffalonews.com/business/federal-budget-deficit-for-may-put-at-130-billion-20140611


9/58

/nc U #iscal Discipline A': CurrentSpending

Mven though were still deep in debt corrective action is

*itigating the i*pactMpstein +R1, Rene :#stein is a staf writer at Qarrons, A 6ie Qag o! ;ews !orthe Feeral Q%get,htt#$//online."arrons.com/news/articles/SQC(((1424(C3111(3C3(4CE0142C1(((20E2

Start with the goo news. 'he $ederal budget is still bleeding red in2! but

the he*orrhaging is occurring at a slower rate.

'he nonpartisan C ongressional > %get 7 Nce recentl) updated the !eeral

govern*ent5s fscal report card through 4a%. As o! the 'rst eight months o!the 2(14 'scal )ear, which "egan last ?cto"er, the "%get defcit ran G-billion! 1 billion less than the sa*e eight*onth period a %ear ago.

This G0( decline was %e to a com"ination o! higher recei#ts


10/58

/nc U Downgrade A': NonDebt Hssues

Debts the biggest issueUSA 'oda% 1G, Fitch ma) owngrae U.S. creit rating,

htt#$//www.%satoa).com/stor)/mone)/"%siness/2(13/(1/1C/'tch&owngrae&%s/13C3C/7ther $actors #itch sa%s support the U.S.5s AAA rating are the co%ntr)Kseconomic )namism, lower 'nancial sector risks, the r%le o! law as well as theglo"al "enchmark stat%s o! the co%ntr)Ks "ons an the ollar.

?owever it sa)s these * $unda*ental credit strengths are being eroded b%

the large! albeit steadil% declining! structural budget defcit and high and

rising public debt."


11/58

/nc Uniueness #itch

'he $ederal AAA credit rating with #itch is stable nowPuzzanghera 1, Jim is a staf writer at the Los Angeles Times, 3/21/14, Fitch

takes U.S. creit rating of owngrae watch a!ter e"t eal,htt#$//www.latimes.com/"%siness/la&'&mo&'tch&creit&rating&e"t&limit&2(14(321&stor).html

@AS;RT?; && #itch atings on Fria) upgraded its outloo2 $or the U.S. AAA

credit rating! re*oving the nation $ro* a downgrade watch a!ter #oliticians#%t of another e"t limit "attle %ntil net )ear.'he co*pan%, one o! three maMor creit rating 'rms, changed the outloo2 !orthe rating to sta"le $ro* a negative watch #%t in #lace in 7ctober.


12/58

/nc A': U 7verwhel*sRNo Downgrade

'he credit rating is stable but uncertaint% re*ainsDetri;he R//, John is a staf writer at Qloom"erg, U.S. 9reit&ating ?%tlook

9hange to Sta"le ") 8QS, htt#$//www."loom"erg.com/news/2(14&(4&22/%&s&creit&rating&o%tlook&change&to&sta"le&")&"rs.html

The negative outloo2 on the U.S.s AAA creit&ran2ing was changed to

stable b% D>ES Hnc. a*id declining $ederal budget defcits and a$ter

Congress suspended the nations debt li*it earlier this )ear %ntil 2(1C.'he Toronto&"ase ratings co*pan%s adust*ent $ollows decisions b%

4ood%s nestors Serice and S tanar 6 P oorOs last )ear to change their

o%tlooks on the U.S. to sta"le !rom negatie. SH= stri##e the nation o! its to#grae in A%g%st 2(11, citing, in #art, #olitical iscor a"o%t the e"t limit. 6oo)Osgies the nation its to# Aaa grae.

The iss%er o! the worlOs resere c%rrenc) aoie a owngrae !rom 8QS, which

con'rme its AAA rating. Stronger econo*ic growth is $orecast b% agovern*ent agenc% to reduce the budget defcit to a seven%ear low as ashare o$ the econo*%.

> Uncertaint% oer !%t%re #olitical coo#eration re*ains, es#eciall) gien

congressional elections this ;oem"er, the ratings com#an) sai toa) in astatement. >8QS consiers a selectie e!a%lt to "e %nlikel) gien there#erc%ssions on the #olitical #arties, on inestor sentiment an on the economicrecoer).

'he reason were not about to be downgraded is because westopped waste$ul spending Eeturn to the old d%na*icsguarantees econo*ic collapse and downgrade'anner 1G, ?errate 8e"t 9eiling, 6ichael Tanner is a senior !ellow at the 9atonstit%te an a%thor o! Leiathan on the ight$ ow Qig&Roernment 9onseratismQro%ght 8own the e#%"lican eol%tion,htt#$//www.cato.org/#%"lications/commentar)/oerrate&e"t&ceiling

Q%t none o$ this would be worse than a $ailure to ta2e *eaning$ul action

to reduce the debt! $ederal spending! and the growth o$ govern*ent.

nee, i$ we want to see *ore credit downgrades ! *ar2et tur*oil ! and

slow growth ! all we need do is continue on our present course.

'hat is wh% all three *aor agencies have a positive outloo2 B

*eans the lin2 controls the internal lin2 #ole% GR/1, 6egan Fole) is a staf writer at @all Street 9heat Sheet,htt#$//wallstcheatsheet.com/#olitics/crisisasse&'tch&remoes&%&s&creit&owngrae&warning.html/aGiewall

#itch has also $orecast that the defcit will continue to decline in the

co*ing %ears , i##ing to 2. #ercent this 'scal )ear an 2.0 #ercent in the 2(1C

'scal )ear. To "e !air, =ortman re!erre to oerall goernment e"t which isgrowing when making his ire #reiction, while FitchOs anal)sis onl) to%che on


13/58


14/58

Oin2


15/58

1nc Oin2978shore 3ind

78shore wind is e;pensive9their ev doesnt assu*e *assive*aintenance costs

>reton D e#artment o! 9iil an Trans#ort :ngineering an ;orwegianUniersit) o! Science an Technolog) Stat%s, #lans, an Technologies !or ?fshore @in T%r"ines in :%ro#e an ;orth Americahtt#$//www.scienceirect.com/science/article/#ii/S(0(141(((2243ISeveral challenges are! however! *et b% o8shore wind energ%. ?igherinvest*ents in towers! $oundations and underwater cabling are needed!and installation is *ore di@cult and e;pensive o8shore. 78shore windenerg% is also as o$ now 1.B/ ti*es *ore e;pensive than onshore. A longplanning phase including a*ong others environ*ental! engineering!$easibilit% and sitespecifc studies is reuired! and in so*e areasco*petition with other *arine users will be a proble* as well. Access tothe o8shore sites $or *aintenance and repair is also a *aor concern.

Si*ple proble*s that could be f;ed instantl% and at low costs onshorereuire a ti*econsu*ing logistical s%ste*! and *a% su8er unpredictabledela%s due to adverse weather conditions. Eepairs are an esti*ated B10ti*es *ore e;pensive to per$or* o8shore than onshore! *ainl% due to theneed $or e;pensive crane vessels! and waiting periods $or suitableweather conditions can be e;tre*el% costl%. n some cases, een !or a t%r"inelocate onl) 1 km ofshore, a #erio as long as two weeks can #ass witho%t accessto the site !or re#air "eing #ossi"le. t was recentl) estimate !or a #ark of thecoast o! relan that the t%r"ines are reacha"le !or re#air onl) a"o%t C(DEC- o! thetime when looking at the whole )ear. Such li*ited access rates $or repair and*aintenance leads to lower production ti*e $or o8shore turbines! thusa8ecting the econo*ics o$ the par2s. Aaila"ilit) o! the t%r"ines is e#ecte to

go own !or locations s%"mitte to harsher enironmental conitions, an asistance !rom the shore increases. An e;a*ple o$ di@culties $ollowing $ro*access issues was the e;periences b% Festas in the ?orns Eev wind $ar*o8 the coast o$ Den*ar2. A$ter proble*s were $ound with so*e o$ theturbines generators and trans$or*ers! Festas decided to change theseco*ponents in all the 0 turbines o$ the par2. Access to the site was thena *aor issue! and it was decided to re*ove all the nacelles and bringthe* onshore $or repair! which was ver% costl%! and during which ti*e thepar2 could not be in operation. 7ne conclusion $ro* this e;perience and$ro* other wind par2s is that the wind turbine technolog% should beproven be$ore turbines are ta2en o8shore.


16/58

/nc W': 78shore 3ind Oin2

78shore wind energ% e;pensive $or a *%riad o$ $actorsUS 78shore 3ind Collaborative 7rganizing )roup B A leaer in

ofshore win eelo#ment. The 9olla"oratieOs Qoar o! 8irectors an =rogram=artners incl%e national leaers in goernment, in%str), acaemia, anenironmental aocac) A Framework !or ?fshore @in :nerg) 8eelo#ment inthe US htt#$//www.%sowc.org/#!s/'nalX(X2(.#!IMuropean o8shore wind proect costs generall% range between 0.0 and0.1 per 2ilowatthour! which is al*ost double that o$ onshore proects.Construction and accessibilit%! which are the leading cost drivers! are*uch *ore di@cult at sea. #or e;a*ple! the *aorit% o$ the cost o$ ano8shore wind proect is attributable to its balance o$ plant co*ponents!including the $oundationRsupport structure! installation! and trans*ission!as opposed to an onshore proect! where *ost o$ the costs reside with thewind turbines. The high constr%ction costs !or ofshore eelo#ment make cost

re%ction, #artic%larl) in the "alance o! #lant com#onents, a ke) com#onent o!achieing com#etitie ofshore win energ) eelo#ment.


17/58

1nc Oin2 7cean Power

7cean power spends a ton#ehrenbacher - @h) @ae an Tial =ower AreLost At Sea tKs 8arn :#ensie. htt#$//gigaom.com/2((/(0/(/wh)&wae&an&tialower&are&lost&at&sea&arn&e#ensie/I8es#ite man) com#aniesO "est eforts, wae an tial #ower installations hae "eenlargel) st%ck in the #ilot stage "igger #roMects in #artic%lar hae !ace technicalglitches an a lack o! !%ning. Tom Ponra oer on Alt:nerg)Stocks #oints o%tresearch one last )ear showing ocean powers *ost vulnerable point: Htsone o$ the *ost e;pensive clean energ% generation options out there .

ThatOs accoring to a st%) eelo#e last )ear ") in!rastr%ct%re consulting fr*>lac2 and Featch


18/58

1nc Oin2 Eenewables Mnviron*ental Eeview

7cean renewables *ust sub*it to environ*ental reviewsStosser ,, 6ichael Stosser is a Sr. Yice =resient an Reneral 9o%nsel Aro%r

9a#ital nestments, :QA 9L6AT: 9A;R: =6:$ F;A;9;R A :;:@AQL:=?J:9T,htt#$//!elM.org/sites/e!a%lt/'les/ocs/elM21/'nancingXaXrenewa"leX#roMect.#! 6oing %# the scale o! siting iNc%lt), one can also #%t wind proects in theocean and there are some tidal proects being considered. ?cean win antial #roMect !ace the same t)#es o! concerns enironmentall). ?ne is concernea"o%t "ir or 'sh im#acts. These #roMects ma) also raise aesthetics concerns, as in

the case o! the 6assach%setts !acilit). These proects, howeer, have $ar *ore

signifcant per*itting reuire*ents than solar or lan "ase win. 'hese

proects will trigger reuire*ents $or $ederal per*its under section 10 o$the Eivers and ?arbors Act and section 0 o$ the Clean 3ater Act! section4(4. These re+%irements, in t%rn, will trigger the re+%irements !or a state water+%alit) certi'cation %ner section 4(1 o! the 9lean @ater Act. The proects cani*plicate coastal zone *anage*ent concerns and reuire NMPAco*pliance. 'he% *a% trigger the need $or an Mndangered Species Act

consultation. So these ocean proects will begin to drag in *an% *ore o$

the $ederal regulator% concerns and will reuire *ore up$ront wor2.

'hat wastes resources on litigation! balloons progra* cost!dela%s the a8! and ulti*atel% cancels the proect vote negon presu*ptionConrad and Sarwal + har lookat #otentiall) signi'cant enironmental efects o! its #ro#ose actions, "%t the Actoes not #%r#ort to control the agenc)Os %ltimate choices. See, e.g., Yermont Wankee;%clear =ower 9or#. . ;89, 43C U.S. C1, CC


19/58

in$or*ation *a% develop! partiall% through the disclosures o$ the NMPA

state*ent. Hnationar% pressures ! and other costs ! could econo*icall%

doo* the proect during the dela% . NMPA thereb% beca*e an i*portant

*eans to the end: stopping the proect . 8enis Qiner, ;:=A, ;6QWs an ;ew

Technolog), 2C Lan an @ater Law eiew 11, 1E


20/58

Oin2 )enericsR'ric2s


21/58

1nc Oin2 7cean M;ploration

7cean e;ploration is super e;pensive and leads to 4HSSH7NCEMMP

Allen 0+ B :rica Allen is a gra%ate !rom 6orehea State Uniersit) The Yo)age o! the8ee# Ql%e Sea htt#$//www.angel're.com/#lanet/oceane#loration/ericaXallen/I'o add to all the dangers o$ ocean e;ploration! it is also a ver% e;pensiveadventure. According to the /00 National 7cean M;ploration Progra* ActKthe bill would authorize the appropriation o$ *illion annuall% $orfscal %ears /00+ through /011 and *illion annuall% $or fscal %ears/01/ through /01,I


22/58

/nc W': M;ploration Oin2

7cean e;ploration e;pensiveCarl%le 1G B )an 9arl)le, QS9h:, S%"sea )ra%lics :ngineer @h) 8onOt @e S#en6ore Time :#loring the ?ceans, ather than S#ace :#lorationhtt#$//www.!or"es.com/sites/+%ora/2(13/(1/31/wh)&ont&we&s#en&more&on&e#loring&the&oceans&rather&than&on&s#ace&e#loration/IH* one hundred and twent% *iles o8shore in the )ul$ o$ 4e;ico right now!wor2ing on installing seaoor euip*ent $or an oil proect. No one spends*ore ti*e e;ploring the deepest oceans than the oil industr%. n the lasttwent) )ears, there has "een a erita"le e#losion o! ee#water e#loration, withetensie s%"sea s%re)s !or #i#elines an anchors an oil well in!rastr%ct%re. @ehae !antastic s%"sea ro"ots that let %s see an work own to 1(,((( !t e#th aswell as a host o! seismic imaging s)stems to see "elow the seaoor, sonar, 8o##lerc%rrent sensors, monitoring "%o)s, an so !orth. The e+%i#ment to e#lore theoceans eists toa) an is in ro%tine %se !or energ) e#loration. Foream#le$emote ?#erate Yehicles


23/58

o! eer esta"lishing h%man ha"itation more than a"o%t 1((( !t ee#. The #ress%resare too great, an no engineering or materials conceia"le toa) wo%l allow %s to"%il lia"le&si5e s#aces on the ee# sea oor. The two times h%mans haereache the ee#est #art o! the ocean, it re+%ire a !oot&thick awless metal s#herewith "arel) eno%gh internal s#ace to sit own. As !ar as can tell, seaoor liing isall "%t im#ossi"le a ha"ita"le moon "ase wo%l "e astl) easier to engineer than

a seaoor colon). See m) answer to nternational S#ace Station$ Rien the act%als#ace station SS, wo%l it "e chea#er to "%il the e+%ialent at 3&4&C miles ee#%nerwater @h)To reca#$ we dont spend *ore ti*eR*one% e;ploring theocean because its e;pensive! di@cult! and uninspiring. @e stare %# at thestars an ream o! reaching them, "%t !ew #eo#le look of the sie o! a "oat anwish the) co%l go own there.


24/58

/nc Oin2 Oinear

3e win even i$ we lose uniueness ever% dollar spent has anegative econo*ic i*pact

#urth +R-, Salim F%rth, =h8, is Senior =olic) Anal)st in 6acroeconomics in the9enter !or 8ata Anal)sis, o! the nstit%te !or :conomic Freeom an ?##ort%nit), at The eritage Fo%nation, Stim%l%s or A%sterit) Fiscal =olic) in the Rreat ecessionan :%ro#ean 8e"t 9risis,htt#$//www.heritage.org/research/re#orts/2(14/(0/stim%l%s&or&a%sterit)&'scalolic)&in&the&great&recession&an&e%ro#ean&e"t&crisis=rotecting economic growth is not the onl) economic #%r#ose o! goernment.

'here are tradeo8s . Q%t growth remains ital to creating inii%al

o##ort%nities, an the #riate&sector econom) is the so%rce o! !%ning !or the resto! goernmentOs #riorities.U.S. polic%*a2ers should address the co*ing public$unding crisis with the

best econo*ic research in min$ 'a; increases will slow growth at *ore

than a dollar$ordollar rate Z s#ening c%ts will likel) hae little efect on

growth. The recent histor% o$ sti*ulus and austerit% corroborates the

scholarl% research and confr*s that it is never too earl% to prepare

A*ericas fnances $or the ne;t recession.


25/58

/nc Oin2 OinearRChina 3ar

Mach dollar ris2s econo*ic collapse and China warEu*below 11


26/58

maMor oilro%cing co%ntries co%l esta"ilise America ") switching to e%rosinstea o! ollars as the c%rrenc) in which oil is #rice & so&calle *#etro&ollarwar!are*. ?r a terrorist organisation might trigger a 'nancial crash ia some kino! sha) hege !%n or com#%ter attack. @hat the economic war game showe=ro!essor Qracken was that militar) an economic ecision&making has to "emore %ni'e. >an2s and bonds are now weapons! M%st as m%ch as "om"s.

*That makes the militar) nero%s, as the) ha alwa)s "een in charge o!o#erations. ThatKs wh) the) know the) nee to %nerstan this,* =ro!essorQracken sa)s. 6r ickars sa)s that, *! )o%Kre going to con!ront the US militar),)o% wo%l s#en "illions.Q%t i! )o% can o so M%st as efectiel) in 'nancial s#ace,an it wo%l cost less, wh) not* =erha#s Qritain !elt a taste o! this last )ear, withsome stockmarket shocks that wi#e millions of three Qritish com#anies. QT lost#o%n stg. 0 million


27/58

/nc Cost 7verruns

Dont believe their low cost esti*ates ocean proects cause*assive costoverruns which independentl% tan2 solvenc%

4iller 1G, =a%l 6iller writes at 9lo% o! 8ata, Qase in the UP an workingglo"all), 9lo% o! 8ataKs cons%ltanc) serices hel# clients %nerstan theim#lications o! taking ata an more to the 9lo%, 9lo% on merit, not ") ictat,htt#$//clo%o!ata.com/2(13/(C/clo%&on&merit&not&")&ictat/

Technological aances an shi!ting "%siness re+%irements afect Roernment M%stas m%ch as the) o the enter#rise. Fragmentation an siloisation can "e %se toe#lain s#rawling ata centre estates, which oNcials now work har to consoliate.

Shi$ting reuire*ents ! overengineering ! cron%is* and politics can all

ta2e the bla*e $or *assive costoverruns on boil the ocean proects that

rarel% realise their pro*ise . Lighter, nim"ler, more res#onsie, more

acco%nta"le an more cost&efectie a##roaches to Roernment T are %nenia"l)

re+%ire, an itOs tr%e that clo% can an sho%l #la) a role here.


28/58

N7AA Cost 7verruns

N7AAs especiall% prone to cost overruns no accountabilit% Loint 7cean Co**ittee +, A==?=AT?;S$ Senate #anel "oosts ocean,

'sheries research at ;?AA, htt#$//www.Mointoceancommission.org/news&room/in&the&news/2((0&(E&14XSenateX#anelX"oostsXoceanXHX'sheriesXresearchXatX;?AA^:H:X8ail).#!

*H$ not $or D7D! this co**ittee wonders at what point N7AA would have

acted on its own to report the cost overruns an con%ct its own

recerti'cation,* the 9JS committee re#ort reas, echoing similar harsh report

language a##roe ") o%se a##ro#riators


29/58

/nc #und Siphoning N7AA

N7AA siphons $unds $ro* the plan to other proects B *eansthe% lin2 but the a8 never gets i*ple*ented B vote neg on

presu*ptionCudd% 1/, 8on 9%) writes at So%th 9oast Toa), ;?AA comes %ner criticismagain, this time oer ;ational @eather Serice !%ning,htt#$//www.so%thcoasttoa).com/a##s/#"cs.ll/articleA8G/2(12(0(C/;:@S/2(0(C(31/1(1/?=;?;

An internal investigation has uncovered ongoing fnancial irregularities at

the weather service, accoring to a ;?AA memo. n 'scal 2(12 alone, up to G*illion *a% have been "reprogra**ed,* the term em#lo)e ") ;?AA toescri"e what has taken #lace, the memo sai.

*'his is a case o! robbing Peter to pa% Paul!" sai Jef %ch, eec%tie irector

o! =::, a national organi5ation o! !eeral, state an local em#lo)ees who work in

the enironmental 'el. Str%ct%ral e'cits were "%ilt into the ;ational @eatherSerice "%get accoring to %ch. *'he% were using appropriated $unds to

bac2fll general operations in a sort o! budgetar% Ponzi sche*e ,* he sai.

A 0(age re#ort #ro%ce ") ;?AA !o%n that, !or at least the #ast two )ears, the

agenc% has been shi$ting appropriated $unds $ro* a nu*ber o$ its

designated progra*s and using the* to cover other e;penses an to hel#

aoi em#lo)ee !%rlo%ghs, accoring to %ch.

4ore evidence B the proble* is ende*ic to N7AAConathan 1G B 6ichael 9onathan is the 8irector !or ?cean =olic) at the 9enter !orAmerican =rogress Fish on Fria)s$ The 8ollars an Science o! Fisher) 6anagement

htt#$//american#rogress.org/iss%es/green/news/2(13/(3/2/C22/the&ollars&an&science&o!&'sher)&management/IEep. Lohn #le*ing mis%se o! !%ns, an 9ongressgets er) angr) when agencies tam#er with its care!%ll) cra!te s#ening #lans. Hn$act! N7AA $ound itsel$ in hot water last %ear when Congress $ound that

the agenc% Kreprogra**edI G+ *illion $ro* one National 3eather

Service account to pa% e*plo%ees in another part o$ the 3eather Service. So shi!ting !%ning !rom the satellite #rogram to the 'sheries acco%nt seems as i! itwo%l "e a sha) sol%tion at "est.

http://naturalresources.house.gov/calendar/eventsingle.aspx?EventID=322259http://thinkprogress.org/climate/2011/03/24/207753/noaa-satellite-funding-forecasts/http://articles.washingtonpost.com/2012-06-20/politics/35459927_1_national-weather-service-noaa-atmospheric-administrationhttp://naturalresources.house.gov/calendar/eventsingle.aspx?EventID=322259http://thinkprogress.org/climate/2011/03/24/207753/noaa-satellite-funding-forecasts/http://articles.washingtonpost.com/2012-06-20/politics/35459927_1_national-weather-service-noaa-atmospheric-administration


30/58


31/58

/nc Part% >oats N7AA

N7AA is corrupt and waste$ul9G00!000 splurge on a part%boat.

'il$ord 1/ ;?AA oNcials %se V3((,((( l%%r) "oat !or alcohol&!%ele #arties.htt#$//www.eaminer.com/article/noaa&oNcials&%se&3((&(((&l%%r)&"oat&!or&alcohol&!%elearties.I

@AS;RT?; 8.9. & According to in$or*ation in the Congressional Eecord &the ;ational ?ceanic an Atmos#heric Aministration >Zs. This "oat has a !%ll) a##ointe "ar, the latest on"oar entertainments)stems com#lete with leather !%rnit%re_Accoring to the ns#ector Reneral, ;?AAha no reasona"le oNcial %se !or this "oat. F%rthermore N7AA o@cials in charge were acc%se o! ``*anipulateOO an ``iolateOO the govern*ent purchasing rules

to get this boat, which the) %se !or alcohol !%ele #arties with !riens an !amil)mem"ers. ;?AA oNcials %se the "oat !or the !ollowing$ Tri#s to ocksieresta%rantsZ am"%rger an hotog QQs an alcohol&!%ele #arties an with !amil)an !riensZ ``=leas%re cr%isesOO at high rates o! s#ee, with "eer cons%me on"oarZ :en tho%gh Feeral r%les "an non&em#lo)ees !rom "eing on essels, a;?AA s%#erisor een tol a s%"orinate that his


32/58

/nc Hnvestors Perceive S*all Changes

Hnvestors are a sensitive bunch and perceive s*all changesD3 /R,, 8e%tsche @ell is a Rerman ;ews#a#er, htt#$//www.w.e/%s&e"t&ceiling&

reloae/a&1E410E1Q%t bondholders and other investors are a sensitive bunch , an i$

confdence in the world5s biggest econo*% su8ers! it can cause the* tohold $ewer US 'reasuries or US dollars.

*'his is the biggest i*pact o! all this,* Pirkegaar tol 8@. *An increase in

uncertaint% ! less invest*ent! $ewer obs created and lower growth."

">rin2*anship oer the e"t ceiling casts uncertaint% over the $ull $aith andcredit o$ the US and ris2s under*ining confdence in the role o$ the US

dollar and having a detri*ental e8ect on the econo*% ,* : Par2er, a

*anaging director at #itch atings told D3 ia e&mail.

http://www.dw.de/us-dollars-exorbitant-privilege-at-risk/a-17156068http://www.dw.de/us-dollars-exorbitant-privilege-at-risk/a-17156068


33/58

/nc A': Cost Msti*ates

Dont trust their cost esti*ates the govern*ent lies and italwa%s costs *ore

Mdwards 11 9hris :wars is the irector o! ta st%ies at 9AT?, n!rastr%ct%re=roMects to ' the :conom) 8onOt Qank on it,htt#$//www.cato.org/#%"lications/commentar)/in!rastr%ct%reroMects&'&econom)&ont&"ank&itLooking at the 9or#s an eclamation, the 'rst lesson a"o%t !eeral in!rastr%ct%re

#roMects is that %ou can5t trust the costbeneft anal%ses . >oth agencies

have a histor% o$ $udging their studies to *a2e proposed proects loo2

better, %nerstating the costs an oerstating the "ene'ts. An weKe known it,too. n the 1C(s, Sen. =a%l 8o%glas


34/58

Hnternal Oin2


35/58

/nc A': No Downgrade Eis2 ?urts Mcono*%

Lust the ris2 o$ downgrade triggers our *ar2ets internal lin2 3ashington Post 10R1, 2(13,

htt#$//www.washington#ost.com/"%siness/econom)/as&%s&!acesotential&owngrae&markets&ash&alarm&oer&e"t&ceiling&im#asse/2(13/1(/1C/(321!e0&3C"e&11e3&(c0&Ee022!Xstor).html

>The #itch action is another chin2 in the ar*or as the $ull $aith and credit

o$ the U nite S tates is called into uestion, sai Scott Anerson, chie!

economist at the Qank o! the @est in San Francisco. > 4ar2ets are starting to

get $rustrated that we havent seen *ore *ove*ent! and the%re

starting to worr%.I

4ore ev

CN>C 10R1, Fitch #%ts US AAA rating on rating watch negatie,htt#$//www.cn"c.com/i/1(1(3(33b.#itch atings put the US goernmentKs *AAA* creit rating on Krating watchnegative5 T%esa), sa)ing that the stanstill on the U.S. e"t ceiling negotiationsrisks %nermining the efectieness o! the co%ntr)Ks goernment an #oliticalinstit%tions.

U.S. stoc2 inde; $utures $ell.

*Altho%gh Fitch contin%es to "eliee that the e"t ceiling will "e raise soon, the#olitical "rinkmanshi# an re%ce 'nancing ei"ilit) co%l increase the risk o! aU.S. e!a%lt,* the rating agenc) wrote in a statement.

S6P 00 $utures $ell -.+ points while Dow Lones industrial average $utures

san2 +0 points and Nasda 1(( !%t%res $ell ,. points.


36/58

/nc Mcon Hnternal Downgrade )oes )lobal

Downgrade causes global econo*ic collapse)ilani 11


37/58

/nc A': Downgrade M*piricall% Denied

'he second downgrades worse:

aQ Collapses business confdence causes $ullblowndoubledip recession

)abriel 11 6ichael Ra"riel, writer !or Yitaer an Associates, nc., /1/11, >owthe ecent U.S. 9reit 8owngrae 9an Afect Jo" iring, Yitaer an Associates,nc., htt#$//www.itaer.com/"log/2(11/(/recent&%s&creit&owngrae&afect&Mo"s/

J%st like that, the United States credit rating has ro##e !rom AAA to AA,accoring to Stanar an =oorOs. Tho%gh AA isnOt "a at all, since it means thatthe co%ntr) still has a strong ca#a"ilit) to meet its 'nancial o"ligations, nothing still"eats tri#le A, an a downgrade isnt reall% so*ething %oud e;pect $ro* as%#er#ower s%ch as A*erica. ;eeless to sa), a downgrade can be a prelude

to a *ore negative econo*ic outloo2! worse a doubledip recession. This

ma) also mean that other credit rating agencies such as #itch )roup and

4ood%s *a% $ollow suit! $urther propelling the countr% down . Since all!actors in economics are intere#enent, )o% can s%rel) e#ect some changes inthe wa) "%sinesses work an hire workers. Tho%gh a lot o! re#orts s%ggest thattho%sans o! #eo#le hae "een act%all) hire an that thereOs a re%ction in%nem#lo)ment claims, man) things co%l ha##en "etween toa) an tomorrow.

These incl%e the !ollowing scenarios$ 1. Co*panies *a% $reeze hiring. 'he%*a% tr% to i*ple*ent the Kwait and seeI attitude. Altho%gh man)organi5ations wonOt terminate thier em#lo)ees, the) ma) sto# getting new hires%ntil the) can s%rel) !eel that the econom) starts to #ick %#. 2. Q%sinesses ma)"ecome choos). #ir*s across the US will tr% their best to reduce theiroverhead e;penditures as *uch as possible. ?ne o! the #ossi"le ste#s the%

*ight take is to avoid hiring $resh graduates or those who lac2 e;perience . Training can cost a lot o! mone) !or com#anies, es#eciall) !or start&%#s. 3.Mnterprises ma) ecie to look !or workers elsewhere. To "e more s#eci'c, the)*a% opt to outsource a lot o$ obs to telecomm%te or home&"ase workers


38/58

"eliee the) hae goo leaers an committe goernment agencies, the) ma) M%stcontin%e on with their normal o#erations, with harl) an) changes.

bQ Causes capital ight and tan2s consu*er confdenceDorning Detri;he and Tatz 1/, 6ike 8orning, John 8etrihe an an Pat5,Qloom"erg =ress, (E/10/O12, 78owngrae Anniersar) Shows nestors Raine Q%)ingU.S., htt#$//www."loom"erg.com/news/2(12&(E&10/owngrae&anniersar)&shows&inestors&gaine&"%)ing&%&s&.htmlB Y;d

Still, the #ossi"ilit) o! another downgrade will weigh on polic% *a2ers , sai

@illiam 8ale), ?"amaOs !ormer @hite o%se chie! o! staf. :en tho%gh Treas%r)

)iels !ell, >consu*er confdence dropped dra*aticall% a$ter the

downgrade! and do we reall% want to test that again XI he said. The

9on!erence QoarOs 9ons%mer 9on'ence ine #l%nge !rom C.2 in J%l) 2(11 to4C.2 in A%g%st in the wake o! the e"t stanof an creit owngrae. The ineinOt recoer to its J%l) leel %ntil 8ecem"er. Rrowth in cons%mer s#ening slowe!rom (. #ercent in J%l) o! last )ear to (.1 #ercent in A%g%st "e!ore re"o%ning to(.E #ercent in Se#tem"er. nestors in America omne), s#eaking to re#orters in9oncor, ;ew am#shire, three a)s a!ter the owngrae, sai the ratings cutKhas a conseuence not onl% $or our borrowing cost longter*! but also $orthe abilit% o$ A*erica to have the confdence o$ people around the worldas investors in A*erica.I Rlenn ?ubbard, a omne) economic aiser, said ina J%l) 12 tele#hone interiew that the e#%"lican caniate >was an is a"sol%tel)right. #light o$ capital out o$ Murope! a slowing world econo*% and the#eds progra* o$ replacing holdings o$ shortter* debt with longerter*securities have obscured the i*pact o$ the downgrade! he said. )an, a@isconsin e#%"lican, also e!ene his warning, sa)ing interest rates haenOt gone%# onl) "eca%se so man) other nations are in s%ch "a sha#e. Sae aen >@e area sa!e haen !or now !or inestors "eca%se o! :%ro#eOs e"t crisis, )an sai in an

interiew.Eates will rise! he predicted. K3e ust dont 2now when! and H

dont want to te*pt $ate .

http://www.bloomberg.com/news/2012-07-16/downgrade-anniversary-shows-investors-gained-buying-u-s-.htmlhttp://www.bloomberg.com/news/2012-07-16/downgrade-anniversary-shows-investors-gained-buying-u-s-.htmlhttp://www.bloomberg.com/news/2012-07-16/downgrade-anniversary-shows-investors-gained-buying-u-s-.htmlhttp://www.bloomberg.com/news/2012-07-16/downgrade-anniversary-shows-investors-gained-buying-u-s-.html


39/58

H*pact


40/58

/nc H*pact Debt China Collapse

Declining confdence in the dollar collapses Chinas econo*%#oster - eiing stopped bu%ing an% $oreigndebt! its e;ports would plunge $urther and une*plo%*ent would

s2%roc2et. Mcono*ic and political i*plosion o$ China itsel$ would be near

certain . >otto* line: 'his is an inherentl% unstable situation! $raught


41/58

with peril $or both countries . 3e5d all be best o8 i$ >eiing were to

graduall% reduce its purchases o$ US securities producing an orderl%rebalancing o$ global trade and capital ows as China beca*e less e;portdependent and the US less dependent on China5s A'4


42/58

/nc H*pact Downgrade #ood

Ooss o$ confdence in the dollar causes global instabilit% ands2%roc2eting $ood prices

4in 10 B The Qig Free5e, 1(&2,htt#$//www.american#rogress.org/iss%es/2(1(/1(/"igX!ree5e.htmlI'he U.S. dollar! o$ course! is the worlds reserve currenc% in large part

because o$ the depth and liuidit% o$ the U.S. ' reas%r) bond *ar2et. H$

this *ar2et is severel% disrupted! and investors lost confdence in U.S.'reasur%s! then it is unclear where nervous investors *ight go ne;t. A

sharp and swi$t *ove b% investors out o$ U.S. 'reasur% bonds could be

highl% destabilizing! straining the alread% delicate global econo*%.

magine, !or eam#le, i! inestors moe !rom soereign e"t into commoities,most o! which are #rice an trae in ollars. 'his could have the catastrophic

i*pact o$ wea2ening the worlds largest econo*ies while also raising theprices o$ the basic inputs \such as metals or $ood I that are necessar) !or

economic growth.n short, a !ree5e on the e"t ceiling wo%l ca%se o%r interest #a)ments to s#ike,making o%r "%get sit%ation een more #ro"lematic, while #otentiall) triggering

greater global instabilit% 9perhaps even a global econo*ic depression .

'hat causes billions o$ deaths and global instabilit%

>rown , B


43/58

W': #ood H*pact

'his is the greatest i*pact G billion are at ris2 >rown Falling @ater Ta"les K9o%l it Foo S%##l)K, 2&E,

htt#$//www.#eo#lean#lanet.net/oc.#h#iG2424I4an% Americans see terroris* as the principal threat to sec%rit), but $or

*uch o$ hu*anit%! the efect o! water shortages an rising tem#erat%res on $ood

securit% are $ar *ore i*portant iss%es. #or the G billion people who live on

/ dollars a da% or less and who spend up to ,0 per cent o$ their inco*e on

$ood! even a *odest rise in $ood prices can uic2l% beco*e li$e

threatening . For them, it is the net meal that is the oerriing concern.*


44/58

/nc H*pact DowngradeRDollar 'R ?eg

Dollars the *ost i*portant $actor to heg'a%lor


45/58

A@r*ative


46/58

78shore 3ind A': Spending Oin2

A h%brid s%ste* o$ tari8s and contracts will reduce the ris2 $orinvestors and cut the cost o$ invest*ent

)reen 6 Fasila2os 10 B Eichard )reen and Nicholas Fasila2os are pro$essorsin the Depart*ent o$ Mcono*ics at the Universit% o$ >ir*ingha* \K'he Mcono*icso$ 78shore 3indIhttp:RRwww.sciencedirect.co*RscienceRarticleRpiiRS0G01/11000,+1Q

?%brid sche*es are also possible. Hn Spain! the s%ste* o$ support $or *ostrenewable generators has *oved $ro* a pure $eedin tari8 to a f;edpre*iu* on top o$ the *ar2et price! to a pre*iu* that is adusted to 2eepthe generators overall revenue within a particular range


47/58

G00R23! which will reduce the cost o$ electricit% to 1 or /cents per2ilowatt hour \23hQ. There is some sco#e !or reersing the whole wa) we look at#ower s%##l), in its 24&ho%r, E&a) c)cle, %sing #eak loa e+%i#ment sim#l) to meetthe ail) #eaks.


48/58

Ee*ote Sensing A': Spending Oin2

Ee*ote sensing satellites are the *ost coste8ective wa% o$*apping so $ar

4u*b% et al - B this article was a colla"oration "etween mem"ers o! the SheNel9entre !or :arth ?"seration Science an 8e#artment o! Reogra#h) at the Uniersit) o!SheNel an the 9entre !or Tro#ical 9oastal 6anagement St%ies at the Uniersit) o!;ewcastle The cost&efectieness o! remote sensing !or tro#ical coastal reso%rcesassessment managementhtt#$//www.scienceirect.com/science/article/#ii/S(3(14EE(2CCIAlthough coastal habitat *apping is e;pensive! re*ote sensing is a *orecoste8ective techniue than alternative feldsurve% *ethods


49/58

The) also hae some a"ilit) to etect s)stematic iferences in !orage +%alit) withistance!rom water. Ee*otesensingbased range assess*ent o8erssignifcant cost advantages. As part o$ the 0 0002*/ surve% *entionedabove! cost co*parisons were *ade with the *ore conventional feldbased techniues that rel% on botanical data. H$ an area o$ the sa*e size ise;a*ined using the procedures o$ the Centralian Eange Assess*ent

Progra* \>astin 1--Q! the setup cost is US/ 000! and 1/+ *anwee2so$ labor are reuired to *easure all sites three ti*es in 10 %r. >%co*parison! a re*otesensingbased assess*ent over the sa*e pe riodusing the 3PAC *ethod has a setup cost o$ US 000 includingco*puter hardware and so$tware but reuires onl% , *anwee2s o$ labor\>astin et al.! in pressQ. 'he cost saving is substantial! and the 3PAC isnow li2el% to be adopted as a standard techniue b% at least onegovern*ent agenc%. An added advantage is that surve%s can be done $ro*archived satellite data! while feldbased *ethods *ust accu*ulate dataover long periods i$ range trend is to be investigated. =erha#s the mostim#ortant element o! the gra5ing graient methos escri"e here is their a"ilit) to"e %se on a er) large scale.


50/58

NonUniue Mntitle*ents

Mntitle*ents doo* fscal disciplineColu*bus Dispatch +R/, ;o oging 'scal realit) @itho%t re!orm,

entitlements soon will go""le %# !eeral "%get,htt#$//www.is#atch.com/content/stories/eitorials/2(14/(0/2C/no&oging&'scal&realit).htmlLast week, =ortman recite the alarming !acts that are well known to an)one!amiliar with the iss%e$ Social Securit%! 4edicare! 4edicaid and other

nondiscretionar% spending progra*s *a2e up twothirds o$ the $ederal

budget! and that will cli*b to three$ourths within 10 %ears. @itho%t an)

changes, entitle*ent spending will double within 10 %ears! to the point

that it consu*es 100 percent o$ the nations ta; revenues . 'hat *eans

that ever% other, iscretionar) !eeral progra*, !rom e!ense to highwa)s toe%cation, will have to be paid $or b% borrowing.

9learl), entitle*ent spending has to change i$ the nation is to escape the

conseuences o$ ruinous debt . =ortman #%t it well$ > onOt think itOs a matter o!

ieolog) or #oint o! iew. think it is a *atter o$ arith*etic. 'he nu*bers are

si*pl% overwhel*ing .I


51/58

No Downgrade 4ood%s

4ood%s will not downgrade usSal*on 11 e%ters.>The iference "etween SH= an 6oo)Os. AURUST ,

2(11. Feli Salmon is a 'nance Mo%rnalist !or e%ters.htt#$//"logs.re%ters.com/!eli&salmon/2(11/(/(/the&iference&"etween&s#&an&moo)s/

S?Y::R; 8:QT Amist all the owngrae talk, one cr%cial #oint has "een largel)missing$ theres a ver% good reason wh% it was S6P! and not 4ood%s!which downgraded the US. Hts this: the two co*panies dont *easure thesa*e thing with their credit ratings. An S6P ratings see2s to *easure onl%the probabilit% o$ de$ault. Nothing else *atters not the time that the iss%eris likel) to remain in e!a%lt, not the e#ecte wa) in which the e!a%lt will "eresole. 4ost i*portantl%! S6P si*pl% doesnt care what the recover%value is 9 the a*ount o$ *one% that investors end up with a$ter the

issuer has de$aulted. 4ood%s! b% contrast! is interested not in de$aultprobabilit% per se! but rather e;pected losses. 8e!a%lt #ro"a"ilit) is #art o!the total e#ecte loss "%t then )o% hae to also take into acco%nt whatOs likel)to ha##en i! an when a e!a%lt occ%rs. 'he di8erence, as it a##lies to the USsoereign creit rating! is enor*ous. No one doubts A*ericas abilit% to pa%its debts! and i$ the US should ever fnd itsel$ in a position where its$orced b% law to de$ault on a bond pa%*ent! that de$ault is certain to beonl% te*porar%. >ondholders would get all o$ their *one%! in $ull! within acouple o$ wee2s! and probabl% within a $ew da%s. 9ontrast that with, sa),some incom#rehensi"l) com#le constant #ro#ortion e"t o"ligation, which makesall o! its #a)ments ") int o! cleer leerage games, an which, i! it eer oese!a%lt, oes so with %tter 'nalit), an will neer #a) o%t a single cent again.


52/58

No Downgrade H*pact

No i*pact to a downgrade*ultiple internal lin2s3iles +R10 7@iles, %ss. The Ari5ona e#%"lic. %ss @iles has "een a #ersonal&

'nance writer !or The Ari5ona e#%"lic !or more than 2( )ears, coeringinestments, taes, "anking/creit, retirement #lanning, Ari5ona cor#orations anrelate to#ics. >8es#ite gains, U.S. misses to# AAA creit rating again.htt#$//www.a5central.com/stor)/mone)/"%siness/2(14/(0/(E/%s&aaa&creit&rating&misse/1(1(23/B

Stanar H =oorKs mae waes three )ears ago when it c%t its rating on U.S.goernment e"t !rom AAA. Us%all), when a e"t iss%er gets owngrae, whethera goernment or cor#oration, that entit) m%st #a) a "it more in interest to attractinestors "eca%se it is now #erceie as more risk). So, too, !or cons%mers who getowngrae in the !orm o! a lower creit score. The) #a) higher "orrowing costs oncreit cars an mortgages, ma) !ace a higher e#osit re+%irement !or %tilit)

serice or co%l see a rise in their a%to&ins%rance rates. Wet the Standard 6 Poor5sdowngrade didn5t have *uch tangible i*pact on either 3ashington5sinterest costs or its abilit% to issue *ore debt. A$ter the downgrade! %ieldson govern*ent bills! notes and bonds actuall% $ell. Hnvestor de*andre*ained robust. As note, thatKs not s%##ose to ha##en. ?ne reason it inKt isthat the com#etition namel), other bignation govern*ents inKt look allthat m%ch more enticing, mire in e"t #ro"lems o! their own. nestors contin%eto look to the U.S. goernment as the %ltimate sa!e haen %ring times o! aniet),an the economic t%rmoil o! the #ast hal!&o5en )ears ae a lot o! %ncertaint). tKsworth noting that rial creit&rating agencies s%ch as 6oo)Ks nestors Serice anFitch inKt !ollow with their own owngraes, t%rning the Stanar H =oorKs actioninto an isolate eent. Fitch in late 2(13 warne o! a owngrae "%t cancele it this

)ear. 6oo)Ks has st%ck with a tri#le&A grae. n the greater scheme o! things, arating o$ AA] isn5t all that $ar re*oved $ro* AAA, an Stanar H =oorKscontin%es to see a lot o! #osities !or the co%ntr). t notes that the U.S. continuesto have the largest and *ost diversifed econo*% and a resilient one! allo$ which supports the govern*ent5s abilit% to raise revenue. 'he U.S. alsohas i*pressive political and other instutitions and eno%s e;ibilit% on*atters o$ econo*ic polic%. Ht has a large! aJuent population! the ban2ingsector has recovered! and state and local govern*ents are *a2ingprogress. Standard 6 Poor5s e;pects U.S. gross do*estic product toe;pand b% /. to G. percent annuall% over the ne;t several %ears. *Thisgrowth rate is s%##orte ") a reial in man%!act%ring %e to com#etitie la"orcosts an the lower cost o! nat%ral gas stemming !rom increase shale&gas

#ro%ction,* the re#ort sai.


53/58

No China H*pact Alt Causes

Alt causes to Chinese collapse:

aQ ?ousing>oesler 1/ Qo!A$ A ar Laning n 9hina 9o%l Soon Qecome A`igh =ro"a"l) :ent,O htt#$//www."%sinessinsier.com/"o!a&china&har&laning&#ro#ert)&"%""le&2(12&EI PREecentl%! it appeared as though China5s propert% bubble was unwinding asprices ca*e down. Now! it loo2s li2e prices are turning up again. Theseeelo#ments in the #ro#ert) market #rom#te 9hinese =remier @en Jia"ao tocomment oer the weeken that *c%rrentl), the propert% *ar2et adust*ent isstill at a crucial stage an we m%st %nsweringl) contin%e the work an makethe 'ght against s#ec%latie #ro#ert) inestment eman a long&term #olic).*oweer, Qo!A 9hina strategist 8ai 9%i thinks that "ase on remarks mae ") the=eo#leKs 8ail), a 9hinese news#a#er seen as the 9omm%nist =art)Ks mo%th#iece,

additional *easures to curb the propert% *ar2et could co*e sooner thane;pected! which in turn could *ean a hard landing $or the Chineseecono*%.

bQ Collapsing de*and3oo and 3agner 1/ 9hinaOs 9oming Rreat 8eleeraging,htt#$//www.h%Nngton#ost.com/ee&woo/china&econom)&eleeragingX"X10E4C1.htmlI PR9hinaKs "iggest #ro"lem is that the state! S7Ms and cron% capitalists wield too*uch power over national econo*%! hae too m%ch control oer wealthcreation an income istri"%tion, an m%ch o! the R8= growth an este interest

gro%#sK economic #rogress are mae at the e#ense o! aerage cons%mers who arest%ck in a s#iral o! relatie #oert). Faster R8= growth will in the en not meanm%ch since 9hinese cons%mers are %na"le to s%##ort the oerca#acit) in theho%sing market an lening markets. 9hina will tr) to create more e#ortmoment%m in an efort to s%stain its growth, "%t this is a icio%s circle o! im"alancethat een a real%ation o! renmin"i cannot "reak. Uns%staina"le econo*icbubbles and collapsing de*and are the root causes o$ China5s slowingecono*%. ! these str%ct%ral e'ciencies are not #ro#erl) aresse ") thegoernment, things will get worse. 6ore !riolo%s rate c%ts an other central"anking mane%ering are s%re to come, "%t to no aail, as the chain reaction willonl) "e accelerate. China will eventuall% $ace its end ga*e the dar2 sideo$ a great deleveraging.


54/58

No China H*pact Oashout

No lashout)ille% 7Qr%ce, !ormer contri"%ting eitor at the Far :astern :conomic eiew,

6.A. ?!or, 2((4, 9hinaOs 8emocratic F%t%re, #. 114B Wet the ris2s! even to a d%ing regi*e! *a% be too high. An unprovo2edattac2 on 'aiwan would al*ost certainl% bring the U.S. and its allies tothe island5s rescue. Those !orces wo%l not sto# at Taiwan "%t might march on QeiMing an o%st the 99=, or attem#t to o sothro%gh stif sanctions, calling it a threat to regional an worl #eace. S%ch an attack might also !ace the o##osition o! the #eo#les o! F%Mian, whowo%l "e e#ecte to #roie logistical s%##ort an #ossi"l) "ear the worst "%rens o! war. The), like m%ch o! coastal 9hina, look to Taiwan !or

inestment an c%lt%re an hae a close aNnit) with the islan. As a res%lt, there are o%"ts a"o%t whether s%ch a #lan co%l "e #%t into action. A$ailed war would pro*pt a 'aiwan declaration o$ independence and a$urther bac2lash against the CCP at ho*e , M%st as the 6a) Fo%rth st%ents o! 11 "erate thee#%"lican goernment !or weakness in the !ace o! !oreign #owers. #ailed wars brought down authoritarianregi*es in )reece and Portugal in 1-, and in Argentina in 1-G. Mveni$ CCP leaders wanted war! it is unli2el% that the POA would oblige. 'opo@cers would see the disastrous i*plications o! attacking Taiwan. 4ilitar% caution

would also guard against the een wiler scenario o$ the use o$ nuclearweapons against Ja#an or the U.S.4E At the height o$ the 'ianan*en protests it a##earsthere was consideration given to the use o$ nuclear weapons in case the "attle tos%##ress the #rotestors rew in o%tsie co%ntries.4 >ut even then! the threats did not appear togain even *ini*al support. Hn an at*osphere in which the *ilitar% isthin2ing about its $uture! the resort to nuclear con$rontation would not*a2e sense.


55/58

No Mcon H*pact

Decline doesnt cause warDrezner 1, 8aniel @. 8re5ner is a #ro!essor o! international #olitics at the

Fletcher School o! Law an 8i#lomac) at T%!ts Uniersit), Rlo"al :conomicRoernance %ring the Rreat ecession,htt#$//m%se.Mh%.e%/Mo%rnals/worlX#olitics/(00/00.1.re5ner.html

The 'nal signi'cant o%tcome aresses a dog that hasnt bar2ed: the e8ect o$the )reat Eecession on crossborder conict and violence. 8%ring the initialstages o! the crisis, m%lti#le anal%sts asserted that the fnancial crisis wouldlead states to increase their use o$ $orce as a tool !or sta)ing in #ower.42 The)oice gen%ine concern that the glo"al economic ownt%rn wo%l lea to anincrease in conictwhether thro%gh greater internal re#ression, iersionar) wars,arms races, or a ratcheting %# o! great #ower conict. Yiolence in the 6ile :ast,"orer is#%tes in the So%th 9hina Sea, an een the isr%#tions o! the ?cc%#)moement !%ele im#ressions o! a s%rge in glo"al #%"lic isorer.

The aggregate data suggest otherwise , howeer. The Hnstitute $orMcono*ics and Peace has concluded that >the average level o$ peace$ulnessin /01/ is appro;i*atel% the sa*e as it was in /00,.43 Hnterstate violence

in #artic%lar has declined since the start o$ the fnancial crisis! as have

*ilitar% e;penditures in *ost sam#le countries. 7ther studies confr*

that the )reat Eecession has not triggered an% increase in violent conict ,

as Lotta Themn\r an =eter @allensteen concl%e$ >7'=he pattern is one o!relative stabilit% when we consier the tren !or the #ast 'e )ears.44 Thesec%lar ecline in iolence that starte with the en o! the 9ol @ar has not "eenreerse. ogers Qr%"aker o"seres that >the crisis has not to date generated

the surge in protectionist nationalis* or ethnic e;clusion that *ight have

been e;pected.4C 7:n =age 134B

'he global econo*% is resilientDrezner 1, 8aniel @. 8re5ner is a #ro!essor o! international #olitics at theFletcher School o! Law an 8i#lomac) at T%!ts Uniersit), Rlo"al :conomicRoernance %ring the Rreat ecession,htt#$//m%se.Mh%.e%/Mo%rnals/worlX#olitics/(00/00.1.re5ner.html'?M /00 fnancial crisis posed the biggest challenge to the globalecono*% since the )reat Depression. During the frst ten *onths o$ the

K)reat Eecession!I global stoc2 *ar2et capitalization plu**eted lower

as a percentage o$ its pre crisis level than during the frst ten *onths o$

the 1-G0s e#ression.1 o%sing #rices in the Unite States ecline more than

twice as m%ch as the) i %ring the Rreat 8e#ression.2 Qanks an other 'nancialinstit%tions lost more than V4 trillion in the al%e o! their holings as a res%lt o! thecrisis.3 The glo"al ecline in asset al%es in 2(( was conseratiel) estimate to"e V2E trillion, or ro%ghl) C( #ercent o! glo"al economic o%t#%t.4 Fie )ears a!terthe start o! the s%"#rime mortgage crisis, concerns a"o%t s)stemic risk were stilleleate.


56/58

The eman !or glo"al economic goernance str%ct%res to #er!orm efectiel) is atits greatest %ring crises. e'ne glo"al economic goernance as a set o! !ormalan in!ormal r%les that reg%late the glo"al econom) an the collection o! a%thorit)relationshi#s that #rom%lgate, coorinate, monitor, or en!orce sai r%les. As 6en5ie9hinn an Jefr) Frieen note$ >The 12 recession "ecame a e#ression largel)7:n =age 123B "eca%se o! the colla#se o! international coo#erationZ the c%rrent

crisis ma) hea in that irection i! international colla"oration !ails.C ?ne o! the#rimar) #%r#oses o! glo"al economic goernance is to #roie #%"lic goosmostim#ortantl), kee#ing "arriers to cross&"orer echange low. An o#en glo"aleconom) lessens the stagnation that comes !rom a 'nancial crisis, #reenting aownt%rn !rom metastasi5ing into a e#ression.0Since the Rreat ecession "egan, there has been no shortage o$ scorn $or thestate o$ global econo*ic governance in #%"lic #erce#tion, #olic) anal)sis, anscholarl) assessment. ;eertheless, a closer loo2 at the glo"al res#onse to the'nancial crisis reveals a di8erent picture. Despite initial shoc2s that were*ore severe than the 1-/- 'nancial crisis, global econo*ic governance

responded uic2l% and robustl% . @hether one looks at economic o%tcomes,

#olic) o%t#%ts, or instit%tional resilience, these goernance str%ct%res eitherrein!orce or im#roe %#on the stat%s +%o a!ter the colla#se o! the s%"#rimemortgage "%""le. These regi*es per$or*ed particularl% well during theacute phase o$ the crisis in the !all o! 2((, ensuring the continuation o$ anopen global econo*%. To "e s%re, there re*ain areas where globalgovernance either $altered or !aile. :en i$ the polic% outco*es have beensubopti*al! the% have not been subpar. Hnternational institutions and$ra*ewor2s per$or*ed contrar% to e;pectations. Si*pl% put! the s%ste*wor2ed9the open global econo*% survived because o$ Kgood enoughIglobal governance.! glo"al economic goernance has worke, wh) has there "een s%ch a wies#reaconsens%s that it has not 6is#erce#tions a"o%t glo"al economic goernance

#ersist "eca%se the Rreat ecession has is#ro#ortionatel) afecte the coreeconomies, a !act that is also the center o! grait) !or commentar) a"o%t the glo"al#olitical econom). 9ommentators "ase in the aance in%striali5e states haeconate national goernance with glo"al goernance. The) hae alsooerestimate the efectieness o! #rior #erios o! glo"al economic goernance.

@h) the s%ste* has wor2ed better than e;pected remains a more o#en

+%estion. @e can tentatiel) concl%e that "oth the #ower o! the Unite States an

the resilience o! neoli"eral economic ieas were underesti*ated %ring the

e#ths o! the Rreat ecession.


57/58

No #ood H*pact

?igh prices encourage better ag invest*entTharas


58/58

A': NMPA

>est studies prove NMPA doesnt cause dela%sDreher & 8e#%t) :ec%tie 8irector o! the Reorgetown :nironmental Law H

=olic) nstit%te. e sere as 8e#%t) Reneral 9o%nsel o! the U.S. :nironmental=rotection Agenc)o"ert, >The =olitical Assa%lt on the ;ational :nironmental =olic) Act,htt#$//www.law.georgetown.e%/gel#i/researchXarchie/ne#a/;:=AUnerSiegeFinal.#!

Finall), the evidence does not support the argu*ent that the NMPA

review process causes inordinate dela%s in decision*a2ing . For

eam#le, studies ") the Feeral ighwa) Aministration F@AI show that

environ*ental reviews ta2e up onl% a uarter o$ the total ti*e devoted

to planning and constructing a *aor highwa% proect! hardl% a

disproportionate co**it*ent !or #roMects that will make #ermanent changes

to the lansca#e. 43 'he signifcant dela%s that sometimes occur in highwa)

proects are generall% due to other causes , such as lack o! !%ning, the

low #riorit) assigne to a #roMect ") the s#onsoring state trans#ortation agenc),or signi'cant local disagree*ents oer the merits o! the #roMect. 44 A

co*prehensive surve% con%cte ") the ;at%ral eso%rces 9o%ncil o!

America o! agenc) ;:=A im#lementation confr*ed that NMPA is not a *aor

cause o$ proect dela%s: Hn none o$ the twelve agencies reviewed during

this stud% did NMPA e*erge as the principal cause o$ e;cessive dela%s orcosts. nstea, the ;:=A #rocess was o!ten iewe as the means ") which a wierange o! #lanning an reiew re+%irements were integrate. 7ther

ad*inistrative and Congressional reuire*ents were so*eti*es citedas resulting in length% dela%s in decision *a2ing, which #ersons o%tsiethe agencies attri"%te to ;:=A. 4C

At worst! its a $ew *onthsMHA - :nironmental m#act Assessments,htt#$//ec.e%ro#a.e%/enironment/eia/eia&st%ies&an&re#orts/eia&costs&"ene't&en.htmPreparation o$ the MHS t%picall% ta2es /G *onths. 'he subseuent stageso$ consultation! review and decision*a2ing *a% ta2e G+ *onths ,e#ening %#on the com#leit) o! the iss%es raise.

Documents

PDI Spending