patrick.net

This, to me, is like a cartoon where the character has gone over the edge of the cliff and is hanging, suspended in midair over nothing. Then the good guy hands the hanging guy an anvil or rock or something big and heavy, and then the free fall begins.

Kinduh like that - we were falling anyway, the oil shock just makes it happen quicker.

I'm assuming a second oil shock will affect supply of those who depend on heating oil/NG. Will this affect demand on larger homes (aka McMansions), particularly in colder regions? I also expect shrill screams from Hummer owners @ the pumps. Surfer-X: there is some justice in the world.

Btw, travelling through a rather pricey town of SF Pen. (Hillsborough), we noticed quite a few homes (3000+ sqft) had been recently rennovated--and I mean complete, expensive rebuilds, some still in progress. Anyone care to guess where all that money came from? We also saw an absolute dog of a house, poor maintenance--original everything--for $1.3M

At the risk of invoking more models, there is a useful framework for evaluating an input shock such as this second (or perhaps just one, large multipart event) oil shock: the IS-LM model. Arguments about the legitimacy of Keynes aside, there is general concesus about the "give-and-take" that is necessary when either supply or demand change unexpectedly.

I think that dramatically reduced petrol, heating oil, natural gas supplies will cause longer-term inflationary pressures, which put pressure on the Fed to raise rates to control inflation. But, there is a problem: as the Fed reduces the money supply, we risk a conflict between Fed policy and fiscal policy--which is currently increasing spending rapidly. One force decreases aggregate demand, the other increases aggregate demand.

Add in the effects of a weakening dollar, and the Fed's ability to affect the economy is reduced (with rates). Will the Fed resort to changing the reserve requirements--something it hasn't done in a long time? Will this even work, no one is really quite sure.

I fear that the Fed will actually halt rate increases as it attempts to forfeit inflation in favor of fighting recessionary pressure. Or worse, the Fed actually cuts rates. This would worsen the RE bubbles, for a short while at least, making the correction that much worse.

What keeps me up at night is that all this could lead to a stagflationary cycle similar to, or worse than the 1970s-early 80s round. Low growth or recession coupled with unchecked inflation. This is something that is very hard for fiscal and Fed policy to control without massive pain. That pain will include a dramatic RE correction--and not all-at-once, but over a long, terrible period of time.

I don't think we'll end up like Japan because I don't generally think the US system is prone to liquidity-traps like that bedeviling Japan for the past 2 decades. In the US, cutting rates pretty much ensures credit binges. Such credit use isn't bad so long as we can grow productivity and output fast enough to make up for the cost of debt--something that used to be taken for granted but in the new global economy is a gamble.

Randy H . . .
What keeps me up at night is that all this could lead to a stagflationary cycle similar to, or worse than the 1970s-early 80s round. Low growth or recession coupled with unchecked inflation.

I agree 100% that this is the likely outcome.

Oil Shock + closing of Housing ATM will have some effect.

Well, I read that Warren Buffett cashes his. He was a non-poor last time I checked.

I’m curious to know why you think the fed is going to halt rate increases.
Judging from their last statement, it looks like we’ll have at least 2 further rate increases.

Same. Neutral rate should be around 4.5% - 5.5%. They need that to fight the coming recession.

Hey ya'll, I have admin rights now and will get the next thread.

Hey ya’ll, I have admin rights now and will get the next thread.

Cool! I cannot wait.

Hey, I applied for my admin rights! Where are they!???? Am I too radical? Too ill-tempered. Poop.

John Haverty wrote . . .
“Government entitlements for the non-poor at retirement are not helping things, if Mister Wilson has enough money to buy an RV, he doesn’t need SS checks.”

RyanM beat me to this. . .
"If I’m coerced into paying $ into SS, you’re damn right I’m going to cash my tiny SS checks when I’m retired."

John, I guess I agree with Ryan, minus the jab.

If "Social Security" is, by your definition an "entitlement" rather than what I was always taught it was - a return of my forced savings - then if it comes about that they pass laws so that Mr. Wilson can't get SS $, can we stop calling it social security and start calling it "welfare"? Because that's what it would be at that point.

In essense, we'd all be forced to pay money throughout our lives to support anybody who is too poor to support themselves when they retire.

There are apparently many natural gas platforms in the area that Rita is expected to make landfall. Rita also seems to be weakening. If the platforms just shutdown temporarily, then I guess only small spike in natural gas. If platforms are severly damaged...causing extended shutdown...then more prolonged price impact, I suppose.
Regarding home heating: my impression is that Katrina affected heating oil-based, while Rita has more potential to affect natural gas-based...but this is based on limited data...anyone else clarify?
But basically, it looks like an unusually cold winter would really suck (more so and for other reasons than normal).

OT: any thoughts, investment wise, on BMHC (building materials)?
They sure have had a nice 2 yrs:
http://finance.yahoo.com/q/bc?s=BMHC&t=2y&l=on&z=m&q=l&c=

Ominous series of CL ads:

http://www.craigslist.org/cgi-bin/search?areaID=1&subAreaID=2&query=&catAbbreviation=rfs&minAsk=487000&maxAsk=489000&neighborhood=

I hope this does, and does not, become too common in the near-distant future (yeah, I know, "wtf?").

dangit need to use tinyurl.

I’m curious to know why you think the fed is going to halt rate increases.
Judging from their last statement, it looks like we’ll have at least 2 further rate increases.

I think the Fed will follow through with 2 more rate hikes, as you say. However I question whether (a) this will be enough. That depends upon the severity of supply disruption that Rita causes, and the yet to be accounted for Katrina losses. Also, we haven't seen any real fall-off in demand (mainly for petrol); however I think demand adjustments tend to lag the events that cause them quite a bit..and I have seen lots of new hybrids on the road lately. (b) I worry about the threat to crude supply which existed before Katrina, mainly in rising instability in Iraq and looming conflict with Iran over their nuclear program. The Economist stated that demand for crude had exceed the ability of Saudi Arabia to single-handedly control price, which is a bit unsettling.

Moreso, we have a new Fed leadership coming in soon, and we have mounting political pressure on the Fed to be more reactionary. We saw some of this after Katrina with all the "compassionate pause" talk. Of course, AG didn't give in, but will the new governor have the clout to buck the administration and Congress when he has to? If Rita seriously disrupts supply, there will be enormous pressure put on the Fed to pause rate hikes, because politicians get elected on jobs data, not on inflation data.

Just my 0.02USD, which ain't worth much these days.

Surcharges are already being added to airplane fares and trucking companies are also raising rates due to higher gas prices. I've said it before, higher gas= higher cost of everything It's not the cost at the pump I'm worried about. It's the cost of everything else. Also building materials are going up in cost due to the first hurricane, the second one ought to only exacerbate this, so that means more expensive home renovations. I think all of this will combine with the higher interest rates to bring the housing market down quicker than would happen otherwise.

Randy H,

I think the new Fed chief will have enough clout to continue to raise interest rates. By next year, I think inflation will be big enough that everyone will feel it. Once the mainstream media starts howling about it, there won't be as much pressure on the Fed to avoid recession at the risk of hyper-inflation.

Also, given that oil refining capacity is going to drive fuel prices in the US, does anyone see the price of light sweet crude (raw materials) going down? What's the impact of these hurricane's on the US's ability to pump crude out of the platforms around the Gulf?

Stagflation, criminal charges against government officials (ie: Plame, Abramoff investigations), widespread dissatisfaction with a non-essential war abroad, poverty on the rise, oil through the roof, economy through the toilet. 2005=1973.

Malaise forever!

Prock,

I agree on the stagflation risk. The price of light sweet going down is mainly because Saudi increased production quite a lot in the last few weeks and they convinced OPEC to also temporarily increase output. Also, the release of strategic reserves in US and Europe have pushed all crude down, including Gulf crude. But Iran is threatening to break ranks with Saudi (mainly because of the threat of UN sanctions over their nuke program), and the worry is that Saudi can no longer drive prices down effectively through supply manipulation without the cooperation of Iran. And, much of Iraq's production is still unreliable.

I hope you're right about the media focussing on inflation. I have no faith in the media. If there is a recession, they'll be howling about the job losses and we'll see Lou Dobbs musing on why the Fed governor is still raising rates while millions of Americans are unemployed.

Unemployment == a very tangible hardship, which everyone fears
Inflation == an invisible tax which few really understand

Ryan M -
This is exactly why I'm a libertarian.

I really don't care if my neighbors live like fools - I just don't want to pick up the tab.

One of my fundamental complaints about pure liberalism/socialism is that it entirely ignores the real human behavior that occurs. It's as if folks who believe in these systems have never interacted with their neighbors.

If you set up SS so that those who are not "well off" get money while those who are "well off" do not, then you have done two things for sure . . .

Created a huge incentive for people to live slipshod lives.

Heck, if I get to eat from the fruit of my neighbor's tree when I retire, why should I tend to my own tree?

Created a disincentive for people to be productive. I am already at the point where I'm working toward needing as little as possible. 2 reasons 1-I think it's the way to live. and 2.- I'm sick of supporting my neighbors. As we go further and further into socialism, the amount of money you need from each productive person increases. At some point, folks start to look at their paychecks and say, "screw it." In other words, why kill yourself to work harder/longer/educate yourself when the extra 50k in salary amounts to 18k after all applicable taxes?

This whole thing reminds me of my neighbor back in DC.

Great guy - really liked him.

He worked for the government - 35 hours a week - home by 3:30 every day. Decent money - great benefits and job security. Then there's me - working 70 hours a week and so on.

Hey, I think the guy had a great lifestyle. I don't mind that at all.

But if the guy has little or no money when he retires, that was his choice to a large extent, and it takes a special kind of leftist to not clearly see that. But see that they won't. They'll look down the street and say, "look how much escape from DC has in the bank. Why should he get anything?"

Escaped from DC,

I wish there was a national party which effectively communicated our common interests (although I take issue with the overloaded term 'liberalism'. liberalism of some things is good, and not at all political; capital markets for example). However, the Libertarian party, as it were, is not the solution. These guys are so unpragmatic and oft hypocritical that even Ayn Rand despised them. It's actually quite hard to be consistently ideologically libertarian, because it requires a consistency of philosophy which is unfortable for many people. I've met lots of self-described libertarians who are actually quite "nationalist" when it comes to applying differential treatment to cultural and religious issues. After all, nationalism and socialism aren't really all that far apart except for some abstract economic beliefs, both camps seek to engineer society to their own self-interest.

Why don't you found a new party? I think the time is long overdue for free-thinkers to come together and break through this vacuum of leadership and entrenchment.

I think the time is long overdue for free-thinkers to come together and break through this vacuum of leadership and entrenchment.

How about The Crash Party or The Party Crasher or something like that? ;)

tsusiat,

I echo your concerns but I think you may underestimate the amount of real growth China has left in it's "Great March". So long as China continues to grow, and they are willing to sacrifice their capital markets to the controls necessary to keep their currency in line with the dollar, they can keep playing this game for decades. The music will stop, but not anytime soon short of something unexpected like a big war.

As to oil's effect on the dollar, there is increasingly oil trade in Euros, although I doubt China will do this to any great degree anytime soon. But as the Euro rises as a dual reserve currency and denomination of oil, there will be increasing capital outflow from the EU which will offset some of the US outflows. (Of course, this will require the US face some fiscal discipline, but that's not a bad thing)

Tsusiat - To answer . . .with your thoughts in brackets . . .

[ask 75% of Canadians if they mind paying higher taxes for our medical system, which costs less overall and is more efficient on a national basis then yours, and what do you think the answer is?]

I won't debate you on relative health care issues or what a majority of Canadians will say - I don't know. But try this . . . You know how we spot the Canadians on the beaches of Maine? They're the ones with the big ragged scars.
Even if I take you word for it, however, I still disagree with you. What you're proposing is pure socialism. We all throw our money in a pile, and then we take what we need. Ther person who chooses, NOT FORCED TO, but chooses to not work gets a free ride.

[Are you trying to say that all those people are lazy and living off the fat of their brothers?]

No. I'm trying to say that the abusers of socialist systems make the systems fall apart.

[Hey, we pool our money and pay for it together - what’s wrong with that - it’s available to everyone, so it’s not a matter of supporting those who don’t contribute.]

This point makes no sense. If some don't contribute and they use it, then it is a matter of exactly that.

[In fact, studies consistently show it is the middle and upper classes in Canada that make the most use of the medical system - so nobody is taking advantage of anyone.]

This logic is really weak. First, the middle and upper classes pay for virtually all of your health care, right? Second, the "lower" class pays for none or little. If they pay for none and they use it, then they are taking advantage of the system IF their actions are a choice.

[In the US, on the other hand, it is thinking like yours that fuels an ongoing mindset of class war, that really puts the blame on the unsuccessful for being unsuccessful.]

Look. Real simple. My neighbor was not "unsuccessful." He CHOOSE to not work more. If you don't see a difference there, then that is our point of contention.

[It’s all their fault for not pulling themselves up by their bootstraps in an era of million dollar housing and $7 an hour service jobs.]

I worked 7$ an hour jobs for years. I begrudge no man an honest days labor. It is not the hard workers who concern me. It is the lazy slobs who populate this world who are happy to take the free ride.

[By your logic, anyone smart enough should have a high paying job or it is their fault they need help later]

Nothing I wrote can be reasonably construed to mean this.

[And since when is earning $50,000 and serving the needs of the public something to be dismissed out of hand?]

I didn't dismiss anything out of hand. I said it was his choice. As for "serving the public." C'mon. Are you a govt. worker up there?

"Would you prefer there be no government employees at all? Or maybe they should work for $7/hr. Or better yet, how about for free?"

How about this. How about when I go into the DMV it doesn't look like time slowed down.

Oh yeah, right, you wouldn’t be one of those people who on the other hand complains about a lack of federal responsiveness to the natural disaster du jour would you?

Stirring the pot.

I hit some buttons and all that posted .. .. to finish

"Oh yeah, right, you wouldn’t be one of those people who on the other hand complains about a lack of federal responsiveness to the natural disaster du jour would you?"

NO! In fact, I expect nothing less than excellent ineptitude from the governement.

Unlike you, however, I don't think you can cure the disease of government ineptitude with money.

Any oil trader in this blog?

Escaped from DC,

LOL! Righteous indignation, I love it!

"I won’t debate you on relative health care issues or what a majority of Canadians will say - I don’t know. But try this . . . You know how we spot the Canadians on the beaches of Maine? They’re the ones with the big ragged scars.
Even if I take you word for it, however, I still disagree with you. What you’re proposing is pure socialism. We all throw our money in a pile, and then we take what we need. Ther person who chooses, NOT FORCED TO, but chooses to not work gets a free ride."

Who cares what a scar looks like? Are you trying to imply cosmetic appearance is more important than, say, universal medical care? Are you kidding?

Why is it BTW that socialistic Canada is the only G7 country to run a fiscal surplus for the last 7 years?

Oh yeah, don't forget the US socialistically pools its money to run a world dominating military, so they can't afford basics found in other industrialized countries all over the world, like a universal health care system.

Why is it that pooling money to fund your military adventures is an unquestioned obligation on Americans, and is not equated as exactly the same type of activity as pooling money to fund anything else, but pooling money to pay for health care is somehow "socialistic"?

Are you saying all that money being pooled to run your military was not collected from your entire population through taxes, and therefore is causing a tax on the rich, who pay more, to provide freedom to the poor, who pay nothing?

Oh yeah, I forgot they're being recruited and in some cases paying with their lives - so maybe the tax isn't higher on the rich.

Gotta love Michael Moore asking how many congressman were lobbying their sons to sign up for a tour of duty in the sand.

"If they pay for none and they use it, then they are taking advantage of the system IF their actions are a choice."

Your comments about your bureaucratic neighbour are certainly unkind. It is easy to harp from the right wing about how ineffectual or inefficient government is, but what is your solution?

And how does your detailed, realizable solution support or not support globalization and multinational corporations with a vested interest in stability and the status quo?

Are you implying all government employees are lazy? Would that include military people in Iraq, who of course are federal employees? How about all teachers, firefighters and policemen? Are they all lazy and settling for second best and don't deserve any support from society, because their wages are probably lower than $50,000 a year?

Let me see, it's all just their choice to take those low wages, as opposed to for instance, a love of their work, that leads people to these careers?

And of course, every one of them has the opportunity to earn more money, right? Doing what, real estate speculation? Renting "investment" properties, selling freelance writing to blogs?

How is that possible, you are talking about an even BIGGER credit bubble if such a thing was to even feasible, because it could only be achieved through further CREDIT!

Meanwhile all entrepreneurs understand the darwinian nature of society, and are entitled to keep all the money they have accumulated by any means from anyone?

BTW, society and civilization at all stages of development from ancient times until now are all about pooling resources for the advantage of all. When the "rich" in a society start to experience a complete disconnect and disregard for this basic fact, the eventual outcome is one of three things - chaos, dictatorship, or the guillotine.

Which outcome do you prefer?

Randy H,

here is an interesting link on China's economy - in much the same way americans feared Japan in the late 80s, the financial behemoth of China is to some degree stacked on a house of cards, if you understand the implications of this line of thought....

http://english.epochtimes.com/news/5-9-8/32097.html

Personally, I think high oil prices are going to devastate most of the developing world, unless they are lucky enough to possess some reserves of their own and can make some positive use of the new income.

A few words on oil shortages in China...

http://english.epochtimes.com/news/5-8-23/31512.html

China falls into this group of vulnerable countries, in my opinion, and this leads to such disturbing speculation as a chinese plan for nuclear war...

http://english.epochtimes.com/news/5-9-11/32195.html

Cheers,

tsusiat

It is much easier to implement socialistic policies in Canada because:

1) It is very rich in natural resources
2) It has low population density
3) Its citizens are highly educated

Most successful "socialist" countries (e.g. Sweden) have these properties.

BTW, tsusiat, you can get a better understanding of Escaped from DC by going to resistyourbiology.com. It is a very informative and interesting site.

Peter P,

thanks for the link. After a little reading at the above mentioned site, I now understand the basic thesis for Escaped from DC's postings.

Basically, the stuff written there all boils down to blaming the victims. I quote:

"You chose to live in New Orleans, which has been hit be several hurricanes, which is below sea level, and which is known to all residents of New Orleans to be a particularly susceptible hurricane target. For a few bucks in bus fare, you could have moved almost anywhere in the U.S.."

Let me guess, a similar analogy would be, you chose to live in a trailer park, which are known to be susceptible to tonadoes, so when your trailer got torn apart -IT WAS ALL YOUR FAULT.

Or by extension, you chose to live in an american city, which are known to be targeted by Chinese and Russian nuclear warheads, so when you were vaporized - IT WAS ALL YOUR FAULT.

You were the wildebeest on the edge of the herd, the easiest one for the lions to get to, so when they killed you and tore you apart - IT WAS ALL YOUR FAULT.

This type of blame the victim psychology is most unhelpful to a smoothly functioning civil society.

Somebody has to be willing to help out others for some reason other than immediate self interest or remuneration, or all human interaction is reduced to darwinian struggle. Is that preferrable?

Perhaps in some isolationist world views, that's the case.

Personally, I prefer a little socialism.

Yustas, that's exactly what you see in Vancouver's West End. Some people believe the suburbs are set to die with the boomers, and all that outpriced real estate "out there will be worthless" when our car-driven petroleum frinedly society gets too expensive to maintain. How would you like to heat a 4,000 square foot house with natural gas in Canada or the NE US if the price of natural gas was 4 or 5, even 10- 20 times higher than now? Check this link out for a very thorough explanation of this problem:

http://www.globalpublicmedia.com/articles/383

Of course, maybe there's nothing to worry about...

tusuiat, isn't the West End very expensive? I love Vancouver.

I think condo is a very sustainable form of housing. We can afford more open space with the same population density, more density with the same space, or a combination of both.

Tsusiat -

I've met you many times before.

First, I'm no right winger. Why do you paint me as such? Is that how you approach every argument? You place the opposition in the Rush Limbaugh seat and take out your script?

Second, your quote from RYB.com is a cherry pick and does not represent what is being said there.

I say the federal government is swollen and inefficient, you say

"so every government worker is lazy?"

That argument type, which I've seen so many times, I call "move it to the extreme." It's a method people use to avoid addressing a difficult point.

It's like you say to your wife, "jeez babe, do you think when you get the mail you can put it on my desk and not on the back of the couch where it can fall off?" She replies, "so I can't do anything right?"

No, of course I don't think every government worker is lazy. Why would you say such a bizarre thing? I think that government as a system is horribly inefficient, and that the bigger it gets, the worse it gets. Some employees work hard, some don't, but very few if any have the proper motivation to do their best.

RYB.com says that personal responsibility has got to be at the forefront of every discussion of human behavior. Without it, everything becomes a race to the bottom.

Your perspective seems to be "everybody is a victim, and there's nothing some people can do to better their condition."

I've met you many times.

You're the kind of person who looks at me, what I've done and what I have and you say, "you're a lucky guy."

I think socialism is a beautiful theory that is absolutely impossible to implement in a world with stupid human animals.

My example of my neighbor is straightforward. He chooses to work at a level well below what he is capable of. I do not have any problem with that, but I do not think that he should demand that I pay more for his retirement than he does.

To this you write - "your comments about your neighbor . . . are unkind."

How can a simple description of what is, be unkind? I said nothing other than what he chooses to do. What you seem to object to is my stating the situation - I didn't create it, I just pointed it out.

You have assumed so much.

Why do you talk about the American military complex as if I support it?

Why do you talk about charity to the needy as if I don't support it?

Why do you say I blame the victim? I hold the victim accountable for ems own decisions. It doesn't mean that I have no concern for them. It simply means that I will not ignore bad decisions that lead them to their current state. Why do you think that is wrong?

The people I have met who talk like you all have one thing in common . . .

They think that there is a system that keeps people down. They think that most people are victims of their environment. They think that all people who have something have screwed somebody to get it.

In short, the people I have met who talk like you are the ones who have the class envy and who propagate the class warfare.

You say I blame the victim. I say you absolve everybody of blame.

So here is the central point on which we disagree, I think. Please tell me whether you think this is our point of disagreement (or at least one of them).

The basic tenet of socialism is "each gives according to his ability and each receives according to his need."

Given that,
I believe that most people will take at least according to his need, but will give less than his ability.
You believe that most people will give according to his ability, whether or not he takes.
Is that right?

John, I don't understand your point. Can you clear it up? Are you simply saying that there is no money in a SSFund somewhere?

People, this is going to be my best post in a while.

If you haven't read Tsusiat's posts, above, then you should read them before reading this.

Tsusiat - First, I have no ill feelings toward your country. I'm no patriot and I don't like regionalism.

Second, I was eventually going to tell you that, "wait and see, no socialist system can ever work." But I don't have to because . . .

I did some quick research on Canada and here's what I found . . .

Prior to recently, all Canadians were FORCED to used government health care.

This means that not only was the insult of taxation imposed, but the injury of being forced to use the government system was opposed on top of that.

Hey, maybe what we've got here is broken, but, in my opinion, puttin a gun to somebody's forehead and saying "you can't use your own doctor" is no way to fix it.

Recently, however, and this is a beautiful thing of timing, the Canadian Supreme Court heard a case about whether it was Canada's version of constitutional to force people to use government health care when that system had a huge waiting list.

Me? I've never had to wait for basic health care. The poor folk here? Them neither.

Here's some snippets from the case . . .
"“where the government is failing to deliver health care in a reasonable manner, thereby increasing the risk of complications and death,” the prohibition of private health insurance is unreasonable and violates Charter Rights."

"They rejected the argument that allowing Canadians access to a private alternative when their health is jeopardized by long wait times would undermine the public system and concluded “life, liberty and security of the person must prevail.”"

"Chief Justice Beverley McLachlin pointed out “Access to a waiting list is not access to health care.”"

That don't make Canadian health care seem so great, eh?

"Canadian governments now spend far more per citizen for health care than 10 years ago with Ontario, as an example, devoting 46 per cent of its entire budget to health care, up 25 per cent from 1985. Despite such increases the system has improved little, if at all, particularly with respect to waiting lists."

46 per cent? YOUCH! That's gotta be killing the standard of living up there.

"Out of 23 advanced countries, Canada ranks 16th in the number of physicians per 1,000 population, with just 2.1 physicians for every 1,000 Canadians."

"Overall, Canada ranks 15th out of 24 advanced countries in access to MRI and 17th out of 23 in access to CT scanners and eight out of 22 in access to radiation machines. In the developed world, we rank 16th in the rate of infant mortality and 14th in life expectancy. In the world’s 30 most-developed countries, 28 - including Canada - dictate the right to health care regardless of the ability to pay. Of those we tie with Iceland as the highest spender on health care when adjusted for age, but rank near the bottom in access to technology and physicians with Canadian patients waiting longer then patients in most of these countries."

Gulp!

Finally, I point out that, because of America's disgusting corporate dominance of its own people, America heavily subsidizes the cost of medicine in Canada. That's going to end soon enough, however, and then Canada's costs are going to go up.

So, Tsusiat, the numbers are all there. The supreme court decision is there. In short, the demonstrable effect of socialization is there. 47% of a budget on health care?

That's a bigger pig than even I could have imagined.

Socialism always fails. It's only a question of when.

One last thought. Relative to the rest of the world, I'd say the US would be a very tough place to institute socialism because the proportion of freeriders in the US would likely be higher than in Sweden, where, ironically, I lived.

I wonder if the difference's in opinion on this thread have more to do with birthright or politics.

Does that make sense? What I am getting at is that I was brought up with the John Wayne ideal of American individualism. I was taught that the quality of your life is what you make of it. My parent's favorite saying was "The harder you work, the luckier you get." We've always believed that a good old fashioned work ethic is what it takes to make it, and I still believe that. And I think that is so inherit in the American mindset; you know, the American dream of the white picket fence, yours for the taking if you work hard enough for it.

So I think the ideals that go with socialism tend to go against the grain for most American's. And the ultra liberal, the one's who are looking for more government intervention and support, tend to be looked upon by distain by those who feel we should be able to pull ourselves up by our bootstraps and forge ahead.

Perhaps the Canadian philosophy is different and you've been brought up with a different set of ideals. Either way, I doubt we'll be able to change eachother's ideology. I like the idea of self-determination, I think I always will.

I've known people who lived in Germany who came to the U.S. whenever they needed health care because they knew the quality of care here is so much better.

Btw. Michael Moore doesn't speak for all American's-- not even close.

Being my normal self, I feel compelled to point out examples of socialist systems that have worked. First, it is important to draw a distinction between the economic system of socialism from the political system of democracy. It is entirely possible for a democratic socialism to exist, just as it is possible for capitalist facism to exist. We have ample examples of both in the 20th century.

Basically, it's as Peter P pointed out, small, homogenous, highly educated populations which are resource-rich and geographically fortunate tend to succeed quite well as socialist democratic societies, whereas market capitalism (US style) would be a disaster in most these nations because they lack the lower labor classes.

Sweden, The Netherlands, Belgium, Germany (pre re-unification), much of the rest of Scandanavia, Luxembourg, Switzerland and Austria. All of these countries are quite socialist compared to US/Anglican style market capitalism, and most have posted higher per capita GDP, GDP growth, and standard of living than the US (except Germany post re-unification, which ended the German Economic Miracle). Even France and later Germany succeeded very well with heavily socialist systems until such time as their populations began diversifying.

Now, I think socialist economics is dead wrong for the US, and for much of the rest of the world. But this doesn't mean it's wrong for everyone. And, if you are consistent with your Libertarian ideals, then you will recognize that each nation has the right to determine its own course for its own peoples. But, socialism is not anti-democratic, it is not anti-christian (or whatever the reigning theism claims), it is not communist (which is a political form of government), and it is not automatically doomed to failure...and likewise market capitalism is not guaranteed to succeed. If you need evidence of this, read Stiglitz' book and witness the 20+ nations destroyed by IMF forced premature free-market capitalism that they weren't ready to handle.

Michael Moore suffers from the same issues as Rush Limbaugh.

SactoQT - are you female?

You know, funny that I never thought of the whole individualist thing as an American thing. Maybe you're right.

I met an older woman from Ireland and she was absolutely the biggest "it's not my fault" person I ever met. She thought everything was a conspiracy to keep people down. It was really rather bizarre. She worked for several years in retail making low wages. I suggested that maybe she should go back to school and get some training in something else. "No, they would just discriminate against me because I'm older."

I gotta tell you, good workers are so few and far between, when I found one, I'd hang on to em like they were a life preserver - I didn't care what they looked, who they had sex with - are you kidding me? You mean they won't screw up every fifth thing? I'm keepin em. I mean, really. The best cure for racism and xenophobia is having to deal with some lazy slob who looks and sounds just like you.

I’ve known people who lived in Germany who came to the U.S. whenever they needed health care because they knew the quality of care here is so much better.

I know Germans, and even moreso Austrians, who do the opposite.

Some procedures in the US are the best in the world, but these tend to be complicated, technology-heavy operations which rely on state-of-the-art research and technique. For everyday ailments, I have had much better experiences in France, Germany and Austria. I've lived in all these countries extensively, and would take their every-day practitioners and health-system over the average American experience any day. If I needed a triple bypass, I'd fly back to the US.