mfioretti: pensions*

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  1. Debt is a key factor in creating an economy that operates using energy.

    A generally overlooked problem of our current system is the fact that we do not receive the benefit of energy products until well after they are used. This is especially the case for energy used to make capital investments, such as buildings, roads, machines, and vehicles. Even education and health care represent energy investments that have benefits long after the investment is made.

    The reason debt (and close substitutes) are needed is because it is necessary to bring forward hoped-for future benefits of energy products to the current period if workers are to be paid. In addition, the use of debt makes it possible to pay for consumer products such as automobiles and houses over a period of years. It also allows factories and other capital goods to be financed over the period they provide their benefits. (See my post Debt: The Key Factor Connecting Energy and the Economy.)

    When debt is used to move forward hoped-for future benefits to the present, oil prices can be higher, as can be the prices of other commodities. In fact, the price of assets in general can be higher. With the higher price of oil, it is possible for businesses to use the hoped-for future benefits of oil to pay current workers. This system works, as long as the price set by this system doesn’t exceed the actual benefit to the economy of the added energy.

    The amount of benefits that oil products provide to the economy is determined by their physical characteristics–for example, how far oil can make a truck move. These benefits can increase a bit over time, with rising efficiency, but in general, physics sets an upper bound to this increase. Thus, the value of oil and other energy products cannot rise without limit.

    Research involving Energy Returned on Energy Investment (EROEI) ratios for fossil fuels is a frequently used approach for evaluating prospective energy substitutes, such as wind turbines and solar panels. Unfortunately, this ratio only tells part of the story. The real problem is declining return on human labor for the system as a whole–that is, falling inflation adjusted wages of non-elite workers. This could also be described as falling EROEI–falling return on human labor. Declining human labor EROEI represents the same problem that fish swimming upstream have, when pursuit of food starts requiring so much energy that further upstream trips are no longer worthwhile.

    If our problem is a shortage of fossil fuels, fossil fuel EROEI analysis is ideal for determining how to best leverage our small remaining fossil fuel supply. For each type of fossil fuel evaluated, the fossil fuel EROEI calculation determines the amount of energy output from a given quantity of fossil fuel inputs. If a decision is made to focus primarily on the energy products with the highest EROEI ratios, then our existing fossil fuel supply can be used as sparingly as possible.

    If our problem isn’t really a shortage of fossil fuels, EROEI is much less helpful. In fact, the EROEI calculation strips out the timing over which the energy return is made, even though this may vary greatly. The delay (and thus needed amount of debt) is likely to be greatest for those energy products where large front-end capital expenditures are r
    https://ourfiniteworld.com/2016/05/12...s-story-what-other-researchers-missed
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  2. An exclusive investigation by reported.ly has traced the manufacture and shipping of bomb components from the European Union to the United Arab Emirates, and also discovered the use of bombs made by the European manufacturer in attacks by the Saudi-led coalition in Yemen, where potentially unlawful civilian deaths have been documented. The Germany-based manufacturer of the bomb components, Rheinmetall AG, is a publicly traded company whose major shareholders have included a host of US financial firms, as well as the New York state pension fund, Virginia’s 529 college savings program and the sovereign pension fund of Norway.

    Through their investments in Rhinemetall, these institutions are profiting off the sale of bombs currently being dropped on Yemen. And depending on your 401k, pension or college investment plan, you might be profiting as well.
    https://firstlook.org/reportedly/2015/06/24/blood-money-italy-bomb-yemen
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  3. Carlsbad offers its police and firefighters a ’3-percent-at-50′ retirement plan, meaning that emergency services workers who retire at age 50 can get 3% of their highest salary times the number of years they have worked for the city. City officials have said that in Carlsbad the average firefighter or police officer typically retires at age 55 and has 28 years of service. Using the 3% salary calculation, that person would receive an annual city pension of $76,440.”

    Who are America’s fastest-growing class of millionaires? They are police officers, firefighters, teachers and federal bureaucrats, who, unless things change drastically, will be paid something near their full salaries every year–until death–after retiring in their mid-50s. That is equivalent to a retirement sum worth millions of dollars.

    If you further ask how much salary it would take to live, save and build a $2 million stash over a 30-year career, the answer would be somewhere close to $75,000 more than the nominal salary, if you include all the tax bites associated with earning, saving and investing money.
    http://www.forbes.com/forbes/2010/062...-rules-millionaire-cop-next-door.html
    Tags: , , by M. Fioretti (2014-05-22)
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  4. If you support GMO labeling, eat organic food and avoid GMOs in your diet as much as possible, you might be surprised to learn that Monsanto has been hiding in your retirement fund, 401K or mutual fund all along. Unfortunately, if you, your family or your friends own any of these investments, you may be profiting from Monsanto’s toxic products!
    http://fooddemocracynow.org/blog/2014...anto_stock_plunge_Divest_Monsanto_Now
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  5. Looking for the fastest-growing metropolitan areas in the United States? Follow the fracking – or, alternatively, search for the top-rated golf club brunches on Yelp. The most recent U.S. census data, measuring urban growth between July 1, 2012 and July 1, 2013, showed that oil boomtowns and Southern retirement communities now get to sit at the popular table. The irony here, of course, is that there were never more unlikely candidates for said table than The Villages, Fla., or Fargo, N.D. This list paints a pretty bizarre picture of America’s future, but at least it’s interesting.

    A couple of cities on this list – Austin, for example – actually seem like fun places to live for young people, but what’s most striking is that with the exception of The Villages, all of the top spots are filled by oil towns. That’s no coincidence. Last July, the New York Times published a study examining social mobility in metro areas across the United States. The places of greatest economic opportunity, according to the results, were concentrated in oil-rich regions: North Dakota, eastern Montana, western Texas.
    http://grist.org/news/oil-workers-and...tion&utm_medium=rss&utm_campaign=feed
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  6. America’s overall retirement system is in big trouble. There’s just one part of that system that’s working well: Social Security. And this suggests that we should make that program stronger, not weaker.

    Before I get there, however, let me briefly take on two bad arguments for cutting Social Security that you still hear a lot.

    One is that we should raise the retirement age — currently 66, and scheduled to rise to 67 — because people are living longer. This sounds plausible until you look at exactly who is living longer. The rise in life expectancy, it turns out, is overwhelmingly a story about affluent, well-educated Americans. Those with lower incomes and less education have, at best, seen hardly any rise in life expectancy at age 65; in fact, those with less education have seen their life expectancy decline.

    So this common argument amounts, in effect, to the notion that we can’t let janitors retire because lawyers are living longer. And lower-income Americans, in case you haven’t noticed, are the people who need Social Security most.

    The other argument is that seniors are doing just fine. Hey, their poverty rate is only 9 percent.

    There are two big problems here. First, there are well-known flaws with the official poverty measure, and these flaws almost surely lead to serious understatement of elderly poverty. In an attempt to provide a more realistic picture, the Census Bureau now regularly releases a supplemental measure that most experts consider superior — and this measure puts senior poverty at 14.8 percent, close to the rate for younger adults.

    Furthermore, the elderly poverty rate is highly likely to rise sharply in the future, as the failure of America’s private pension system takes its toll.
    http://www.nytimes.com/2013/11/22/opi...n-expanding-social-security.html?_r=0
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