Obama and the Keystone Pipeline

It was pretty cowardly for Obama to hide behind the State Department's decision that the Keystone Pipeline was not in our national interests. I mean, those guys work for him. No question John Kerry does what he's told. The rest of his speech was even more bizarre. He admonished Congress to pass an infrastructure bill that would create more jobs and long-term benefits for America. Gee, I thought a pipeline was an infrastructure project, that like most infrastructure projects, creates lots of short-term economic activity followed by years of service revenue and added value to infrastructure users, both direct and indirect. Obama also pooh-poohed the effect on energy prices and energy security. Security is enhanced because we have reduced dependence on imports from unstable ares. Without this pipeline we'll need to replace the Canadian oil with foreign oil. And the recent Russian plane crash raises all sorts of questions about the growing risks from ISIS. That Canadian oil may be headed for China now. The oil will still be moved, but it will be moved across territory we don't have real control over. There's really not much effect on the environment either way, and that's the really disturbing thing here. Is Obama such a poor trader he couldn't convince the green lobby to let this one go and save their chits for something that really matters? What does that say for his Iranian nuclear deal?

Public Debt Levels and the Presidential Campaign

Leading up to the 2012 election I wrote about concerns over the structure of federal spending and its effects on total public debt in the US. I was concerned that the administration had built structural spending to 24-25% of GDP, while we had never been able to generate more than 18% of GDP in federal revenues. The good news is that the economic recovery has brought tax receipts up to that 18% level, as well as lowered expenses to the 21% level. So deficits are running 3% of gdp or less. This may be as good as it gets, however. Our public debt is now at 100% of GDP. We can get away with this at zero interest rates, but if rates rise 2% structural spending will increase. Another recession or slower growth could also affect the deficit by increasing social services costs and reducing revenue as a percent of gdp. The good news is that the administration has taken advantage of lower rates to push treasury debt maturities to near record long levels. This will insulate us to some degree from rising interest rates at some point. It would seem to me that the presidential candidates should debate the desired ratio of public debt to gdp. If we want it less than 100%, we are going to have run deficits that are smaller than gdp growth. And how will we go about that? By spending cuts, tax increase, tax cuts. Donald Trump, could you please raise this issue while you're still relevant?