Professional Documents
Culture Documents
LouGie’s
Economy Disadvantage
Economy Disadvantage...................................................................................................................................................1
***1nc’s***....................................................................................................................................................................4
Economy 1nc...................................................................................................................................................................5
Economy 1nc...................................................................................................................................................................6
Budget 1nc (Emissions)..................................................................................................................................................7
Budget 1nc (Emissions)..................................................................................................................................................8
Regulations 1nc...............................................................................................................................................................9
Regulations 1nc.............................................................................................................................................................10
Business Confidence 1nc..............................................................................................................................................11
***Uniqueness***........................................................................................................................................................12
Economy Up.................................................................................................................................................................13
Economy Up.................................................................................................................................................................14
Economy Up.................................................................................................................................................................15
Economy Up: Rebounding............................................................................................................................................16
Business Confidence High............................................................................................................................................17
A2: No Recessions........................................................................................................................................................18
***Uniqueness: Sectors***..........................................................................................................................................19
Energy Prices High.......................................................................................................................................................20
Gas Prices High.............................................................................................................................................................21
Oil Prices High..............................................................................................................................................................22
Oil Prices Down............................................................................................................................................................23
***Links***..................................................................................................................................................................25
New Energy Policies.....................................................................................................................................................26
Energy Efficiency..........................................................................................................................................................27
Energy Efficiency Hurts Small Businesses...................................................................................................................28
Carbon Tax....................................................................................................................................................................29
Coal Links.....................................................................................................................................................................30
Cap and Trade Hurts Economy.....................................................................................................................................31
Cap and Trade Hurts Competitiveness..........................................................................................................................32
Cap and Trade Hurts Consumers..................................................................................................................................33
Tradable Permits Hurt the Economy.............................................................................................................................34
Tradable Permits Hurt Small Business..........................................................................................................................35
Subsidies Hurt the Economy.........................................................................................................................................36
Banning Fossil Fuels Hurts the Economy.....................................................................................................................37
Ethanol Regulations Hurt Economy.............................................................................................................................38
Stopping Warming Hurts the Economy........................................................................................................................39
Stopping Warming Hurts the Economy........................................................................................................................40
***Budget***...............................................................................................................................................................41
CAFÉ Link....................................................................................................................................................................42
RPS Links.....................................................................................................................................................................43
Nuclear Power Links.....................................................................................................................................................44
Regulation Links...........................................................................................................................................................45
Emissions Links............................................................................................................................................................46
***Regulations***........................................................................................................................................................47
Regulations....................................................................................................................................................................48
Regulations Hurt Small Business..................................................................................................................................49
Regulations Hurt Consumers........................................................................................................................................50
Regulations Snowball...................................................................................................................................................51
Steel 2nc........................................................................................................................................................................52
Steel Key Economy.......................................................................................................................................................53
Steel Impacts: Military..................................................................................................................................................54
Steel Impacts: Environment..........................................................................................................................................55
Agriculture 2nc.............................................................................................................................................................56
Exports Key US Agriculture.........................................................................................................................................57
Agriculture Key Economy............................................................................................................................................58
1
UMKC SDI 2008 Economy Disadvantage
LouGie’s
2
UMKC SDI 2008 Economy Disadvantage
LouGie’s
3
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***1nc’s***
4
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy 1nc
The U.S. economy is set to rebound and have growth in 2009, and new change will crush
investment and confidence derailing the economy
Vikas Bajaj 7/1/2008 “At Midyear, the Economic Pain Persists”, New York Times,
http://www.nytimes.com/2008/07/01/business/01place.html?em&ex=1215057600&en=6cc470e7cba33e7c&ei=5087
%0A
Many policy makers and bankers said this credit mess was contained. Boy, were they wrong. More than a year after the
crisis first flared, the financial industry, and with it the broader economy, seems to be caught in a vicious circle. As
home prices sink, people are falling behind on their mortgages in growing numbers. As more homeowners run into
trouble, banks must write off even more loans. And as the bad loans mount, financial companies are increasingly
unable or unwilling to extend credit, making it even harder to buy homes or expand businesses. This process is playing out
painfully on Wall Street, where on Monday the stock market rounded out its worst 12-month run since the spring of 2003, when the
United States invaded Iraq and the market was beginning a tenuous recovery from the bursting of the technology bubble. The Standard &
Poor’s 500-stock index is down 12.8 percent for the first half of the year. The index just had its worst June (down 8.6 percent) since 1930
(down 16.5 percent). The Dow Jones industrial average is off 14.4 percent for the first half of the year. Financial shares keep falling. Even as
the broader market posted a small gain on Monday, shares of banks and brokerage firms in the S.& P. 500 fell 2.1 percent, to a five-year low.
Lehman Brothers, which has been struggling to persuade investors that it can survive as an independent firm, fell 11 percent Monday, bringing
its loss for the year to nearly 70 percent. “Eventually, the financial sector’s troubles will be communicated to the rest of the economy,” said
Douglas M. Peta, market strategist at J.& W. Seligman and Company in New York. “As there is less investment available that restrains
consumer spending, it restrains corporate spending.” One measure already signals that the woes of the financial system are straining
the economy. In the last 13 weeks, total bank loans, leases and securities holdings have fallen at an annual rate of 9.1 percent, its fastest
decline since 1973, when the data was first collected, according to Jan Hatzius, chief domestic economist at Goldman Sachs. Even as the
Federal Reserve and the government have tried to reinvigorate the economy with lower short-term interest rates and tax rebates, rates on
mortgages and corporate loans have climbed to their highest levels this year. The average interest rate on a 30-year fixed rate home loan was
6.45 percent last week, up from 6 percent at the start of the year. Investment-grade corporate bonds are yielding 6.2 percent, up from 5.7
percent at the start of the year. Until recently, “we haven’t had the sense that we had the downward spiral in anything other
than housing,” said Jane Caron, chief economic strategist at Dwight Asset Management, a bond-trading firm based in Burlington, Vt. “What
I am worried about is that we are headed in a direction where those negative feedback loops expand and intensify.” That cycle will not be
broken, Ms. Caron and other analysts say, until the decline in home prices slows significantly or ends, allowing the market to tally the full cost
of the recent credit binge and restoring confidence among bankers and investors. Some analysts see tentative signs that the fall in housing may
be ebbing. Sales of existing homes have flattened in recent months and home prices fell a little less in April than they did in March on a month-
over-month basis. But both trends could easily reverse, as they have after previous upswings. “We could reach a bottom in housing at
the end of this year and have some growth in the second half of 2009,” Ms. Caron said, “but that requires the economic
backdrop to remain no worse than it currently is.”
5
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy 1nc
Even small regulations spillover and devastate the economy
Thomas G. Marx (manager in the Public Policy Center for the Global Climate Issue for General Motors Corp) July
1999 The Role of Technology In Responding to Concerns About Global Climate Change, www.accf.org/marx.pdf,
While manufacturing’s dominance of total energy use suggests a reason to focus on that subsector of industry, it is important to note that
energy and technology policies directed at one area could have a spillover effect that negatively affects other lower
energy-consuming subsectors. While some industries may not consume as much energy or emit as much carbon, policies affecting
energy prices and availability may have a disproportionately large effect on them. Some of these smaller energy users can be significant players
in economic terms. Thus, well-meaning energy policies with potentially modest economic impacts in one industrial area
could have unintended devastating economic impacts in another. The potential for crosssectoral problems and the difficulty in
easily identifying them is inherent in the complexity of the industrial sector.
6
UMKC SDI 2008 Economy Disadvantage
LouGie’s
7
UMKC SDI 2008 Economy Disadvantage
LouGie’s
8
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Regulations 1nc
US economy bouncing back—it is now growing at sustainable pace
The Australian Business News 6/16/2008 “Slowdown in two sectors does not make a US recession”,
http://www.theaustralian.news.com.au/story/0,25197,23871486-23850,00.html
What, then, is the evidence of America moving into recession? Looking at the statistics used by the NBER, there is little
or none - at least so far. GDP has continued to grow, albeit slowly, in the past two quarters and almost certainly will accelerate in
the current quarter because of booming exports; industrial production has been positive, as have real income and whole-retail trade.
Employment has fallen slightly, but by nowhere near as much as in the mildest of past recessions. Reliable high-frequency indicators,
such as the monthly purchasing managers' surveys, point to continuation of modest growth. Most importantly, consumer
spending has remained robust. American consumers, far from cutting back to bare essentials, as was expected by bearish
commentators after the credit crunch, are actually increasing their spending. The evidence of this, contained in the strong retail
sales figures for May published last Thursday, was by far the most important economic news of the past few weeks. But these
figures received almost no media coverage and little market attention. Further, May's retail sales figures revealed a picture completely at odds
with conventional wisdom about the US economy. Despite the jump in energy prices and the related collapse in measures of consumer
confidence, retail sales rose by 1.1 per cent on the month, the strongest gain since last November. Sales adjusted for inflation and
excluding food and energy also showed gains much stronger than expected. Also, April's sales, initially thought to have fallen, were revised
upwards to show a significant gain - and the two-month average of these volatile figures suggested that growth in the US
consumer economy is now similar to the rate a year ago, before the sub-prime crisis and credit crunch. This
conclusion is not based on one set of good retail sales statistics, but includes stronger than expected recent figures on
industry sales, stocks, imports, exports, purchasing managers' surveys and even home sales. But in saying this, am I not
forgetting about the dreadful employment figures published last Friday, which triggered the collapse of the US dollar I mentioned at the start?
Not at all. Despite the shock-horror headlines about a terrifying leap in unemployment from 5 to 5.5 per cent, employment figures for May
were quite strong and fully consistent with the message of economic acceleration. Rates of unemployment are irrelevant in timing the
economic cycle, since they are a lagging indicator, turning some six-to-nine months after the economy as a whole. Meanwhile, the job creation
figures, which do reflect current economic conditions, showed a modest decline of 49,000 in payroll employment, exactly in line with
expectations and consistent with the economy growing at about 1.5 per cent, just slightly below the 2 per cent trend rate of productivity growth.
Of course, May's strong retail sales were due in part to the tax rebates of $US600-2000 per household from the US Treasury from last month.
Many analysts, therefore, dismissed the gains as misleading. But this was the wrong response. The role of tax cuts in boosting consumer
spending is a reason for optimism, not scepticism, about the economic outlook. The tax rebates were designed to boost consumer
spending and that is why we have always expected (in line with the Fed and the US Treasury) to see economic recovery from this
summer. Retail sales figures have now shown that the US tax cuts are working as planned. They will temporarily boost
consumption - and by the time that this temporary tax boost runs out around Christmas, the US economy will be
starting to enjoy the benefits of lower interest rates, operating with a lag of 12-18 months. In much of this discussion, my
optimism on US economic statistics has been qualified by the weasel words “so far”. But this can change. Until this month, sceptics could
predict that trouble lay ahead for America once consumers finally realised that their credit had run out. But the strong consumer response to the
$US110 billion tax rebate program changes the balance of this argument. With the rebates flowing into bank accounts and
boosting real disposable incomes, the period of greatest risk for the US economy has passed. For the next two quarters,
disposable incomes will rise at an annualised rate of 8 per cent or more and, given the normal lags between money appearing in bank accounts
and flowing into shop tills, the tax rebates will guarantee decently strong retail spending between now and Christmas - maybe a temporary
consumer boom. If there were going to be a US recession in response to the credit crisis, it would have started by
now. So, let me stick my neck out and say without qualification - the US economy is out of the woods.
Energy regulations would plunge the US economy into a recession, these include carbon
taxes, gas taxes, emissions regulations
Modern Plastics August 1 2001
Despite the fact that the Kyoto Protocol has not been ratified by any major industrial nation (unless you count Romania), there has been
renewed pressure from environmentalists, the press, and Europe for President Bush to endorse Kyoto. However, as the National Association of
Manufacturers recently stated, President Bush's stance on Kyoto is right on the mark. If ratified, the treaty would have a major
economic impact on the U.S. economy, especially industries such as plastics, which use large amounts of electricity to
produce their products. For in order to comply with Kyoto's emission standards in the U.S., where significant steps have
already been taken to curb pollution, measures such as carbon taxes on electricity and gasoline would be required to restrict
the use of energy. The costs of such measures to the economy would be massive. As the U.S. Department of Energy has
estimated, the costs of reducing [CO.sub.2] in the U.S. under Kyoto would be $ 300 billion to $ 400 billion, or 3 to 4% of the
annual GDP. Such a great loss of GDP would most certainly plunge the U.S. into the depths of a recession. Furthermore,
increased energy costs would force most plastics processors either overseas or out of business. Meanwhile, in Europe, where replacing old,
inefficient power plants can make up much of the emissions reduction, and in the developing world, where no cuts will be required, the costs of
production relative to the U.S. will be much lower. Although the U.S. may need to take steps to curb [CO.sub.2] emissions, Kyoto is not the
answer.
9
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Regulations 1nc
Global economic decline will bring Armageddon.
Lt. Col Tom Bearden (PhD Nuclear Engineering) April 25 2000
http://www.cheniere.org/correspondence/042500%20-%20modified.htm
Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that
some of the weapons of mass destruction will be used by one or more nations on others. An interesting result then---as all the old
strategic studies used to show---is that everyone will fire everything as fast as possible against their perceived enemies. The
reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to
desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of
the long range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic
collapse, poverty, death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major
nations also, and literally a hell on earth will result. In short, we will get the great Armageddon we have been fearing since the advent
of the nuclear genie. Right now, my personal estimate is that we have about a 99% chance of that scenario or some modified version of it,
resulting.
10
UMKC SDI 2008 Economy Disadvantage
LouGie’s
11
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Uniqueness***
12
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy Up
10 reasons while US economy will pick up despite any worries
Dr. Robert J. Froehlich (Vice Chairman, DWS Scudder Chairman, Investor Strategy Committee) 7/14/2008 “10
Reasons Why The Bear Market Won’t Last”, http://www.kolnkgin.com/news/headlines/25426684.html
Reason number 10 is “everyone is bearish.” This is pretty simple, when everyone is bullish on the market, it probably is a sign to get
out and conversely, when everyone is bearish (like today), that probably is a sign to get in. Remember, nothing is ever
as good as it appears, nor is it ever as bad as it seems. The markets never go up forever, nor do they go down
forever. When everyone is buying, you sell. And when everyone is selling, I believe it’s a great time to buy. Number 9 - Interest Rate Cuts
Reason number 9 is “interest rate cuts.” No, I am not trying to predict what the Federal Reserve Board (Fed) will do next; rather I am
talking about what they have already done. Remember, when the Fed cuts interest rates, they are doing so to help stimulate
the economy. And on the day the Fed cuts interest rates, here is what typically happens. Our stock markets soar,
sometimes up triple digits on the Dow, while the economy yawns. The reason is our markets have the ability to react
immediately, while it takes time to move our economy. It can take as long as 12 to 18 months for interest cuts to help move the economy.
We still have 300 basis points of interest cuts in the pipeline that I believe will be helping our economy in the second half of the year,
regardless of the Fed’s next actions. Number 8 - US Dollar Rebounds Reason number 8, the US Dollar rebounds. Think about it this
way, a country’s currency is typically a reflection of its interest rate policy. If the Central Bank is raising rates, the currency is usually stronger.
Conversely if the Central Bank is lowering rates, the currency is typically weaker. So why do I believe the US dollar is about to rebound? For
one reason, our Central Bank, the Federal Reserve Board, has stopped cutting interest rates after 17 separate, 25 basis point cuts, or a total of
425 basis points or 4.25 percentage points. On top of that, I believe that by year-end, both the European Central Bank and the
Bank of England will be forced to lower rates as their economies and unemployment are much worse than ours,
due in part to the strength of their currency which has made all of their exports more expensive. When the dollar
rallies, I believe it will do wonders for consumer and investor confidence. Number 7 - Oil Stabilizes Reason number 7 is I
believe that the price of oil is about to stabilize. From my perspective, I believe that global demand is finally slowing down a
little. Why? Because many governments have quit or lowered their subsidies on gasoline, which have hidden and protected consumers from
rising energy prices. These consumers no longer have the ability to spend other peoples’ money (the government’s) at the pump, they must
spend their own. We spend other peoples’ money differently than we spend our own (more about that later). As consumers around the
world use their money to pay for gas, demand is likely to go down and with it, oil. I don’t believe this is the end of the
commodity bull market. From my perspective, it is simply a pause in energy commodities and especially oil. And I believe, agricultural
commodities, industrial based commodities and precious metal commodities should be unaffected and continue to boom. Number 6 - Home
Price Recovery Reason number 6 is home prices are poised to begin their recovery. And in my opinion, although we may not
see recovery tomorrow, next week or maybe even next month, we are nearing the bottom. I believe in Bear Markets. When asset classes lose at
least 20 percent, it is usually a good sign that maybe they are nearing the bottom. According to the S&P/Shiller Housing Index, over the past 12
month period, three bellwether cities posted housing price declines of over 25 percent - Miami, FL, Las Vegas, NV and Phoenix, AZ. These
cities were at one time, the housing darlings and on the way up. Now, they are leading us on the way down. Remember what I said earlier,
“nothing is ever as good as it appears, nor is it ever as bad as it seems. The markets never go up forever, nor do
they go down forever.” And I believe, the same can be said for home prices. Number 5 - Earnings Up-tick Reason
number 5, earnings up tick. As the year moves along, I believe earnings are likely to get stronger quarter by quarter. Second
quarter earning’s season just began and I think it should be a good one, partly because when we compare earnings to the second quarter of
2007, I believe things will really look good. And the earnings story keeps getting better as the year goes on. From my perspective, I believe,
third quarter earnings should be better than second quarter earnings. And again, I believe they will be driven by the fact that earnings
comparables for third quarter 2007 were much, much worse than the second quarter. Anyway, I think you get the picture. If you lower the bar
enough, anyone can jump over it. Earnings expectations and comparables are so low, that company after company and industry after industry
should provide what I call an “earnings up tick.” And at the end of the day, earnings drive our markets both up and down. Number 4 - Merger
& Acquisition (M&A) And Initial Public Offering (IPO) Recovery Reason number 4 is both mergers and acquisitions and initial
public offerings should recover in the second half of the year. And I believe this is likely to happen for a couple of reasons.
When companies are not making money, few are looking to get bigger by buying other companies. Also, why would a
firm want to go public with an initial public offering, when most public firms have horrible earnings and their stock prices have been crushed?
As earnings recover, so should the appetite for mergers and acquisitions as well as initial public offerings. But it’s not
just that, because it has been such a tough first six months of the year, investment bankers now have only six months to make their year and,
more importantly, their bonuses. I believe it will be a feeding frenzy of mergers and acquisition as well as initial public
offerings as a result. There is one final catalyst on the merger and acquisition front from my perspective. Watch out for the mergers from
across the pond. If the dollar begins to strengthen and the Euro weakens, this could close the window of opportunity for European firms to use
their strong currency to fund an acquisition here in the US. Number 3 - Investment Liquidity Reason number 3 is what I call
investment liquidity. Everyone knows that we are now in a liquidity crisis. Consumers can’t get any liquidity. Businesses are even having
trouble accessing additional liquidity. But I believe, this isn’t the case for investment liquidity (of money that can be invested). First of all, as of
June 30, according to the Federal Reserve Board, retail investors had over $3 trillion in Money Market accounts. The 10-year historical average
has been under $2 trillion. That’s a lot of money sitting on the sidelines just waiting to be invested. And don’t forget about the trillions of
dollars that private equity firms have raised over the past few years. All of that money in private equity needs to find a home as well. And
Economy Up
continued
finally don’t forget my favorite, sovereign wealth funds. There is over $6 trillion in these funds and it is rising everyday. This money too needs
to find a home. While we may have a consumer and business liquidity crisis, from my perspective, we have plenty of
investment liquidity from individual money market accounts, private equity firms and sovereign wealth funds.
Number 2 - The election will be over Reason number 2 is the Presidential election will soon be over, setting the stage for a
huge relief rally in our market, regardless of who wins. That’s right, I said, regardless of who wins the election. You see, the
media paints the picture that Wall Street likes the republicans and hates democrats. From my perspective, that is not true. In fact, it would be
absurd, because our stock market has been up more under democratic administrations than republican administrations. What Wall Street
hates is not democrats, but rather the “uncertainty.” When the election is over, I believe, so is the uncertainty, setting
the stage for a rally, regardless of who wins. And I believe, the winning presidential candidate will have a great influence on which
sectors or industries do better or worse, depending on the programs and platforms they push. But the overall market is not about which political
party wins. I wish it was that easy, but the fact is our stock market has boomed under democratic presidents and our stock market has crashed
under democratic presidents. Likewise, our market has had some great years under republican presidents as well as some really horrible years
under republican presidents. Regardless of who wins, I believe we will have a relief rally. And from my perspective, all the winner needs to do
is determine which sectors and industries lead that relief rally. Number 1 - The consumer is not dead Reason number 1 is the consumer
is not dead. Despite the high price of gas and food, the collapsing real estate and stock market and the weak
employment market, consumers are still spending. And I believe they are about to spend even more. Here’s what I think
is about to happen. One of the current great debates on Wall Street is how much of the $600 tax rebate checks
consumers will actually spend. The consensus on Wall Street is less than half or 50 percent. The reason is consumers need to pay off
high credit card debt, catch up on late mortgage payments or save the money, because they just lost their job. I believe the consensus on Wall
Street is wrong and that consumers won’t spend 50 percent of their tax rebate check, but they will spend 200 percent.
That’s right, I said 200 percent. Remember earlier, how I said that people spend other people’s money differently than they do
their own? Consumers won’t view this tax rebate money as their money even though it is. They have already paid taxes on it
and the government is giving them a rebate of their own money. Rather than looking at it like it is their own money, I believe
they will look at it as monopoly money or funny money. They didn’t expect it and they didn’t count on it, rather it just
showed up. And watch how it will be spent. I don’t believe, consumers will take that $600 tax rebate check and go to Best Buy for example
and say show me all of your televisions under $600. I do believe consumers will view the first $600 as free money or their starting point. So
instead, they will look for that $1,000 or $1,500 television, which is how we get to my 200 percent forecast. And, by the way, it couldn’t come
at a better time. Getting consumers excited at this time of the year could lead right into a strong back-to-school shopping season. And
historically, a strong back-to-school shopping season is a great predictor for what kind of holiday shopping season we may have as well.
Remember, people in this country were born to do one thing and that is shop. And we do it better than anyone else in
the world, especially when we are shopping with other people’s money.
14
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy Up
The US Economy is defying the dark days of the past and moving forward.
John M. Berry 7/22/2008 Bloomberg News, “U.S. Economy Defies the Gloom in Past Quarter”,
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=aFYsqGVoF5mI
Sure, the U.S. economy has lots of problems, including falling payroll employment, the highest inflation in 17 years, declining home prices and
a shaky financial industry. Consumer confidence has dropped into the basement, partly because of the cost of gasoline, which has gotten so
high it's killing sport-utility-vehicle sales. Maybe without the tax-rebate checks, consumers wouldn't have been spending on other stuff.
Nevertheless they have. The dollar is in the tank, too, adding to inflation, even for goods coming from China. And for all that, the U.S.
economy expanded in the second quarter, and not at too shabby a rate considering the many drags on growth. Even
with all the things going wrong -- including the official bear market on Wall Street -- growth probably checked in at about a
2.5 percent annual rate in the second quarter. That's about as fast as many economists think it could grow on a sustained basis
without generating more inflation. Some of the gain can be traced to exports, which are soaring at the same time that imports are slowing. That
makes a big difference in U.S. economic growth. ``The second quarter appears to be actually better than expected,'' Federal Reserve Chairman
Ben S. Bernanke said at a congressional hearing on July 15. ``We're looking at the remainder of the year as being probably
positive growth but certainly not robust growth.''
15
UMKC SDI 2008 Economy Disadvantage
LouGie’s
16
UMKC SDI 2008 Economy Disadvantage
LouGie’s
17
UMKC SDI 2008 Economy Disadvantage
LouGie’s
A2: No Recessions
The US is not in a Recession.
John M. Berry 7/22/08 Bloomberg News, “U.S. Economy Defies the Gloom in Past Quarter”,
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=aFYsqGVoF5mI
In spite of the hand-wringers, the U.S. economy isn't mired in a recession -- and that's not just a technical matter of
definitions. It's a matter of how many jobs are likely to be lost as the country works its way out of the mess created by the bursting of the
housing bubble, the resulting financial-market turmoil and soaring energy prices. At a July 16 hearing, Massachusetts Democratic
Representative Barney Frank, chairman of the House Financial Services Committee, said ``if the numbers on employment in the second half
are no better than those for the first half, we are on track to lose nearly 1 million jobs this year.'' That's true, though with about 138 million
payroll jobs, that would be a loss of three-quarters of 1 percent. Losses in recessions normally are much higher than that. Early in 2002, after
the last recession had ended, the 12-month job loss was more than 2 million, according to the Bureau of Labor Statistics. The unemployment
rate, which was 5.5 percent in both May and June, is about a percentage point higher than it was in the first half of 2007, and it is likely to
increase unless economic growth becomes stronger than now expected.
18
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Uniqueness: Sectors***
19
UMKC SDI 2008 Economy Disadvantage
LouGie’s
20
UMKC SDI 2008 Economy Disadvantage
LouGie’s
21
UMKC SDI 2008 Economy Disadvantage
LouGie’s
22
UMKC SDI 2008 Economy Disadvantage
LouGie’s
23
UMKC SDI 2008 Economy Disadvantage
LouGie’s
24
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Links***
25
UMKC SDI 2008 Economy Disadvantage
LouGie’s
26
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Energy Efficiency
Energy efficiency mandates prevent consumers from making bigger gains.
Jerry Taylor (director of natural resource studies at the Cato Institute) 1/21/2004. CATO Institute.
Nor is it even true. According to the analysis offered by the Clinton administration in support of its proposed
standard, the price of the average air conditioner on the market will increase from $332 to $435, but 40 percent of
all consumers will never save enough on their energy bills to offset the higher price attached to the "efficient" air
conditioner. So even by the conservationists' own calculations, 60 percent of consumers arguably may have "won,"
but 40 percent most surely "lost." But wait, there's more. Those "winners" will only have won if the net economic
savings gained from their forced investment in energy efficiency is greater than the returns that might have been
available to them had they put their money in other investments. In other words, just because you save a net of
three percent a year by buying the energy efficient air conditioner does not mean you made a good investment. If
you could have gotten seven percent a year by investing in municipal bonds, the federal mandate will have cost
you money.
Energy efficiency standards just result in more use sapping consumer savings and
damaging the economy.
Jerry Taylor, director of natural resource studies at the Cato Institute. 1/21/04. CATO Institute.
Of course, there are other arguments marshaled by the conservationists for these standards. More efficient appliances, they say, will reduce
energy demand, thus helping to prevent blackouts during hot summer days. And in fact, it's estimated that electricity demand will drop one
percent during hot summer days because of these standards. But if we think that reducing demand during hot summer days is worthwhile,
wouldn't it be better to simply ensure that the price of electricity during hot summer days reflects it's cost? If regulators were better able
to allocate scarce resources than markets via the pricing mechanism, then socialism would never have collapsed in
Eastern Europe. But even so, fundamental laws of economics are being ignored. To whit, if you reduce the cost of
turning up your air conditioner on a summer day (which is exactly what an energy efficient air conditioner does),
all things being equal, you will turn up your air conditioner on a summer day more often. Economists who have
studied this dynamic refer to it as "the rebound effect" and have discovered that energy efficiency standards only
save money and energy if you don't consider the fact that reducing the marginal costs of energy consumption will
result in...more energy consumption. Once you do consider that fact, much of the advertised energy savings from
the tighter standards disappear. No matter how you cut it, mandatory energy-efficiency standards are a bad deal for
consumers and the economy as a whole, and no amount of Orwellian rhetoric or half-baked economics can change
that fact.
Energy efficiency is bad because it crowds out investments and steals funds vital economic
growth.
The Energy Journal, 1/1/04
If present, demand-pull innovations that reduce energy intensity may not be free. Developing energy efficient
technologies consumes research and development funds, and using these funds to increase energy efficiency
during periods of higher prices may crowd out investments that would otherwise speed economic growth. Goulder
and Schneider (1999) evaluate these potential costs with a parameterized model. Their results indicate that using a
limited supply of R&D funds to increase energy efficiency diverts funds from investments that spur economic
growth and therefore, increases the gross costs of a carbon tax.
27
UMKC SDI 2008 Economy Disadvantage
LouGie’s
28
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Carbon Tax
A carbon tax would tank the global economy.
The National Interest, Fall 1999
The Energy Modeling Forum at Stanford University (EMF) recently compared estimates of the costs of meeting
the Kyoto targets made by ten modeling teams from around the world. They show that with no international
trading of emission rights, the United States would need to levy a tax on carbon emissions of between $90 and
$400 per ton of emissions in 2010 to accomplish its Kyoto objectives; this is equivalent to a tax on coal of $70-
$320 per ton (versus its current price of about $25 per ton!). Most of the teams estimate that such a tax would cost
the U.S. economy between $45 and $200 billion a year (about 0.5 to 2.0 percent of 2010's GDP). They show
similar, or even larger, costs for Europe and Japan.
Carbon taxes send ripple effects throughout the economy by hurting labor supply.
Ian W. H. Perry, October 2003, Oxford Review of Economic Policy 19, 2003,
http://216.239.57.104/search?q=cache:LjghhWTgEgsJ:www.rff.org/Documents/RFF-DP-03-
46.pdf+carbon+tax&hl=en
By increasing energy prices, carbon taxes drive up product prices throughout the economy, since energy is an
input in most production sectors; this leads to a slight reduction in real household wages and labor supply. In
general, the efficiency loss from this reduction in labor supply, or “tax-interaction effect,” exceeds the benefits
from the revenue-recycling effect, implying that carbon tax swaps increase rather than decrease the costs of labor
taxes. This finding is not surprising because, as explained below, it is entirely consistent with the familiar result in
public finance that the efficiency costs of narrow taxes (ignoring externalities) tend to exceed those of broad taxes
on labor income.
29
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Coal Links
Regulations on coal would devastate the economy like nothing before.
The National Interest, Fall 1999
In a world of models, this might not seem to be a very high price, but models have limitations. For instance, none
of them include the effects of carbon "sinks" (absorbers of gases such as trees) or of possible losses from
unemployment or inflation. Nor do they note that, by 2010, about half of our electricity will be coal-fired--most of
it consumed east of the Rockies where coal will fuel about 60 percent of electricity generation, with some states,
such as Ohio, being almost entirely dependent on that fuel. Meeting our Kyoto obligations, then, could entail
cutting the supply of electricity east of the Rockies by upwards of one-fourth. Many electricity-intensive industrial
plants (e.g., aluminum and chemical ones) would be shut down. The implied limit on coal would shutter most of
our steel industry, with our supply shifting to countries not constrained by the Protocol, which is to say the
developing countries. Those developing nations would have to burn coal to make steel to ship to us, so there would
be no net reduction in global emissions. More generally, if only the Annex B countries limit their high carbon-
using industries, such industries will expand elsewhere, a phenomenon dubbed "leakage." Lest one think this
implausible, consider that pollution controls in the advanced countries already lead to the construction of refineries
and chemical plants in less fussy, poorer ones. Relying on less optimistic assumptions than those of the ten
modeling teams, the Energy Information Administration of the Department of Energy comes up with a much larger
loss of U.S. output--about 3 percent of GDP by 2010 (roughly $300 billion in total, an amount equivalent to $960
per person or $3,800 for a family of four). This is akin to losing a year of economic growth between now and
2010. The loss could be higher still if, as is perfectly imaginable, congressional and bureaucratic micro-managers
decide which uses of carbon-based fuels are more or less socially worthy than others.
Regulations on the coal industry crush the economy. (carbon tax, gas turbines, co2 reductions,
renewables)
Testimony of Dr. Harold Shobert, Director for the Energy Institute @ Penn State. Federal News Service June
8, 2000.
Listening to the barrage of problems, criticism, even invective, facing the coal industry, it is easy to forget that coal
is the backbone of America's energy economy. The majority share of electric power production, as well as much
process and space heating, belongs to coal. Most of us have heard some of the proposals that would adversely
affect the coal industry: a carbon tax, reliance on natural- gas-fired turbines for electric power generation, carbon
dioxide reductions, mandates for using "renewables", and of course the tired old epithet that "coal is a dirty fuel."
Global warming--real or imaginary, friend or foe...carbon dioxide emissions--a threat to the planet, benign, or good
for agriculture...while the debate rages on, the debaters occasionally pause long enough to agree on one point: coal
is the "bad guy." According a 1995 EIA estimate, coal reserves are about a trillion tons worldwide, more than 235
times the world's annual consumption. Unquestionably, coal has great potential as a future source of energy. There
is little doubt that coal combustion must continue as a major contributor to the energy economy for the near- to
mid-term future. However, environmental pressures may militate against expanded markets for coal as an energy
source, and the problem is likely to be carbon dioxide emissions. The National Research Council (NRC) pointed
out in 1995 that, "Of all the environmental issues facing the future use of coal, none is as potentially far reaching
as the worldwide concern over global climate change". The heat generated in arguments about the Kyoto Accord
sometimes seems to be about as large as the heat generated by burning the world's annual coal production. It is
likely that environmental pressures on present-day, conventional coal utilization will only intensify. This factor,
taken by itself, would cause us to question the long-term future of the coal industry. Environmental issues also
severely impact the metallurgical coke industry, the present source of most chemicals from coal. The traditional
coal industry and coal markets in the dawning of the 21st century are under increasingly intense assault.
30
UMKC SDI 2008 Economy Disadvantage
LouGie’s
31
UMKC SDI 2008 Economy Disadvantage
LouGie’s
32
UMKC SDI 2008 Economy Disadvantage
LouGie’s
33
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Tradable permits won’t work unless they are untopical. They’ll just jack the economy.
Margo Thorning (Ph.D Senior VP and Chief Economist for American Council for Capital Formation.) March 31,
2000 Federal News Service
Another measure of the burden that near-term reduction of emissions would place on the U.S. economy is the cost
of a tradable permit to emit a metric ton of carbon. Under a permit system, permits would trade at the marginal
cost of abatement. (Carbon taxes could be imposed instead of tradable permits; there should, in principle, be no
difference in the energy prices under the two alternative systems.) If international trade in permits is not allowed,
the cost of a permit to meet the Kyoto target varies from a low of $240, according to Professor Manne and Dr.
Richels, to a high of $348 per metric ton, as estimated by EIA (see Figure 4).
34
UMKC SDI 2008 Economy Disadvantage
LouGie’s
35
UMKC SDI 2008 Economy Disadvantage
LouGie’s
36
UMKC SDI 2008 Economy Disadvantage
LouGie’s
37
UMKC SDI 2008 Economy Disadvantage
LouGie’s
38
UMKC SDI 2008 Economy Disadvantage
LouGie’s
39
UMKC SDI 2008 Economy Disadvantage
LouGie’s
40
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Budget***
41
UMKC SDI 2008 Economy Disadvantage
LouGie’s
CAFÉ Link
CAFÉ decreases federal revenue by decreasing gas tax receipts.
Congressional Budget Office November 2002, “Reducing Gasoline Consumption: Three Policy Options”,
http://www.cbo.gov/showdoc.cfm?index=3991&sequence=7
An increase in CAFE standards would have an indirect effect on revenue collected for the Highway Trust Fund. Improvements in
the fuel economy of new vehicles would reduce their gasoline consumption per mile traveled and thus bring in fewer gasoline-
tax receipts. That decline in receipts would be partly offset as lower driving costs led to more vehicle miles traveled. (Research indicates that
increases in VMTs due to lower driving costs could offset the gasoline savings from CAFE-induced changes in fuel economy by roughly 20
percent.) The decline in gasoline-tax revenue because of higher CAFE standards would increase over time as older vehicles
were replaced by new vehicles that met the more-stringent standards.
42
UMKC SDI 2008 Economy Disadvantage
LouGie’s
RPS Links
RPS necessitate huge costs for policy design and monitoring costs.
Meredith Wingate (Center for Resource Solutions) June 2003, “A Survey of the Administrative Costs to
Government of Implementing a RPS, Feed-in Law, Competitive Tender, and Public Benefits Fund”,
http://www.resource-solutions.org/Library/librarypdfs/IntPolicy-Administrative.Costs.of.4.Policies.pdf
There are two primary costs to government in implementing and administering a renewable portfolio standard (RPS). The first is
the design of the policy, and the second comes from monitoring and verifying compliance with the policy. In the international
experience, the RPS is often a part of a larger electricity law and the design of the policy is left to the administrative or rulemaking arm of
government (e.g., the public utilities commission). This process can range in time from four months to nearly two years, and
usually occurs after the law is promulgated. The two primary cost centers for this work from the government’s perspective are staff
time and consultant’ fees.1 The range in these costs varies greatly depending on the complexity of the law, size of the market, number of
companies impacted, degree of public input, and other factors. Because of the huge variation, we do not attempt to estimate costs with
precision here. However, we note that government staffing needs for these activities in U.S. states rarely exceeds 2 fulltime equivalent (staff). If
a 6-month process for developing the RPS is used, and additional legal and consulting fees are included, this might equate to $100,000 –
$300,000 for the implementation of a state RPS. A national RPS, on the other hand, might expect far greater policy development
costs. The other primary cost to government in administering an RPS is monitoring and verifying compliance with the
policy. Most US states and countries that have passed an RPS have used one of two primary methods of verifying compliance with the law. The
first is a contract path accounting method, and the second is a certificate-based accounting method.
43
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Government eats insurance costs for the nuclear industry, costing billions each year.
Mark Zepezauer and Arthur Naiman 1996 Take The Rich Off Welfare,
http://www.thirdworldtraveler.com/Corporate_Welfare/Nuclear_Subsidies.html
The insurance subsidy Since 1959, the government has also limited the liability of nuclear utilities for damage caused by
accidents. Until 1988, the utilities were only responsible for the first $560 million per accident; then the limit was
raised to $7 billion. But $7 billion wouldn't begin to cover the costs of a core meltdown, or even a near meltdown like
Chernobyl. That accident's total costs are estimated at $358 billion-not to mention the 125,000 deaths the Ukrainian government
figures it has caused. The Energy Information Administration calculates that if nuclear utilities were required to buy insurance
coverage above that $7 billion on the open market, it would cost almost $28 million per reactor, for a total annual subsidy
of $3 billion. (Even if it could pay its own way, the risks of nuclear power far outweigh its benefits. But that's the subject for another book.)
Investors will never put money into nuclear- subsidies will be necessary.
Dashka Slater September 2001 “Free-Market Fallout - construction and operational costs of nuclear power
plants”, Sierra Magazine, http://www.findarticles.com/p/articles/mi_m1525/is_5_86/ai_77279545
Deregulation changed the nuclear power equation for good. "In this new competitive generation market, investors don't have
any guarantees that the construction costs will ever be recouped," explains Jerry Taylor of the Cato Institute, a libertarian think tank.
"No matter how many subsidies we throw at this technology, we're not going to tempt many investors to build nuclear
power plants when cheaper alternatives are in front of them." Taylor is not someone you'd expect to see dissing nuclear power; his
bio on Cato's Web site notes that he is an outspoken critic of federal regulations, environmental "doomsaying," and energy-conservation
mandates. But as a strict free-marketeer, he thinks conservatives have "a soft spot in their heads" when it comes to nukes. "If nuclear power
can pay for itself over time, then it doesn't need any government help, welfare, subsidy, or anything else," he says. "It seems
clear to me that were it not for large and historically important federal subsidies, there wouldn't be a single nuclear power
plant in the United States." So can the Bush administration's love affair with the atom persuade investors to ignore the
technology's inherent financial liabilities? Most observers don't think so. "Show me the orders for plants," says Sherry. "Show
me a utility or an unregulated power producer willing to risk capital of the magnitude we're talking about. I'll believe it
when I see it."
44
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Regulation Links
The best research proves that reducing emissions would hinder GDP growth, devastating
the budget
Margo Thorning (American Council for Capital Formation Senior Vice President and Chief Economist, Ph.D)
September 1999, http://www.accf.org/publications/reports/sr-ccp-fedbudget99.html
A wide range of models predict that reducing U.S. CO2 emissions to either the Kyoto target (7 percent below 1990 emission levels)
or even 1990 levels (President Clinton's pre-Kyoto target) would reduce U.S. GDP growth significantly. Research conducted over
the past decade for the ACCF Center for Policy Research by top climate change scholars such as Professor Gary W. Yohe of Wesleyan
University, Dr. Lawrence M. Horwitz of Primark Decision Economics, Senior Vice President Mary H. Novak of WEFA, Inc., Professor Richard
Schmalensee of the Massachusetts Institute of Technology, Professor Alan S. Manne of Stanford University, Dr. Richard Richels of EPRI, Dr.
W. David Montgomery of Charles River Associates (CRA), Dr. Joyce Brinner of Standard & Poor's DRI (DRI), and others, concludes that
the cost of reducing CO2 emissions in the near term would impose a heavy burden on U.S. households, industry, and
agriculture. In addition, the projected federal budget surpluses, which many hope will fund a more secure retirement for the baby boom
generation, are imperiled by slow growth in GDP stemming from CO2 emission reductions.
Policies that hurt the economy also hurt the federal budget.
Congressional Budget Office November 2002, “Reducing Gasoline Consumption: Three Policy Options”,
http://www.cbo.gov/showdoc.cfm?index=3991&sequence=7
Raising the gasoline tax, tightening CAFE standards, or enacting a cap-and-trade program would also affect federal revenue in other, less direct
ways. By imposing costs on producers and consumers, all of those policies would tend to discourage economic activity.
That decrease in economic activity would lead to lower tax receipts in multiple ways--for example, collections of corporate
income taxes would decline if the profits of automakers or gasoline companies fell. The size of those indirect effects on tax
collections would vary with the economic cost of the policy adopted. That cost in turn would depend on the targeted reduction in gasoline
consumption (bigger reductions would be more costly than smaller ones) and the comprehensiveness of the policy. As discussed in Chapter 2,
policies that encourage all gasoline-saving activities will produce a given gasoline reduction at a lower cost than policies that focus on a limited
number of activities. Further, for a gasoline tax or a cap-and-trade program, the total cost imposed on the economy would depend on how
lawmakers opted to use the revenue from the gasoline tax or from an allowance auction. For example, using those receipts to encourage
economic activity (perhaps by reducing taxes on capital or labor) would lead to lower total costs than using those receipts to offset the
distributional effects of the policy.
45
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Emissions Links
Attempts to decrease emissions devastate the budget.
Margo Thorning (American Council for Capital Formation Senior Vice President and Chief Economist, Ph.D)
September 1999, http://www.accf.org/publications/reports/sr-ccp-fedbudget99.html
In light of the current debate about how to use the projected federal budget surpluses, policymakers need to consider the potentially
large negative impact on GDP growth and federal budget receipts of proposals that address the potential threat of global
warming by requiring sharp, near-term cutbacks in CO2 emissions. A report by the Congressional Budget Office (CBO) shows that if
economic growth slows relative to the baseline forecast and GDP were 4 percent lower in 2009, the projected on-budget (excluding
Social Security contributions) surplus virtually disappears, dropping from $178 billion to only $18 billion (see Figure 2). Similarly, if GDP
falls by 3 percent, the surplus declines to $58 billion in 2009 (2009 is the last year of the current CBO forecast). Therefore, implementation of
the Kyoto Protocol would make it much more difficult to sustain tax cuts, "save" Social Security, promote the retirement security of the baby
boom generation, or achieve other public policy goals, and could require sharp changes in fiscal policy in order to avoid deficit spending.
46
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Regulations***
47
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Regulations
Reductions would shrink the economy, hamper living standards, crush consumer
confidence, and raise electricity prices.
Oil & Gas Journal, Margo Thorning, American Council for Capital Formation, Center for Policy Research.
December 13, 1999
US consumers suffer declines in wage growth, and the distribution of income worsens under CO[2] stabilization
policies. Yohe estimates that reducing emissions to 1990 levels (President Clinton's pre-Kyoto target) would
reduce wage growth by 5-10%/year, and the lowest quintile of the population would see its share of the economic
"pie" shrink by about 10% (Yohe 1997). Texas A&M University Prof. John Moroney estimates that US living
standards would fall by 15% under the Kyoto Protocol compared with the base-case energy forecast (Moroney
1999). US households also face much higher prices for energy under near-term stabilization. A range of estimates
by various analysts concludes that prices for gasoline would rise by anywhere from almost 30% to over 50% and
that electricity prices would go up by anywhere from 50% to over 80% (Fig. 3). The CEA predictions (a 2.7%
increase in gasoline prices and 3.4% higher prices for electricity) are far below those of widely respected climate
policy modelers.
Regulations would raise electricity prices, hurting consumers and crushing the job market.
Margo Thorning, Ph.D Senior VP and Chief Economist for American Council for Capital Formation. Federal
News Service March 31, 2000.
Cutting back emissions requires raising energy prices in order to reduce demand. According to most models, U.S.
households and businesses would face sharply higher costs for gasoline and electricity. Prices for gasoline under
the Kyoto emissions target would increase by as much as 53 percent and electricity prices would increase by 86
percent in the EIA projection (see Figure 5). When Annex I trading is allowed, prices go up a bit less sharply,
according to other policy experts. For example, the DRI estimates show a 29 percent price increase for gasoline
and a 54 percent increase for electricity prices. Again, the Administration's estimates of cost increases for energy
(2.7 percent for gasoline and 3.4 percent for electricity) are far below those of other models, including those of
EIA. Impact on Employment, Consumption, Income Distribution, and Living Standards Policies to curb emissions
to meet the Kyoto target would have a significant impact on U.S. households' economic well-being and living
standards, as well as negatively affect the distribution of income. For example, estimates of job losses range from
1.3 million (Brinner/DRI) to 2.4 million (Novak/WEFA) by 2010. Consumption by U.S. households falls by over 2
percent under the Kyoto emissions target, according to DRI.
48
UMKC SDI 2008 Economy Disadvantage
LouGie’s
49
UMKC SDI 2008 Economy Disadvantage
LouGie’s
50
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Regulations Snowball
Regulations on fossil fuels snowball.
Gannett News Service May 28 2004
In contrast, conservatives charge, Kerry supports costly environmental regulations that could shut down power
plants and cost jobs. Kerry's support for reductions in the carbon dioxide emissions that cause global warming is
especially dangerous, said Marlo Lewis, a senior fellow for the Competitive Enterprise Institute, a free-market
think tank that opposes most federal environmental regulation. Regulating carbon dioxide would be disastrous for
the U.S. economy, Lewis said. "All our major fuels -- oil, coal or natural gas -- are carbon based," he said. "So
once you start regulating energy production based on carbon, there's no logical stopping point short of total
suppression of these fuels."
Carbon Caps would pave the way to more reductions locking the US into other countries’
regulatory demands.
Margo Thorning (Senior VP for the American Council for Capitol Formation) June 5 2003 FDCH
Congressional Testimony
Proponents of carbon emission caps for the utility sector argue that eventually the U.S. will decide to impose
carbon caps and that utilities would feel that "safer" about investing if they were told now what the carbon
reduction target would be. The argument has several weaknesses. First, imposing carbon caps such as those
proposed by Senator Jeffords, which requires a reduction in CO2 in the range of the cut required by the Kyoto
Protocol would be just the first step in a series of ever more severe emission reductions (see Figure 1). This agenda
was clearly understood by the architects of Kyoto in 1997. For example, Tim Wirth, the former Clinton
Administration climate policy negotiator, testified in 1997 that carbon emissions had to be cut by up 10 times the
Kyoto target (a 70 percent reduction). The UK has recently announced a target of a 60 perecent reduction by 2050.
Adopting a proposal such as S. 366, which requires cuts almost as large as the Kyoto Protocol would increase the
pressure on the U.S. from the European Union to adopt the EU's next emission reduction target for the second
commitment period. The EU is expected to push for a 60 percent reduc- tion from 1990 emission levels by the year
2050 at the COP 9 meeting later this year in Italy. Thus, even if the U.S. imposes a carbon cap like that in S.366,
there can be no certainty those caps will hold in the future and that the goal posts will not be moved back in
response to pressure from the EU.
Even small plans targeted at one industry can spillover and effect others
Thomas G. Marx (manager in the Public Policy Center for the Global Climate Issue for General Motors Corp) July
1999 The Role of Technology In Responding to Concerns About Global Climate Change, www.accf.org/marx.pdf,
accessed 8/27/02
While manufacturing’s dominance of total energy use suggests a reason to focus on that subsector of industry, it is
important to note that energy and technology policies directed at one area could have a spillover effect that
negatively affects other lower energy-consuming subsectors. While some industries may not consume as much
energy or emit as much carbon, policies affecting energy prices and availability may have a disproportionately
large effect on them. Some of these smaller energy users can be significant players in economic terms. Thus, well-
meaning energy policies with potentially modest economic impacts in one industrial area could have unintended
devastating economic impacts in another. The potential for crosssectoral problems and the difficulty in easily
identifying them is inherent in the complexity of the industrial sector.
51
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Steel 2nc
Mandatory emissions reductions crush the steel industry.
Heather Villanova 2000 Villanova Environmental Law Review, 11 Vill. Envtl. L.J. 161
The Protocol negatively affects the United States steel industry in two ways: (1) the mandatory reductions make the current coke
process economically infeasible and (2) the increase in the cost of energy makes the price of steel rise. These effects
economically disadvantage the United States steel industry while benefitting rival steel companies in developing nations,
such as China, India, Brazil, and South Korea, because these rival steel companies are not bound to the mandatory regulations of the Protocol.
As a consequence of this disadvantage in the international market place, steel production will shift to developing nations. As more
production shifts, the more American steel plants will close down and the more jobs will be lost. The Protocol will also
cause the steel industry's independent efforts to decrease pollution and invest in energy-saving technology to screech to a halt. The United
States steel industry will unjustly take a stronger beating from the Protocol than most other countries. This result is inherently unfair. A. The
Protocol's Effect on the Coke Process The coke process includes the burning of coal which produces more carbon dioxide than any other
fossil fuel. Coke ovens in the United States have become increasingly more environmentally sound since their invention. These ovens,
however, will not meet the Protocol's mandated reductions. In order to satisfy the Protocol, the coke ovens must be equipped with a "filtering
process" to eliminate particles from entering into the environment. Improving the filtering process is difficult because it is not technologically
possible and, even if it is technologically possible, it is not cost-effective. It is economically infeasible for the steel industry to add such a
filtering process because the coke ovens have evolved to a point where new technology would be costly. If the steel industry cannot meet these
regulations, it will be penalized either through fines or through verdicts against it in civil suits. Due to its inability to comply with the
mandatory regulations, the steel industry's coke process will be shut down. The steel industry's termination of the coke
process will devastate the industry in the United States. The coal industry mines coal for two purposes: (1) the production
of coke and (2) the production of electricity. If the steel industry no longer produces coke, the coal industry will lose the
majority of its business. An alternative to the coke process in the production of steel is the use of scrap metal in mini-mills. Mini-mills,
however, do not provide an adequate substitute because: (1) mini-mills have a lower output rate of steel per year; (2) there is a limited amount
of scrap metal, an essential ingredient for mini-mills; and (3) mini-mills can produce only limited finished products. For example, mini-mills
cannot produce steel for the production of structural members such as i-beams. Since the production of steel requires coke, United
States steel companies will have to import coke from other countries. The importation of coke will increase steel
production costs and place its foreign competitors even further ahead in the global market place.
52
UMKC SDI 2008 Economy Disadvantage
LouGie’s
53
UMKC SDI 2008 Economy Disadvantage
LouGie’s
54
UMKC SDI 2008 Economy Disadvantage
LouGie’s
55
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Agriculture 2nc
Regulations on emissions would crush the competitiveness of the US agriculture industry
leading to higher energy costs and food price blips.
Margo Thorning (Analyst American Council for Capital Formation, Center for Policy Research) December 13
1999 Oil & Gas Journal
US agriculture would also lose competitiveness if the US were to comply with the Kyoto Protocol. A study based on the
DRI model by Terry Francl of the American Farm Bureau Federation, Richard Nadler of K. C. Jones Monthly, and Joseph Bast of the Heartland
Institute (FNB), predicts that implementation of the protocol would cause higher fuel oil, motor oil, fertilizer, and other farm
operating costs (Francl, Nadler, and Bast 1999). This would mean higher consumer food prices and greater demand for
public assistance with higher costs. In addition, by increasing the energy costs of farm production in America while
leaving them unchanged in developing countries, the Kyoto Protocol would cause US food exports to decline and imports
to rise. Reduced efficiency of the world food system could add to a political backlash against free-trade policies at
home and abroad. Further, the higher energy costs, notes the FNB analysis, together with the reduced domestic and export
demand, could lead to a very severe decline in investment in agriculture and a sharp increase in farm
consolidation. Small farm numbers likely would decline much more rapidly than under baseline conditions, while investment
even in larger commercial farms likely would stagnate or decline.
56
UMKC SDI 2008 Economy Disadvantage
LouGie’s
57
UMKC SDI 2008 Economy Disadvantage
LouGie’s
58
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Rising food prices starve one billion and triggers riots and civil disintegration
Christian Science Monitor April 3, 1996
If food prices continue to rise, both sides agree, the hardest hit will be the world's poorest billion people, who
subsist on less than a dollar a day and for whom continuing price increases could have catastrophic consequences.
Behind food shortages and higher prices lies the risk of political instability in poor nations. When prices go up,
governments are held accountable. The result could be urban food riots like those that have challenged civil order
in countries ranging from Egypt to Zambia.
59
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Café Links***
60
UMKC SDI 2008 Economy Disadvantage
LouGie’s
61
UMKC SDI 2008 Economy Disadvantage
LouGie’s
CAFÉ standards would bury the US auto industry and place foreign automakers firmly in
the lead
Andrew Kleit (Professor of Energy and Environmental Economics at Penn State) January 10, 2003 “CAFÉ
Changes by the Numbers”. Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf
The cafe standards affect the mix of vehicles produced by a manufacturer, but not the overall production of any
particular type of car. That is important to remember because, as explained earlier, domestic firms will feel
constrained by the new standards but foreign firms will not. The constrained U.S. firms will be forced to increase
their fuel efficiency, leaving an undersupply in the large-car market. In turn, foreign firms will move into that
market and begin producing vehicles with lower fuel efficiency. Though the cars will have a slightly higher price
because of cafe fines, they likely will still appeal to consumers, so the overall mix of cars being sold will not
change nearly as much as what cafe proponents expect. Foreign automakers stand to draw a lot of profits away
from U.S. firms if stricter cafe standards are adopted. Honda and Toyota, for example, have fleet averages now
that likely would satisfy any new standards that Congress might pass, hence the automakers would have no
disincentive to try for a larger share of the U.S. large-car market. (In fact, they may feel they need to move into
that market because U.S. automakers will be moving into the small-car market.) Even if the foreign automakers’
fleet averages would not satisfy the new standards, the automakers likely would pay the relatively small mileage
fines in order to have a larger share of the market.
62
UMKC SDI 2008 Economy Disadvantage
LouGie’s
CAFÉ regulations alienate consumers because automakers must continually mix-shift their
products.
Andrew Kleit (Professor of Energy and Environmental Economics at Penn State) January 10, 2003 “CAFÉ
Changes by the Numbers”. Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf
Finally, café standards are, in large part, unworkable because demand can shift much more quickly than a
manufacturer’s ability to alter the fuel use of its vehicles. For example, it would take a firm three to five years to
re-engineer its cars so that, at current demand levels, the fleet would satisfy a new standard. But consumers can
change their buying habits in an extremely short period of time and can buy a mix of cars very different than what
automakers expected. Automakers, through no fault of their own, could face short-run cafe problems that they
could address only through “mix-shifting” — selling fewer large cars and more small cars by raising prices on the
former and lowering them on the latter. Because mix-shifting annoys consumers and reduces industry
employment, the government has little choice but to grant the automakers relief, or else the politicians will permit
serious unemployment and economic harm.
63
UMKC SDI 2008 Economy Disadvantage
LouGie’s
64
UMKC SDI 2008 Economy Disadvantage
LouGie’s
65
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Massive CAFÉ standards would damage the economy to the tune of 9 billion dollars.
Andrew Kleit (Professor of Energy and Environmental Economics at Penn State) January 10, 2003 “CAFÉ
Changes by the Numbers” Regulations Magazine. http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf
Increasing the cafe standards by 50 percent would cause far more harm to the economy. I estimate that passage of
the Kerry proposal would have reduced annual profits at General Motors by $3.824 billion, at Ford by $3.423
billion, and at Chrysler by $1.959 billion. Total losses to U.S. automakers would amount to $9.206 billion. In
contrast, foreign manufacturers would see an increase in profits of $4.434 billion.
CAFÉ standards would hurt the auto industry by limiting production and eliminating jobs.
The Times October 5 2003
Barthmuss said GM does not want to see federal regulations on fuel economy. GM and United Auto Workers
officials have said higher CAFE standards could eliminate jobs in the auto industry because that would raise the
cost of building vehicles and production could be cut. "We don't believe a mandated approach to fuel consumption
is the right approach," Barthmuss said. "It fails to take in factors like safety equipment (which adds weight to the
vehicle) and it takes away from consumer choice."
66
UMKC SDI 2008 Economy Disadvantage
LouGie’s
67
UMKC SDI 2008 Economy Disadvantage
LouGie’s
68
UMKC SDI 2008 Economy Disadvantage
LouGie’s
prototype U.S. automakers and the big automotive unions have persuaded Congress not to raise fuel-efficiency
—
standards since the late 198os. Why? Among other reasons, because any regulations requiring greater fuel ef-
ficiency will initially favor Japanese and German automakers, whose fleets are already more fuel-efficient —
thereby costing U.S. companies more of their market share and U.S. auto workers more of their jobs. And such
losses are not inconsequential to American politicians. Since 1990, the U.S. transportation industry has made more
than $256 million in campaign contributions. Whereas nearly 70 percent has wound up with Republicans,
Democrats haven’t been shy about asking for auto dollars, especially from the auto workers’ unions. No surprise
that CAFE has never come close to being updated.
69
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Internals***
70
UMKC SDI 2008 Economy Disadvantage
LouGie’s
71
UMKC SDI 2008 Economy Disadvantage
LouGie’s
72
UMKC SDI 2008 Economy Disadvantage
LouGie’s
73
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Strong consumer confidence prevents small recessionary blips from turning deadly.
Farooq Kathwari (Chairman and CEO of Ethan Allen Interiors) march 5 2002 CNBC
Well, I must tell you that I have been somewhat pleasantly surprised at the consumer attitudes during this
recession. I believe that during the last recession, about 10 years back or even going 20 years back, people who
had jobs were also concerned. There were much more concerned than we see today. So while we've had a
recession, our sales, for instance, last quarter were down just about four percent from record highs the year before.
So, I think we have fared well during the slowdown and I think it's because of the fact that the consumer attitude is
much better. That is, those people who have jobs don't think a depression is coming, which was the case, I think,
about 20 years back. And I think that attitude has helped us maintain strong consumer confidence or, I would say,
stronger consumer confidence and buying. So coming out of this which, I think we are towards the tail end of this
recession, I believe we are positioned well as we go forward.
Consumer spending has empirically been key to keeping the economy afloat through tough
times.
Business Week April 12 2004
As the U.S. has struggled to right itself from the recession of '01, consumer spending has stood out as the one
bright spot for the economy. While America's dogged shoppers pulled back in the wake of September 11 and in the
runup to last year's Iraq war, overall spending never actually fell. That gave much-needed support to the rest of the
economy. Now, consumers once again face obstacles to their free-spending ways -- specifically the painfully slow
improvement in the job market, high levels of personal debt, and the pinch consumers would feel if inflation and
interest rates were to shoot up. ''Households are pretty stretched,'' says Paul Kasriel, chief economist at Northern
Trust Co. in Chicago. ''That's a risk to consumer spending.'' Fueling such concerns: a Mar. 26 Commerce Dept.
report that consumer outlays from January to February were essentially flat after stripping out the effects of
inflation.
74
UMKC SDI 2008 Economy Disadvantage
LouGie’s
75
UMKC SDI 2008 Economy Disadvantage
LouGie’s
76
UMKC SDI 2008 Economy Disadvantage
LouGie’s
77
UMKC SDI 2008 Economy Disadvantage
LouGie’s
78
UMKC SDI 2008 Economy Disadvantage
LouGie’s
79
UMKC SDI 2008 Economy Disadvantage
LouGie’s
80
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Sector Internals***
81
UMKC SDI 2008 Economy Disadvantage
LouGie’s
More Evidence
The Washington Times October 2 2002
Physical security of power plants is just one component of our overall energy security. Energy is the vital
foundation of America's national security and economy, with reliable electricity providing the foundation and
spark for our technology-driven society. Nuclear energy is essential to the U.S. economy, providing electricity for
one of every five homes and businesses.
82
UMKC SDI 2008 Economy Disadvantage
LouGie’s
83
UMKC SDI 2008 Economy Disadvantage
LouGie’s
84
UMKC SDI 2008 Economy Disadvantage
LouGie’s
The electricity industry is one of the most important industries to the US economy.
John Podesta (former Chief of Staff for Clinton) July/August 2003 Foreign Affairs
The electricity distribution system in the United States is perhaps the most underappreciated and vulnerable part of
the country's national infrastructure. In this digital age, the need for high-quality, reliable electricity makes the
transmission grid almost as vast and as important as the highway system. The electricity business now generates
$224 billion a year in revenues, accounting for about four percent of the U.S. GDP. Its value to the economy is
multiples of its cost.
More Evidence
Business Wire October 20 2003
"As recent news events have shown, the power generation industry is a critical lifeline for the U.S. economy. Just
as businesses rely on power companies to provide reliable, competitively priced electricity, those companies
serving the power generation industry rely on scalable, failsafe communications for their operations," SAVVIS
President & COO Jack Finlayson said. "With Babcock Power's selection of SAVVIS, Babcock can concentrate on
delivering its products and services to its power generation customers while they rely on SAVVIS to manage their
communications infrastructure to stringent performance metrics."
85
UMKC SDI 2008 Economy Disadvantage
LouGie’s
86
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Messing with the auto industry would devastate the economy by crushing consumer
spending and mortgage lenders.
CNNMoney.com July 16 2004
Still, Ford raised its earnings guidance for the quarter a month ago, and GM has said that it still anticipates to hit
its earlier guidance for earnings growth for the second quarter and the year, and that it is still aiming for strong
earnings growth to $10 a share by 2006. Analysts have forecasts at the high ends of both companies' guidance.
Why they matter: The U.S. auto industry is still both a key building block of the economy, as well as an excellent
indicator of consumer spending. Spending on motor vehicles and parts represented almost a quarter of retail sales
last year. Rising interest rates can also hit results at the automakers. Besides increasing the cost of zero-interest
financing packages being offered to consumers, rising rates could hurt the nonauto finance business of General
Motors Acceptance Corp., one of the nation's largest mortgage lenders. GMAC and Ford Credit have been
important drivers of the two companies' profits in recent years.
87
UMKC SDI 2008 Economy Disadvantage
LouGie’s
88
UMKC SDI 2008 Economy Disadvantage
LouGie’s
89
UMKC SDI 2008 Economy Disadvantage
LouGie’s
90
UMKC SDI 2008 Economy Disadvantage
LouGie’s
91
UMKC SDI 2008 Economy Disadvantage
LouGie’s
92
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Even if renewables are ready it takes years for the market to embrace and invest, making
economic benefits long-term.
Ross Gelbspan (editor and reporter at The Boston Globe and The Washington Post and professor at the Columbia
University School of Journalism) 1997 The Heat is On, p. 96
The biggest danger to the U.S. economy, Marvin believes, is not the switch away from fossil fuels. The danger lies
more in losing our competitive position as a leading producer of alternative energy technologies to other countries
that are now making major investments in them. Wind turbines, for instance, already constitute Denmark’s ninth
largest export, while Japanese investment in solar technologies is soaring. Marvin dismisses the assertions of oil
and coal lobbyists that renewable energy sources are not yet sufficiently developed to meet the world’s energy
needs. “Most forms of renewable energy are already proven,” he says. “But there is a ten-year window between
the readiness of the technology itself and the readiness of the market to embrace it. Currently, utilities are skittish
because they are still paying off debts from their earlier investments in nuclear plants. Couple that situation with
the new deregulation of electric utilities, and there’s a natural reluctance to make big investments in renewable
energy sources until the industry sees how the new structure shakes down.” Noting that some photovoltaic
facilities now produce electricity at 3.2 cents per kilowatt-hour—a price which is competitive with most utilities—
and that large wind installations can produce it for 3 cents—Marvin says the public “should not fear leaving a
coal-based economy. It is not nearly as hard as it might seem. It need not be that disruptive to the economy.”
93
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Renewables have zero positive effect on competitiveness. If fact, they hurt the economy
Robert Bradley, president of the Institute for Energy Research, adjunct scholar of the Cato Institute, Renewable
Energy: Not Cheap, Not “Green,” Cato Policy Analysis No. 280, August 27, 1997,
http://www.cato.org/pubs/pas/pa-280.html
A jobs-creation rationale for wind power is marshaled by supporters, almost as a last line of defense. The American Wind Energy Association
trumpets the fact that about $3.5 billion is invested in the U.S. [wind- power] industry, where watt-for-watt, dollar-for-dollar, that investment
creates more jobs than any other utility-scale energy source. In 1994, wind turbine and component manufacturers contributed directly to the
economies of 44 states, creating thousands of jobs for American communities. The high-cost propensity of wind power is a
negative, not a positive, aspect of the industry. Prices reflect relative scarcity, and the price of wind-power energy
is substantially higher than the price of electricity from other sources. Resources devoted to wind power are thus
wasted in an economy where wants are greater than the resources available to meet them, and better alternatives are forgone. Without
subsidies, less renewable energy infrastructure would have been built and consumers would have had lower cost electricity. The saved
resources (land, labor, and capital) would have gone to a more competitive source of electricity or, more likely, given electricity-generation
overcapacity, to a different endeavor entirely. Electricity consumers, in turn, would have incremental savings to spend
elsewhere in the economy. The result of wind-power investments in California is the existence of an uneconomic renewable energy
industry and an underused natural gas infrastructure. Consequently, it has contributed to artificially high rates and a substantial ratepayer
surcharge for stranded cost recovery (jargon for generation facilities and third-party contracts incapable of delivering power at competitive
prices in a restructured market; utility companies argue that the public should compensate them for those now uneconomic investments) in the
restructuring period. Subsidizing renewable energy for its own sake is akin to "creating" jobs by digging holes and filling them back up. The
fundamental law of economic efficiency--"employ[ing] the available means in such a way that no want more urgently felt should remain
unsatisfied because the means suitable for its attainment were employed for the attainment of a want less urgently felt" --is violated. Proponents
of renewable subsidies argue that if the subsidies do not continue, U.S. firms will lose out to foreign firms whose governments will continue to
subsidize them. Tax incentives and government grants are sparking new wind-power capacity in a variety of countries. The subsidies have
resulted in "many strong European and Japanese competitors in the market place . . . actively marketing products internationally." Concluded
the Yergin task force, Continued cost reductions fostered by [DOE's] strategic research, development, and deployment activities can ensure the
United States a place in an emerging multibillion-dollar clean energy market. The establishment of footholds by U.S.-based firms in
international sales activity is clearly vital. Warnings that foreign companies will replace U.S. renewable energy companies
just when commercialization is in sight have been heard since the 1980s --another argument that is wearing thin. Not
surprisingly, however, U.S. companies are finding the best markets abroad where electricity is more scarce and the
cost of new power is higher. Whereas almost 80 percent of the world's wind-power capacity was based in the United States in 1990, less
than 50 percent is in the United States today. If U.S. subsidies contract, the wind-power industry will likely be a foreign-
subsidized experiment rather than a U.S.-subsidized experiment as in the past. Today's renewable export industry is a
very small portion of total U.S. energy-related export activities. A $500 million annual renewable export industry
accounts for under 1/10 of 1 percent of the total U.S. export market. Unwise and uneconomic subsidies abroad do not justify
unwise and uneconomic investments at home. Should foreign subsidies result in major technological breakthroughs to make
wind power economically and environmentally viable in niche markets, the United States can "free ride" by importing the
technology or equipment, or both. U.S. ratepayers and taxpayers would be spared, and, in fact, U.S. consumers would have been
advantageously subsidized by foreign taxpayers or ratepayers.
94
UMKC SDI 2008 Economy Disadvantage
LouGie’s
95
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Solar power can’t provide significant energy on its own and is expensive
Robert L. Bradley (president of the Institute for Energy Research) August 27, 1997,
http://www.cato.org/pubs/pas/pa-280.html
Weighing in at 358 MW nationally, bulk or central-station solar power (power generated at a large-scale
centralized location and then transmitted on the power grid to multiple users) represents .05 percent--1/20 of 1
percent--of total U.S. generation capacity. Solar generation of 824 million kWh in 1995 was under 3/100 of 1
percent of national electricity production, one-fourth the size of the tiny wind-power industry (see Appendix,
Tables A.2 and A.3). Like wind power's, solar's long-promised commercial viability has not occurred, [161] and
potential market share has been grossly overestimated. [162] Solar power is substantially less economic than wind
as a central-station power source, although its cost fell from around 25 cents per kWh in the early 1980s to a
claimed 8 cents per kWh a decade later. [163] Unlike wind-power capacity, new solar-power capacity is triple the
cost of new gas-generated electricity and quadruple the cost of surplus power. Solar power, like most other
renewables, is geographically limited for the foreseeable future. In the United States, central-station solar power is
limited to the desert Southwest and other selected locales and often involves transmission investments that custom-
sited gas-fired plants can avoid. States such as California and Nevada are swimming in economy energy at 2 cents
per kWh, [164] an insurmountable barrier for cost-effective central-station solar under any conditions. Greater
potential may exist abroad where power needs are greater (one-third of the world's population remains without
electricity), desert areas are more common, electricity is more scarce, and natural gas is not indigenous. Even then,
solar power is only a daytime electricity source, and intermittent at that, unless fossil-fuel generation, pumped
storage (very expensive), battery storage, or nuclear power provides back-up reliability.
96
UMKC SDI 2008 Economy Disadvantage
LouGie’s
97
UMKC SDI 2008 Economy Disadvantage
LouGie’s
98
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Answers to Answers***
99
UMKC SDI 2008 Economy Disadvantage
LouGie’s
100
UMKC SDI 2008 Economy Disadvantage
LouGie’s
101
UMKC SDI 2008 Economy Disadvantage
LouGie’s
102
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Impacts***
103
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy First
Short term economic impacts destroy the chances to solve long term. Your plan will be
rolled back
John E. Brandenburg and Monica Rix Paxon (physicist rocket scientist, Mars expert, investigator on MET
project, NASA technical advisor, former member of space transport subcommittee) 1999 Dying Earth, p.248 - 249
If we are to have any hope of avoiding famine and economic chaos, we need a solution which maintains a strong
economy, because economic pain is real pain, It puts people out of work, it kills hope, it destroys families and
health. Equally damaging, it kills the possibility of commitment to an energy transition. Underfed, underpaid, cold
humans will tend to choose short-term comfort over longer-term solutions, even those which might bring a
warmer, more prosperous future. So, those who speak glibly of revamping the economy to use drastically less energy are a bit like
those who minimize the effects of global warming—they either lack imagination or simply misunderstand the human condition. This is not an
argument against conservation and greater efficiencies, both of which will help delay the effects of fossil fuels, create profits for companies and
savings for everyone in the process. However, ultimately, as a single strategy, limiting energy use leads to a dead-end when
growing populations or expanding economies exceed the net energy benefit from any conservation or energy-
efficiency gains. Therefore, unless we can enforce limits on population and growth, as a bottom line we will need a vast new source of
power and fuel, and if the majority of our efforts have been placed just on conservation, we may fail to come up with the alternatives we so
desperately need.
104
UMKC SDI 2008 Economy Disadvantage
LouGie’s
105
UMKC SDI 2008 Economy Disadvantage
LouGie’s
106
UMKC SDI 2008 Economy Disadvantage
LouGie’s
107
UMKC SDI 2008 Economy Disadvantage
LouGie’s
108
UMKC SDI 2008 Economy Disadvantage
LouGie’s
109
UMKC SDI 2008 Economy Disadvantage
LouGie’s
110
UMKC SDI 2008 Economy Disadvantage
LouGie’s
111
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Unemployment Impacts
High levels of unemployment risk nuclear war
Mead 1994 (Walter Russell- Senior Fellow at Council on Foreign Relations, “ECONOMIC POLICY INSTITUTE
SEMINAR AND NEWS CONFERENCE REGARDING G-7 JOBS CONFERENCE IN DETROIT,” Federal News
Service, Mar 11)
Okay, well, as I listened to people talk this morning, I was very happy to hear that we're saying that unemployment
is more than a national problem and more than a simple economic problem, that the question of mass
unemployment concentrated primarily among younger people and having an inevitable consequence of falling
wages and work opportunities for the general population is also, in the long run, a threat to the democratic
legitimacy of Western governments. This is not simply a technocratic, economic problem that we want to adjust 2
percent here or 1 percent there. This really goes to the heart of the question of the long-term survival of a lot of the
values that we have and a lot of the institutions that we care about. I'd like to add to that that unemployment is not
unrelated to the question of world peace. We've had today hanging over us a couple of times mentions of hundreds
of millions of people in developing countries who would like to join the advanced industrial democracies in their
standards of living. We've spoken of the former communist states of Europe, all of whom are looking for a place at
this table. Our modern economic system originated after the second world war with some very important insights,
where people looked at why did the world get into World War II. And a big answer was the mass unemployment of
the '30s that led to fascism, that led to a climate of international confrontation, and ultimately led to war. And the
idea that full employment was central to concept of building peace after the second world war. Today we tend to say
that if you can get full employment at all it will follow free trade, if you -- you know, except for low interest rates and GATT there is essentially
no Western program today for jobs. This is putting the cart before the horse in the view of the people who sort of originally designed the post-
war system, where they said that free trade was actually a consequence of full employment rather than a cause of it. And I think you can still
see that in that the ink is hardly dry on the Uruguay Round agreement when the United States and Japan are firing opening volleys in a trade
war. So we are talking about the viability of our democratic systems of government and we are talking about world
peace when we are talking about unemployment. What is so interesting is the -- and alarming, is the enormous gap between the
gravity and intractability of the problem and the very small scale measures being proposed to deal with it. I suspect that we will see out of this
job conference a very few recommendations coming forward on improving the efficiency of labor, sort of marginal improvements, and there
will be essentially a throwing up of the hands in despair about this thing. All of us have spoken more or less this morning about the need for
some kind of G-7 cooperation, international cooperation here. We've been talking about this for a long time, really since the Bretton Woods
system broke down in the early 1970s. There have been a whole series of efforts to create some kind of international economic cooperation
among the leading economies, and they have generally ended either in disaster or in platitude -- sometimes in both. I think there is a reason for
this; the reason is the fallacy of composition, a fallacy of composition similar to the one that Keynes looked at, talking about how a nation can
save itself into poverty, that when times are bad what makes sense for the individual household or firm is to cut back on expenses, to draw in
your horns; if you're a firm to defray any new investments, and so on. This exacerbates the national problem as people stop consuming and
investing. In the same way, when you have a difficult global economic climate, it makes sense for each country to try to bolster up its own
finances, its own balance of trade. We've seen plenty of competitive devaluation. Indeed, here we are sitting in the international capital of
competitive devaluation, widely considered in the '30s to be the most evil of all protectionist schemes, today endorsed and praised to the skies
by people who enjoy reputations, even among financial journalists, if I can say so, as free traders. Competitive devaluation is a tariff, it is an
attack on free trade. And yet somehow today this has become a normal part of international economic planning. What is needed? Just as
Keynes argued that you needed a macroeconomic policy agency looking at what is good for the entire national economy, you also need to have
agencies in the world economy, in the global economy, whose mandate is for the health of the overall global economy. The World Bank and the
International Monetary Fund, the EBRD, the Inter-American Development Bank can all, I think, play a constructive role in this, although they
need to have somewhat larger resources and to take a broader view of their mandates in some cases. But I think we need to clearly get beyond
this notion of ever six months finance ministers sit down and issue a platitudinous communique saying, you know, basically all bad things
should be reduced and all good things should be increased, and then we all go home. If we can't provide institutional, ongoing agencies for
international cooperation, then we might as well just write the whole thing off. People have spoken about ideas like a global central bank. I
would simply like to suggest here, rather than prescribing a lot of things, that there are ways in which a more demand-oriented, expansionary-
oriented program can also be a more market-driven program and can reduce trade tensions as well as employment tensions among advanced
countries. To give you just a quick example, that instead of the advanced countries spending their time squabbling with each other over
agricultural subsidies, it might be interesting to look at consumption subsidies for developing countries for hungry people, underfed people in
the developing world. The same money now spent, essentially wasted, on agricultural subsidies for producers, if pumped onto the consumption
side of the equation could reduce regulation, free up agricultural trade, and even potentially raise incomes of farmers in developed and
developing countries. There are ways in which institutions with a global mandate and whose basic charter is concern for the health and growth
of the overall global economic system can relieve us of some of our problems and address even some of our
particularly pressing political problems, such as the chaos and desperation that is threatening to turn Eastern
Europe into an arena of, God forbid, nuclear war, but to make Yugoslavia, to make the Bosnian mess look like
nothing, like an English soccer riot.
112
UMKC SDI 2008 Economy Disadvantage
LouGie’s
113
UMKC SDI 2008 Economy Disadvantage
LouGie’s
114
UMKC SDI 2008 Economy Disadvantage
LouGie’s
***Affirmative Answers***
115
UMKC SDI 2008 Economy Disadvantage
LouGie’s
116
UMKC SDI 2008 Economy Disadvantage
LouGie’s
117
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy down
Mark Basch 7/21/08 The Florida Times-Union, Indicators hint weak economy will continue,
http://www.jacksonville.com/tu-online/stories/072208/bus_307284281.shtml
The outlook isn't any better nationally. "The domestic economy is showing no sign of strength," Conference Board
economist Ken Goldstein said in a press release. In addition to problems in the housing and banking markets, Goldstein also
cited high gas and food prices, a weak dollar and weak consumer confidence. "It wouldn't take much to push the economy
so that it's even weaker in the second half of 2008," he said.
118
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Dollar Down
The dollar is low and will continue to do so.
Kim-Mai Cutler and Stanley White 7/22/08 Bloomberg News, Dollar Near Record Low as Wachovia, WaMu
May Report Losses, http://www.bloomberg.com/apps/news?pid=20601101&sid=ab.ZPhRpeAC8&refer=japan
The dollar traded near a record low against the euro before reports from Wachovia Corp. and Washington Mutual
Inc. that may show they had combined second- quarter losses of $3.8 billion, raising concern the U.S. economic
slowdown will deepen. The dollar also slid against the yen before reports this week forecast by economists to
show that U.S. home sales and durable-goods orders dropped in June. The yen rebounded from a near a record low
against the euro, and the Australian dollar was near a 25-year high against the U.S. currency. ``The numbers out of
the U.S. are still pretty grim and there's no immediate prospect that things are going to get better,'' said Daragh
Maher, a London-based currency strategist at Calyon, the investment-banking arm of Credit Agricole SA, France's
second-biggest lender. ``This has been driving the dollar lower.''
119
UMKC SDI 2008 Economy Disadvantage
LouGie’s
120
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Non-unique- Confidence at lowest levels since 2001 terrorist attacks; little hope.
The Press April 23 2008 “Investors' spirits droop”
Investor confidence has plunged to its lowest levels since the 2001 terrorist attacks in the United States and the
dotcom technology share market bust. The ASB bank survey of investors slumped from a net 19 per cent positive about the future in
December, to a net 1% negative in the March quarter, according to a survey out today. Confidence has been hit by a combination of
factors including the sharemarket dive earlier this year, a weaker housing market, growing pessimism about the
economy, continuing finance company woes and the subprime mortgage and credit crisis in the United States. That
saw a sharp jump in investors expecting worse returns this year, according to the quarterly ASB Bank survey. The economy
is in a funk and for many this year will be grim, say Westpac Bank economists, who this week forecast growth of 1.4% this
year -- half the level seen last year.
121
UMKC SDI 2008 Economy Disadvantage
LouGie’s
122
UMKC SDI 2008 Economy Disadvantage
LouGie’s
123
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Business loves federal investing in alternative energy, it is the best way to jumpstart
business effectively.
Edward Markey (chairman committee on house select energy independence and global warming) April 16 2008
“promoting private investment in renewable energy projects”
Today, as President Bush gets ready to tell America that he has come around on global warming and that he supports freezing U.S. global warming pollution 17
years into the future, we welcome a group that does have the vision and ambition to seriously address this problem. These individuals probe the technological
trenches of Silicon Valley and other innovation hotspots to find the solutions that will solve the energy and climate crisis. They pull the strings of capitalism,
enabling ambitious young geniuses to turn today's dreams into tomorrow's technological realities. Venture capitalists play a key role in innovation. The $26 billion
in U.S. venture capital investment in 2006 represented less than 1 percent of U.S. GDP. But the $2.3 trillion in revenues these firms generated made up 18 percent
of U.S. GDP. Venture capital-backed companies employed over 9 percent of the U.S. private sector workforce, and job growth in these companies is occurring at
nearly three times the rate of the rest of the private sector. The corporate behemoths that dominate the business pages are mostly mature companies. They face fierce
competition that often forces them to outsource manufacturing in order to stay competitive. But low-wage developing countries cannot compete with an innovation
economy. Weshould salute the American entrepreneurs that for decades have pushed the American economy to the
technological edge, where wages and growth are high. The challenge today is to channel those creative energies to
help solve our global warming problem and to help put the economy back on track. Many of the technologies
under development by venture-funded firms are game-changing. They are technologies that will threaten the
energy establishment. As we heard from an Exxon executive last week, that company is investing $10 million a year-less than one tenth of one percent of
their $40 billion profit from 2007-to create an alternative energy future. I'm not a venture capitalist, but this business plan gets an "F" in my book. Not surprisingly,
by 2030, Exxon is not expecting alternative energy to play any significant part in their business. Alternative energy-any alternative-is a threat when you are raking
in the largest corporate profits in history. We can not expect these companies to be the innovators that will solve the energy and climate challenge. But the
planet's global warming cure is out there. It is in the mind of an innovator who will discover the world's most
efficient solar panel. It is in the mind of another innovator who will devise a manufacturing process that will cut
the cost of that solar panel in half. These infinite seeds of innovation will be sowed by venture capitalists that will
harbor entrepreneurs through the early periods when risk-averse commercial banks will steer clear. Governments
can take two approaches to solving great technical challenges like reducing global warming pollution. They can
prescribe the answer, for example by massively subsidizing nuclear power generation, as President Bush supports.
Or they can set a target and leverage the creative genius of the innovators of the world to find the answers. The first is
to cling to the technological past. It also means compliance at the greatest possible cost. That approach is akin to investing in a candle maker because Thomas
Edison's light bulb will never catch on. It is like doubling down on mainframes because you don't believe many people will want computers on their desks. We don't
know what all the answers will be to the global warming problem. But investing
taxpayers' dollars on yesterday's technologies will
ensure that the world's innovators will have to look outside the United States to find the markets they need to
develop tomorrow's great innovations. Unfortunately, the wider economic and job growth impacts of innovation will go to markets outside the
United States as well. This is something that the Big Oil and Big Business Bush Agenda simply does not understand. Leveraging private capital is the best chance
we have of finding the solutions that will save us from the worst effects of global warming. Public dollars cannot and should not bring this fundamental shift on
their own. A cap-auction-and-trade system that puts a price on carbon emissions that reflects the true costs of global warming is the most important step Congress
It will level the playing field for clean energy technologies and unleash the unequaled innovation of
can take this year.
the American entrepreneur. And it will give smart money-the venture capitalist- every reason to go searching for
those ambitious innovators.
124
UMKC SDI 2008 Economy Disadvantage
LouGie’s
125
UMKC SDI 2008 Economy Disadvantage
LouGie’s
No Economic Collapse
No chance of a large-scale economic downturn if US econ crashes; China and India’s
economies will ultimately stop the ripple effect.
Straits Times January 24 2008 “Economic worries cast pall over Davos; Glitzy annual forum kicks off with
debate on global impact of feared US recession”
DAVOS - THE annual gathering of the world's political and business elite opened here yesterday, with the dour outlook for the global economy
casting a pall over the glitzy event. As concern grew over the global stock market turmoil and a possible US recession,
the 38th World Economic Forum kicked off in this Swiss ski resort with a debate on the impact of a feared US
recession on the rest of the world. Economists, government officials and business bigwigs offered mixed views on
whether emerging markets such as China and India 'decoupled' enough from the US economy to withstand the
shock waves coming out of Wall Street. 'Decoupling is a fantasy. The rest of the world is not as resilient as some assume,' said Mr
Stephen Roach, the Asia chief of investment bank Morgan Stanley and a noted detractor of the decoupling theory. Mr Roach, who called
himself 'very bullish' on Asia, said the bottom line was that US consumption remained the key driver of world growth. US consumption is
worth $9US.5 trillion ($13S.6 trillion) compared with about $1US trillion in China and India's $650US billion, he pointed out. China and India
cannot yet step into the US' shoes, he said, predicting a 'mother of all recessions which would need a painful and lengthy workout period'.
Noted economist Fred Bergsten, the director of Washington-based Petersen Institute of International Economics,
staked his reputation on just the opposite. 'A global recession is inconceivable,' he said. With prime ministers, finance ministers, central
bankers and the creme de la creme of the private sector hanging on his every word, he made his case. 'If the US catches a cold, the rest
of the world will catch the sniffles, maybe. Not pneumonia, I would say. Not even a cold,' he said. 'The world has,
in fact, decoupled from the US,' he said, adding that 'spillover effect' would be the worst outcome of a US
recession. 'Fifty per cent of the world's economic growth now comes from China and India. Let's grant the
slowdown shaves off one percentage point of the emerging market growth.' In that case, he said, China may veer
off from 11.5 per cent growth to 10 per cent. India, which is not as integrated into the US economy anyway, may
stay unaffected. As a group, the emerging markets which include fast-growing economies such as Brazil and
Russia, will post a healthy 6 per cent to 7 per cent growth. So, if the US slows down to 1 to 2 per cent growth, the
world as a whole will still see 4 per cent growth, he said. 'Let us not extrapolate excessively the financial disruptions of the last
few days,' he said, referring to the Wall Street meltdown which prompted the Federal Reserve to aggressively cut interest rates. 'In fact,' he said,
'we may actually be looking at the first episode of reverse coupling where the growth in the rest of the world props
up the US and dampens its downturn.'
126
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Economy Resilient
The economy is resilient.
Mark Skousen 6/2/2003 http://www.markskousen.com/article.php?id=1096
The second lesson is that the global economy is far more resilient than anyone imagined. During the past 20 years,
we have suffered through two major energy crises, double digit inflation, stock market and real estate crashes in
the U.S. and Japan, an unprecedented credit crunch, mammoth federal deficits, the AIDS crisis, several major
wars, terrorist attacks, the collapse of the Soviet Union and many other mini-panics, and yet we continue to
survive and even prosper. We are not depression-proof, but we are surprisingly depression-resistant. Armageddon
has again been postponed.
127
UMKC SDI 2008 Economy Disadvantage
LouGie’s
A2: Recessions
The economy inevitably recovers from recession without impact
Peter Lynch (Vice Chairman Fidelity Management & Research) September 18 2001 ABC News, Good Morning
America
Well we--you may not and it may take a little while. It is going to be choppy. I mean, people aren't going to decide when they're seeing news
like this to go out and buy a sofa, go buy a refrigerator. It's just very discouraging. So that tends to slow consumer confidence. The confidence
of the consumer has been very high. We have record housing sales, housing prices have gone up the last few years. As much as the stock
market has gone down, housing prices--the average house has gone up more. So there's a lot of good things out there. The banking system is in
very good shape. We have a lot of positives. We've had nine recessions since World War II--this might be number 10--but we've
got out of every one of them. And the stock market usually looks forward. It doesn't look backward. So for a little
while look to this uncertainty, but then I'll say, 'What are we going to earn in 2003, 2004, 2005.' The market looks out, it doesn't
look backwards.
128
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Recessions Good
Recession is key to economic growth
Mark Rostenko (author and veteran floor trader at Chicago commodities exchange) 2002 “The Dips Don’t See a
Double Dip” http://www.gold-eagle.com/editorials_02/rostenko040402.html
The "job" of a recession is to clean the "fat" out of the system, mop up excess, and pave the way for the next expansion. Until
that process is complete, there isn't much from which a legitimate expansion can arise. Recessions put weak
companies out of business. In so doing, resources (skilled workers, capital) are freed up to be deployed more efficiently
elsewhere. For example, Wall Street analysts who touted bankrupt Internet stocks are redeployed at local fast food restaurants to serve people
in a capacity for which they are much better suited. Stronger businesses that have used the contraction to firm up their bottom lines and grow
more efficient are able to take advantage of these resources during the ensuing expansion. The economy emerges from a recession
leaner, more efficient and in good shape for the next wave of growth and progress.
129
UMKC SDI 2008 Economy Disadvantage
LouGie’s
Recessions Good
Recessions cleanse excesses before they become unmanageable
Stephen Roach (chief economist and director of global economics at Morgan Stanley Dean Witter) January 7
2001 The San Diego Union-Tribune
Obviously, a recession should be managed and contained. And if the Fed continues to cut interest rates over the next six months, as it should, it
would help set the stage for the next upturn. A mild recession, however, should not be feared. Recessions happen, and for a U.S.
economy plagued with excesses, a downturn may be the only way to purge these reckless tendencies. The United States
has had five economic downturns since the 1970s, and these almost always purged the very excesses that can be most hazardous to economic
health. In the past, the excesses took the form of unwanted inventories, vacant office buildings, unneeded factories or mounting inflation. The
Federal Reserve usually stepped in when these imbalances got out of hand. Monetary tightening led to cuts in production, bringing inventories
in better alignment with sales. Higher financing costs also tempered the zeal for overbuilding and for credit-based purchases of cars, furniture
and appliances. As output slowed, the unemployment rate rose and consumer confidence sagged. Broader cutbacks in personal spending and
capital spending then followed. As the recession deepened, demand was brought into better balance with supply, and inflationary pressures
receded. In essence, the economy was cleansed. As painful as this process was -- both in terms of lost jobs and reduced incomes -- it set the
stage for the next expansion. Today's excesses are different. First, Americans are not saving. As of November 2000, the personal
savings rate has gone negative, dipping to minus 0.8 percent of disposable personal income. Compare that to late 1994, when the
personal savings rate stood at 6.6 percent; over the previous 45 years it averaged about 8.5 percent. This plunge in savings reflects an
extraordinary disparity between trends in personal income and spending. Since 1995, consumer expenditures have increased 4.4 percent
annually, much faster than the 3.3 percent increase in disposable personal income. Never before have American consumers lived so
far beyond their means. This cannot persist. That takes us to a second weakness -- America's stock market bubble. From 1995 to
1999, the frothy stock market tempted many investors to forgo traditional savings strategies, like methodically setting aside funds from
paychecks. Instead, investors played the stock market and began to tap newfound wealth. Our estimates suggest that this "wealth effect"
boosted growth in real consumer spending by as much as one percentage point per year from late 1996 to mid-2000. The stock market,
however, can cut both ways. In the past 10 months, the market has plummeted -- Tuesday's surge notwithstanding -- and so has
consumer demand. The stock-market bubble went hand-in-hand with the hype over the so-called new economy, in
which many business executives decided that open-ended spending on computers and telecommunications equipments was the
recipe for higher productivity and instant prosperity. From 1995 to 1999, the Commerce Department estimates that such spending by
businesses and consumers, alike, accounted for fully 30 percent of the country's total economic growth. In the industrial economy, too much
capital spending was fully evident in idle factories. In the information age, these excesses have taken the form of too many bits and bytes.
While a significant portion of this technology spending can certainly be justified by the dramatic transformation of the economy, there is also
evidence of indiscriminate technology buying, as well. For instance, companies have spent much too much on unnecessary computer and
software upgrades. Finally, the economy has created an imbalance in America's economic and financial relationship with the rest of the
world. The current account deficit -- which includes foreigners' profits on investments in the United States and Americans' investments
in other countries as well as trade in goods and services -- may well have exceeded $440 billion in 2000. That is equivalent to 4.4
percent of our gross national product, a gap never before seen in the modern-day history of the United States. As recently as 1991, the U.S.
current account was in balance. This deterioration is an unmistakable by-product of our shortfall in personal savings. Because domestic savings
have plunged, America has turned to overseas lenders to finance investments in buildings and capital equipment. Our dependence on
foreign capital has never been greater. Downturns prompt consumers to become more prudent, encouraging them to turn
away from speculative investing in the stock market and to start saving sensibly, by putting aside a portion of their wages. Recessions also
dampen corporate profits, which disappoint stock market investors, restraining the untamed spending of the wealth effect. The same weak
corporate earnings also force companies to cut unneeded technology purchases. Recessions depress imports, too, a reduction that is the only
means by which America can regain control over its large current-account deficit. Recessions, of course, create a new set of problems: rising
unemployment, an increase in business and personal bankruptcies and a diminished federal budget surplus. Correcting the excesses of
the 1990s will not be cost-free. And the longer the day of reckoning is postponed, the more painful the fix will
ultimately be.
130