Balancing the budget

Balancing the budget, or at least lowering the growth of the current deficit, may be a way to signal a change in our national priorities. Doing so would not only appeal to fiscal conservatives but also work as an example to everyone in the country that the days of financing through debt are over. Sending such a strong signal would ensure larger support for some of the programs that are truly needed in terms of restoring the country’s infrastructure and ensuring that every American has access to education and healthcare resources.

The first item would probably be a repeal of the tax cuts enacted in 2001 and 2003. Such financial leger de main didn’t make sense then and it still doesn’t. Repealing those cuts would put anywhere from US$200 to US$300 billions back into the government coffers, which goes some way towards solving the budget deficit gap.

An order asking for a two percent across the board cut for all 2009 discretionary spendings would add about $240 billion in funds, helping handle the rest of the deficit (except for TARP)  and allowing the country to get closer to a balanced budget. The total budget would still represent an increase from the 2008 budget, just not as large a one. Making the cuts mandatory across the board would ensure that the pain is evenly spread and not based on any ideological directives.

Retiring the debt?

Another big question that could be considered would be around what to do with our national debt. Before TARP, interest on the national debt for 2009 were considered to be around US$260 billion. To put this in context, it’s more than what we spend on Medicaid yearly (US$215 billion); or 63 percent of what we spend on Medicare (US$409 billion); or 40 percent of what we spend on social security (US$644 billion); or a bit over 8 percent of the national budget… and that’s just the interest.

Not only that but today, for every US$100 the US government currently spends, it borrows US$14. That’s pretty scary because that money doesn’t come for free and that means that our interest payments will continue to increase over time.

So one could ask whether retiring some of that debt through accelerated payment might be a way to help create a surplus in the future. Since the debt will be crushing on future generations, why not take the hit now and find ways to use some of today’s entitlements as ways to offset those extra payment. For example, if we were to pull out of Iraq, we probably would end up with US$50 to US$100 billion in spendings that are no longer necessary. Assuming we had balanced the budget by other means, could we look at investing that money into retiring our national debt. The premise is the same as that of repaying a little more on your mortgage every month: if you did that, you might shaves years of interest on the back end. In the case of the country, that could means trillions of dollars that could be reinvesting in the country.

Encouraging Investment

Our current infrastructure is crumbling. Whether it is roads, bridges, railroads, or the electric grid, we are dealing wht a 20th century architecture that is not suited for our 21st century needs. For example, one of the biggest holdups in getting cleaner energy in the country is that the electric grid is not built in a fashion that would allow routing energy from low population areas to heavily populated one. Rebuilding the grid to solve that problem would cost about US$60 billion over several years. But here’s an interesting tidbit: that rebuilding could be done by the private enterprises that currently run the grid. The challenge would be in getting different states to agree to play together on setting common rules for building it out, coupled with some possible tax cuts to offset the initial investment costs. Something similar to the tax abatment on internet retail could be put in place around energy to stimulate, for somewhere around 4–5 years, the investment into new infrastructures through some form of private-public partnership.

Also in the public private partnership side would be the creation of a national service program allowing students to go to college for free in exchange for doing national service. The program would take the form of up to 4 years of college tuition paid for in exchange for up to 6 years of working for the country (The program would be sliced in one year increments, with tuition for one year being paid in exchange for 18 months of service). That service could take the shape of work as a government employee either at the state or federal level. Initially, the program would only be available for education through public universities. Private universities who are match the difference between the cost of a public offering and their own cost would later be added to the program, which might help curtail the rise in the cost of education. Service would be compulsory for anyone who has taken a government grant but there would be an opt-out clause that would allow someone to repay the loan in full, with interest, in their first year out of college, allowing them to join the private sector after that.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Federal Budget 2010. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

As broadband access to the net becomes more prevalent, those applications will increasingly shift to a net-only model. We’re already seeing this switch with applications like webmail or search, which are purely web-based. Similarly, applications like desktop search now integrate with an online component (for example, Google Desktop Search allows you to store documents on their server or services like Plaxo allow you to store data in an online repository and resync it with different devices) and move data back and forth.

As broadband access continues to increase, the important part is not just the speed (although it is an important factor since it allows for richer online experiences) but I would venture that the more critical part of broadband access is the always-on point. Because a broadband connection does not require to dial-in, it is increasingly becoming ubiquitous. Much as people do not think about the systems of filtration and delivery that provide water to their house or the systems of power generation and distribution that allow them to use electricity, the prevalence of broadband will decrease discussions of what is on the net and what is off it. Applications will just be there and a cloud of connectivity will exist around all of us.

To this end, two potential scenarios could play out: the first one would see the communication providers (telephone companies, cable companies, etc…) continue to provide different access points around the globe. However, another potential scenario could develop around the area of a mesh network that would tie all users together in a peer-to-peer network that would be managed by every single user. One could envision each computing device connected to the cloud to allow for some traffic to go through. Because the protocols that dictate internet based communications have been designed to distribute communications across a number of points (what is called, in more technical terms, packetized communication), one could envision a scenario where an increasing amount of communication would happen in areas independent of the systems provided by the communication providers.

The rise of always on, always fast communication can already be seen in some countries like South Korea, where such thing is considered so commonplace that few people bother discussing it. The United States, unfortunately, are starting to fall behind on this and, because large telecommunication providers are trying to protect their monopoly on access to the high speed lines, efforts to increase speed and coverage could be impeded. However, in the long run, something like a mesh network could make an end-run around the telecom companies, which would then put such decisions in the hands of users.

This is the second article in a 6 part series. You can read the following parts here:

• Part 1: Intro
• Part 2: Always on
• Part 3: IPzation
• Part 4: Sensors
• Part 5: Participatory Applications
• Part 6: Conclusion

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Future Tense — Always On. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Thanks to the great work of the Dorsai team, this server, as well as my email system, is now back up. You can email me and I’ll get back to you as soon as possible which, right now, looks like it may be over the next few days.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Power Outage. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Beyond giving money, blood and supplies, I’ve been talking to people about what to do to avoid a repeat of those events. While I usually cover technology in this newsletter, I believe that the following is important because it does require technology but also goes beyond that. Here are my thoughts on how we might be able to eradicate terrorism in the long run.

Why did it happen?

Like many, I’ve been left to wonder why terrorism happens. Is it because of our lifestyle? Is it because they consider us “corrupt”? Is it because we are different? Or is international terrorism inherent to globalization?

As it stands, I’ve concluded that the best way to fight terrorism is to force people to question the motives of madmen like Osama Bin Laden. How do you do this? By giving people support. By helping raise them out of poverty. By showing them that we are not barbarians. By showing them that our system can work for them. By showing them that we are tolerant and that our cherished freedoms are something we are willing to share.

A war on poverty

As a result, I am presenting a plan to eradicate terrorism by waging war on global poverty. It is not an easy fight. It is not one that is possible to win overnight. It is not a fight that will result in a better way of life for us. But it is a fight that will lower the chance of another terrorist attack. After all, it is easier to reason with a person who has something to lose than it is to do with a madman.

Compulsory Social Duty

The first step in fighting the war against poverty would be through the establishment of a social duty corp. Similar in nature to the American Peace Corps, this group would be built out of engineers, educators, doctors, lawyers, financiers, construction workers, etc, all jobs that are essential to the building of a capitalist society and of democracies.

This duty would be for a period of two years, preferably right after college. People dropping out of high school would have to join this service immediately. The only dispensation that would exist for this program would be to join the military.

The goal of this army would be to build an economy within underdeveloped countries and transfer that knowledge to local people. The idea here is to start working as a force for change, helping develop an internal economic system and work on the establishment of democracies around the world.

This army of good will would be a global force, and would get in a country at the invitation of the existing people or after agreement of the majority of U.N. members. The work period of those people would be divided into two parts: the first one would be one of education, before getting straight to work. Through that education work, one would be taught some rudiments related to customs, language, and general culture within the country.

During the initial month of a new member’s initiation, that training would represent a 7 days work-week. During the next two months, everyone would work on the front lines to help with feeding the hungry, and polish off some of the lessons learned in class with some real street training.

After that initial quarter, the trainee would be pointed to a work area, based on their skills. Lawyers would work with the local authorities on establishing legal frameworks for the country. Financiers would work on establishing and regulating financial transactions for new local businesses. Teachers would teach schools and recruit from the other groups to establish curriculae in business, political science, law, medicine, etc… Doctors would run hospitals. Electricians, building workers, etc… would work on establishing an infrastructure to allow all this to happen.

Each member would be shadowed by a local person and work on transferring their skills to that person. It would work, in a way, as a sponsor model. During that period, workers would also be hosted in the equivalent of dorms, where half the people would be natives and half would be coming from the outside.

One could decide to continue beyond their tour of duty and in exchange, would receive benefits similar to those in the military.

This force would be supported by the military to ensure their security.

The technology

Of course, this effort should take advantage of advances in technology. Since September 11th, some groups have organized great web sites to manage volunteers in the New York area. A similar effort could be put in place for the effort I’m describing. Using best of breed Internet and intranet technology, we could develop some tools to help manage this effort and reduce redundancies. However, technological efforts in underdeveloped countries are not something that is as easy to do as it is in developed ones.

For starters, there is no infrastructure to speak of: a lot of places have no electricity, no running water, no roads, and no phones. In order to use technology in those efforts, new infrastructure would have to be built. In the initial phase of the effort, these infrastructure would not exist.

As a result, the development of irrigation systems, electrical supplies, and telecommunication supplies would have to be high on the list (but still below some even more basic needs like food and vaccination.)

In a way, the underdeveloped countries that would be the focus of this effort could become the launching pad for a number of new infrastructure, primarily wireless ones to overcome some of the heavier costs of installing a lot of copper or fiber optic cables in areas where such solutions could not survive harsh weather (tropical and desert countries) or where other forces of nature are at hand (mountains, heavy forests).

In terms of electrical supplies, we could look at clean technologies like solar power or wind power, which could help generate electricity in remote areas without having to develop national grids. In terms of telephony, wireless solutions could also help overcome obstacles. Water supplies, however, would probably have to be taken care of using the old fashioned way (big pipes) and we might want to look at the convenience of digging up multiuse canals that would allow to not only distribute water but also pass on information through fiber-optics channels.

The one percent solution

The war on poverty is one that will take money and manpower. In order to raise money, I suggest the possibility of raising a tax of up to one percent on the top median of net worth in developed countries. As a result, a large amount of money would be raised in the developed world to create a global fund to eradicate poverty.

That money would not be sent directly to the country as hard currency but would be dealt out as supplies and as a way to pay for the effort. Only a small part of the money should go to paying for general administration of this program.

Other forms of payment

Currently, in parts of the western world, entires crops are destroyed to sustain global prices on food goods. Instead of destroying those goods, they should be shipped away as part of this global effort to end poverty.

Companies would also be able to distribute inventory of technology needed for this effort in exchange for some tax advantage. Using web technology, a list of needed supplies would be available over the web at all time and be updated in real-time. A new donation would be routed using such system and once the donation has reached its destination, it would disappear from the database.

Using a system similar to the ones used by FedEx and UPS, companies would be able to track their shipment all the way to its destination (all shipping costs would have to be incurred by the company and it would be fully tax deductible). They would also have access to a company account, which would list the goods they had sent, their value, the price of shipping, and other goods they could provide along the same line (for example, if a company sends out a million miles of fiber optic cables and there’s a need for a million more, a request would pop up on their personalized screen.)

Using such a system, companies could decide what they need to donate, when they need to donate it, and see how much benefit they will get out of their donation.

What makes a developed country?

When I talk about developed country, I am talking about countries which have an economy that is sufficient to supply its residents with jobs, food, and shelter. It is an economy that either is rich enough for everyone to get an opportunity, or one that is rich enough to maintain a strong social net.

Eventually, the success of these operations will be measured by how many new developed countries are created.

Why do this?

It seems ridiculous to ask for an effort like this. After all, why should we care? Well, for starters, let’s look at the Manhattan skyline. See anything missing? My point is simple, if we work to help people around the world develop systems that allow them to rebuild their country, restore their dignity, and allow them to become self-sufficient, they will not look to destroy us. For historical precedents, take a look at the Marshall Plan after World War II and see how Germany and Japan are now strong democratic and capitalistic society with no intent to bomb the U.S. They are now players because we all worked together to rebuild them. Let’s do the same for the rest of the world.

The other advantage is that it will foster more understanding among nations. Once you’ve traveled to a foreign country and have been exposed to its culture, you become a more open person. It’s that simple: reaching out to other people is opening your eyes to a new world of possibilities.

What next?

I am forwarding this concept to a number of politicians in the hope that one of them will consider it a possibility and may look into fleshing it out more.

I do realize there are a number of holes to be filled up and I hope you will join the conversation and help me fill them up. Together, we can all make a difference, and maybe, just maybe, the events of September 11th will be seen as the starting point of a new world, one where the world went through hell and came out stronger. It is my hope that together, we will do that.

As a side note, I started thinking about this and discussing it with a number of people after the attack and before we started to bomb Afghanistan. I don’t know if the war will change the dynamics (the original name for this newsletter was a Marshall plan without the war) but I dare hope that we will all come out of this OK.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Rebuilding. You can follow him on twitter here or receive his weekly newsletter by subscribing here.