May 15 2024

New Silk Roads

Greg Loving

May 15, 2024

1 Interest payments on federal debt exceed defense, Medicare

2 ELECTION 2024 Democrats face uphill climb to hold Senate

3 Regulators release sweeping new electrical grid rule

4 Chinese shipbuilding dwarfs US, allies

5 BATTLE FOR EURASIA Indians to help create non-Western trade corridor

5/15/1841 First wagon train to make it to California leaves Independence, Missouri on a 1,730 mile journey over the Sierra Nevada

see ad astra on x @greg_loving

1 Interest payments on federal debt exceed defense, Medicare

In the first seven months of Fiscal Year (FY) 2024, spending on net interest has reached $514 billion, surpassing spending on both national defense ($498 billion) and Medicare ($465 billion). Overall spending has totaled $3.9 trillion thus far. Spending on interest is also more than all the money spent this year on veterans, education, and transportation combined. Interest on the debt is currently the fastest growing part of the budget, nearly doubling from $345 billion (1.6 percent of GDP) in FY 2020 to $659 billion (2.4 percent of GDP) in 2023, and net interest is on track to reach $870 billion (3.1 percent of GDP) by the end of FY 2024. Spending on interest is now the second largest line item in the budget and is expected to remain so for the rest of the fiscal year. By 2051, interest will be the largest line item in the budget. Rising debt will continue to put upward pressure on interest rates. Without reforms to reduce the debt and interest, interest costs will keep rising, crowd out spending on other priorities, and burden future generations.

Committee for a Responsible Federal Budget

Ed note: Ad Astra has a plan to fix this

https://adastraperaspera.substack.com/p/the-next-american-system

2 ELECTION 2024 Democrats face uphill climb to hold Senate

The slim Democratic advantages in Arizona, Nevada, Pennsylvania and Wisconsin still only give the party an outside chance of holding Senate control. With the retirement of Senator Joe Manchin III, a Democrat in deep-red West Virginia, Democrats would have to win every competitive Senate seat along with the White House to give Vice President Kamala Harris the tiebreaking vote next year. Even with a Democratic sweep of every other competitive Senate contest, a Trump victory and the loss of Mr. Manchin’s seat would give Republicans control of the chamber.

Two other consequential Senate races are not in the presidential battleground states polled. Both Senators Jon Tester of Montana and Sherrod Brown of Ohio must win re-election this November in their heavily Republican-leaning states to give Democrats a chance to hold their majority.

NYT

3 Regulators release sweeping new electrical grid rule

Federal regulators on Monday approved sweeping changes to how America’s electric grids are planned and funded, in a move that supporters hope could spur thousands of miles of new high-voltage power lines and make it easier to add more wind and solar energy.

The nation’s three main electric grids are overseen by a patchwork of utilities and regional grid operators that mainly focus on ensuring the reliability of electricity to homes and businesses. When it comes to building new transmission lines, grid operators tend to be reactive, responding after a wind-farm developer asks to connect to the existing network or once a reliability problem is spotted. The new federal rule, which was two years in the making, requires grid operators around the country to identify needs 20 years into the future, taking into account factors like changes in the energy mix, the growing number of states that require wind and solar power and the risks of extreme weather.

The commission approved the rule by a 2-1 vote, with the two Democratic commissioners in favor and the lone Republican, Mark Christie, opposed. Mr. Christie said the rule would allow states that want more renewable energy to unfairly pass on the costs of the necessary grid upgrades to their neighbors. “This rule utterly fails to protect consumers,” said Mr. Christie. He said it “was intended to facilitate a massive transfer of wealth from consumers to for-profit, special interests, particularly wind and solar developers.”

Mr. Christie said the final rule didn’t give states enough power to object to how the costs would be shared. But Allison Clements, the other Democrat on the commission, said that giving each state a veto was “a recipe for inaction.”

Environmental groups and renewable energy companies praised the new rules.

It remains to be seen how effective the new rule will be, since that will depend on how grid operators implement it. A 2011 attempt by the commission to encourage transmission planning largely faltered, in part because many utilities were opposed to new long-distance lines that might undercut their monopolies, said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. Because of the decentralized nature of the nation’s grids, there is only so much that federal regulators can do to force operators to comply.

NYT

4 Chinese shipbuilding dwarfs US, allies

China’s shipbuilding empire is the latest flashpoint in the intensifying frictions between Washington and Beijing.

Foreign capital and technology are flowing into Chinese dual-use shipyards, which is accelerating Beijing’s ongoing naval buildup.

Beijing plowed hundreds of billions of dollars into its shipping and shipbuilding ecosystem through the 2000s. These state-driven efforts helped China undercut competition and glean market share from erstwhile global leaders. Chinese shipbuilders now collectively account for over 50 percent of all merchant tonnage produced globally each year, an eye-watering rise from just 5 percent in 1999. Yet it was not U.S. companies being displaced by the rise of China’s shipbuilding industry. Even when the U.S. shipbuilding industry was more vibrant in the 1970s, U.S. shipyards produced just 15 to 25 new merchant ships per year—typically accounting for less than 5 percent of global tonnage. After subsidies supporting the industry were eliminated in the 1980s, this number dropped to a fraction of 1 percent of global production. Japanese and Korean shipbuilders have suffered the most from China’s ascent. Over the past decade, the two powerhouses have seen their combined share of the global shipbuilding market tumble from 55 percent to about 40 percent today. This trend will likely continue. Last year, China attracted 59 percent of new shipbuilding orders. Most large ocean-faring vessels put to sea in the coming decade will be built in China. As concerning as this is for the industrial competitiveness of the United States and its allies, China’s shipbuilding prowess is also a matter of national security. Chinese shipbuilders produce far more than just container ships, bulk carriers, and tankers. They also build warships for the People’s Liberation Army Navy (PLAN).

It is here that China is nearing completion of its third and most capable aircraft carrier, the Type 003 or Fujian. The assembly facilities and fabrication halls that build components of the carrier are frequently used to produce commercial hulls. Even the dry dock where the Fujian was assembled had to first be cleared to make room for the flagship project—it was previously occupied by a massive container ship for a foreign client.

Center for Strategic and International Studies

5 BATTLE FOR EURASIA Indians to help create non-Western trade corridor

India and Iran on Monday signed a 10-year contract for the operation and development of the Shahid Beheshti Port in the country's southern coastal city of Chabahar.

The United States State Department said on Tuesday that Indian companies risked their sanctions over any investments in Iran after New Delhi signed a 10-year contract to operate and develop the long-stalled strategic Chabahar port.

The goal, a non-Western trade route through Eurasia: