Mr. Bob Scroggins seems to have taken a sinister and "all is doomed" response to my recent letter. He states that most voters are stupid and have a lack of interest towards voting. He states that my word "privilege" is not proper and the appropriate word should be "right," by which the Constitution grants. Hence, I looked up the word privilege in the thesaurus in my computer. The synonym to this word is right. How did we come by this right?

One of the colors in the American flag is red. This color represents the blood that was shed against the British and King George III, to earn our freedom. Hence, we have the "Declaration of Independence" in 1776; we celebrate the Fourth of July to symbolize this historic moment in our American history. The Constitution would not exist without this blood shed.

Bob Scroggins infers most voters are unintelligent. Most I have met throughout my sixty-five years do not vote because they are discouraged. Bob writes that lobbyist seemingly control congressional representatives of our young country, and you the public do not have the power to change this. However, you, the Pennsylvania voter ousted some Democratic persons in the last election, Senator, Arlen Specter and Congressman Christopher Carney.

He is correct to write that Socialism exists in this country. However, Social Security, Medicare, and Medicaid are compassionate programs and not entitlement programs. Sure, they need revising to some degree.

The corporations General Electric (GE) and Radio Corporation of America (RCA) pay my pension. They offered me these benefits - I had a choice to work for these companies. If you do not like your employer, you can leave, prove your worth, and work for someone who will give you good benefits. This is Capitalism.

Let us prove to Mr. Scroggins that through "word of mouth" and not use of money, we the people can make a better republic, capitalistic, America.

Sincerely,
Larry Gary
Gibson, PA

When I first saw our (the taxpayers) black presidential campaign tour bus, all I could think of was Darth Vader. Can you imagine, we paid a million dollars so that President Obama, who has abandoned the White House for the campaign trail - over a year before the election, could motor around telling the world how “The Devil (the Tea Party’ers) make me not do it?” Some leader. No wonder we are in the shape that we are in. And then he has the gall to spin the whole affair as “the president out connecting with the people.” Yeah, right. And then he goes on to campaign against Congress like they are the problem. Well, in some respect, they are. With the election of 2010, at least some members of Congress are refusing to continue down the primrose path to Socialism. Not enough of them, unfortunately, to do more than stop the train (no additional “Affordable Health Care” (the euphemism for socialized medicine), thank you). President Obama has decided to run against the only entity in the United States less popular than he - the Congress. Congressional approval ratings also include most of the progressive Senate and a reasonably large progressive minority in the House. He is avoiding like a hot potato the state of our economy, the persistent high unemployment rate, the sky high deficit spending (the Dems have not presented a budget in over 80 months) and the S&P downgrade of our bond rating from AAA in the first time in history. Just a few of the glaring failures of his Administration to date.

On another subject which he has brought to the forefront is taxing the rich. Warren Buffet is speaking out that the rich are not paying enough taxes. What a hypocrite! A glaring example of do what I say, not what I do. Many of the rich, including Buffet, became that way because of the favorable capital gains tax rate of 15%. The socialists would have you believe that is unfair. However, they conveniently omit the fact that capital gains are the result of risk taking. Risk taking and entrepreneurial activities go hand in hand. With regard to Buffet, if there is any truth in his statement, let him write a check to the Federal Government for five billion of his over fifty billion dollar net worth. Furthermore, note that he has already earned his billions. I say, let the rest of the achievers and risk takers earn theirs. Don’t you ever forget that the achievers and risk takers are the ones who create the jobs that you enjoy. If we had more of them, we’d have more jobs. In 2012, you will once again get to kill the goose that lays the golden eggs. Remember the Luxury Tax enacted in 1990? It was supposed to tax the rich. Well, it did to some but the unintended consequences were layoffs and plenty of them. The net result was that the cost to the Federal government in unemployment benefits and related benefits exceeded the additional revenue. So much for socialistic thinking.

It is time to throw the bums out, starting with the Bum-in-Chief. Time to get back to small federal government, a government which does those tasks assigned to it by the Founders. Time to rid ourselves of career politicians, lobbyists and perhaps a million or so lawyers. There is a lot of work to do. Let’s get started.

Sincerely,
Joe McCann
Elk Lake, PA

The Ponzi scheme; it's the oldest scam in the book. In its crude form, a guy walks into a bar and offers to double anyone's $10 in ten minutes. One patron willing to expose the charlatan gives him $10. To his and everyone else's astonishment, he gets his ten-spot back plus another $10.

Before you know it, everyone was off his barstool waving money at the huckster.

In a sophisticated setting, the scene takes place in a Wall Street office, the grifter wears a custom-made suit and is as respectable as the queen of England. But we're not dealing with sawbucks here but with family fortunes. Bernie Madoff was the upscale version of the barroom scammer. He worked the con for 20 years and netted $18 billion.

Companies work the same scam today. Enron did, dozens of start-ups in the dot-com bubble did, and horizontal fracking companies have drilled investors and deceived lessees for years. Think not? Read on about the frackers and the three stages of a con: buttonholing the mark, baiting the hook, and getting the sucker's money or signature.

The Con: Buttonholing the mark.

“This is the too-good-to-be-true investment that's true. It's a will-o'-the-wisp partnership of high profit and low risk. Natural gas is clean, cheap, and green as in dollars.” The shyster continues, “It's a financial payout that can't miss.”

But it can miss and miss big.

First, a productive well must breakeven; profit must at least equal cost. An iffy proposition.

Hydraulic gas drilling is enormously expensive. For openers, the average well costs $6.5 million. Then the beast must be fed. It has an unquenchable thirst for water. A typical well requires 5 million gallons of water and a convoy of tankers making about 2,000 round trips.

Add to that the cost of transporting frack flowback to distant, specially equipped water treatment plants (assuming it's not dumped on a deserted road). The trucking expenses could push the well cost to $7 million.

As a notable aside, one drilling pad can have as many as a 16 wells and each one can be refracked. The volume of water can be oceanic and the truck traffic unrelenting.

Factor in to all this the daily operating expense of $100,000 and you have an investment that must have a substantial return to turn a profit. Can the Marcellus Shale generate this return? The drillers say, yes.

The breakeven price for natural gas - say the drillers - is $5/1,000 cubit feet. Other drillers cite it at $3 and change. But according to Oil Drum, an independent analysis site, shale operators have consistently and illegally low-balled the breakeven point to lure investors.

A multiyear evaluation of production costs indicates that $7 is an average breakeven cost, according to Oil Drum.

But reaching that illusive breakeven point is a knock-on-wood hope. Economists project between $4 and $5 through 2015. Presently it's a little more than half of breakeven.

But if drilling is a losing proposition, how can the frackers make money? As easy as A, B, C, D.

A) Invest. Not in research, technology, or equipment, but in politicians. Chesapeake Energy gave then Pennsylvania gubernatorial candidate Tom Corbett $450,000. Other gas companies chipped in another $450,000. That was more than the combined sum given by the gas companies to all the other candidates. We now have a pro-gas governor.

B) The frackers tie up as much land as they can in leases. Next they locate a drill site in this area that is likely to be productive. This being accomplished the frackers claim that all the leased land in the drilling site is equally productive.

C) But gas fields are not uniformly productive but spotty; large unproductive areas are dotted with a few “sweet spots.” Nevertheless, their claim of uniform gas field production is taken at face value. This adds a huge, though nonexistent, gas reserve to their holding.

D) Gastem Inc. is a fair example of what happened next. Investors bought into this market mirage. In a month, share price jackknifed from 50 cents a share to $4.40 per share. Then it dropped like a sandbag to 11 cents a share where it's been parked for the past three years. Shareholders took a beating; company execs made a bundle.

And the original producing well? It went into a hyperbolic decline curve along with the royalties.

This concludes Part I. Part II to be continued next week.

Sincerely,
Bob Scroggins
New Milford, PA