Economist Brad DeLong has come out swinging against Austrian economics again, and once again he’s punched himself in the face. But he’s too numb to realize it. There’s a great response on the Mises Economics Blog by Jonathan Catalán, and I take a stab on my site, Wirkman Netizen.

It’s interesting that neither Catalán nor I attack, in our respective longer efforts, the worst calumny of DeLong’s, his insinuation that the Austrian distrust of fiat money comes down to anti-Semitism: “[I]n its scarier moments this train of thought slides over to: ‘good German engineers (and workers); bad Jewish financiers.’”

Since Mises was a Jew, and was treated badly for anti-Semitic reasons at times — why does DeLong think Mises left Austria? — and that  Mises never, ever supported anti-Semitism (nor did Hayek, for that matter), this is especially vile. It’s just another example of those leaning left (which means: technocrats who mislabel themselves as “liberals” and “progressives”) playing the racism/anti-semitism card when they lack a good hand.

DeLong should be ashamed of himself. But, then, one of the perks of being in the managerial class of the technocratic state means never having to say you are sorry.

• There is no such thing as a risk-free return
• There is no such thing as a perfect hedge

Federal prosecutors have alleged in their amended complaint against Full Tilt Poker that the gambling interest was a “Ponzi scheme,” apparently in part because of the company’s level of cash reserves.

FTP owed approximately $390 million to players around the world, with $150 million owed to U.S. players. FTP only had $60 million on deposit in its bank accounts, however, meaning over $300 million is owed to players worldwide.

This was the result of FTP’s payment processing channels becoming so disrupted that “the company faced increasing difficulty attempting to collect funds from players in the United States. Rather than disclose this fact, Full Tilt Poker simply credited players’ online gambling accounts with money that had never actually been collected from the players’ bank accounts. Full Tilt Poker allowed players to gamble with — and lose to other players — this phantom money that Full Tilt Poker never actually collected or possessed.”

$390 million in liabilities and only $60 million in the bank? That means that FTP had a little more than 15% in cash reserves. According to Wikipedia,

A depository institution’s reserve requirements vary by the dollar amount of net transaction accounts held at that institution. Effective December 30, 2010, institutions with net transactions accounts:

• Of less than $10.7 million have no minimum reserve requirement;
• Between $10.7 million and $58.8 million must have a liquidity ratio of 3%;
• Exceeding $58.8 million must have a liquidity ratio of 10%

So because FTP had 15% in cash reserves, the whole operation is a Ponzi scheme. If only the proprietors had started a bank of the same size, they would have only needed 10% reserves!

Arnold Kling, at EconLog, relates Scott Sumner’s simple query as to why the 2008 financial crisis has caused such low or negative growth down even unto the present day, and offers four possible answers. I will comment only on one of them:

Because the Fed made forecasting errors. Right-wingers are fond of brandishing charts showing that the unemployment rate with the stimulus is on a worse trajectory than what was forecast without the stimulus. That may or may not be evidence that the stimulus failed, but it is evidence that standard forecasts were not sufficiently pessimistic about the economy. Assuming the Fed used standard forecasts, that would explain the inadequate monetary expansion back then. It doesn’t explain their reluctance to expand now, though.

There are several places where this answer (which Kling does not favor) goes wrong. Most noticeable, to me, regards the possibility that the forecasts “were not sufficiently pessimistic about the economy.” This is not the only possibility. It is not even the most likely possibility.

The problem was that the forecasts were too negative, and the policy response too extreme and witless. Had financial collapse been allowed, and some major banks and other financial institutions — and a whole class of conceited Wall Street players — gone the way of the Brontosaur and the Dodo, the downturn would have been dramatic (housing prices would have collapsed, and a lot of real estate and credit default fortunes would have evaporated), yes, but the rest of us would have recovered pretty quickly. The nature of the boom-period pricing problems would have become apparent, since those who failed would have signaled their failure. Recovery would have started before the lawyers would have finalized the first few bankruptcies.

But that’s not what happened. Instead, we were forced to witness a self-fulfilling prophecy: The too-negative forecasts spurred on hysterical over-reaction, the bailouts. Which, in turn, covered up the semiotic function of markets, and generally disabled markets from clearing.

A more positive forecast — one untainted, say, by having friends in anguish at Goldman Sachs and Bear Stearns et al. — would have yielded saner policy, and better consequences.

This is a problem with the welfare state as it applies to government-businesss relations. You work regulatory expectations up to an unrealistic frenzy, where people think government is somehow “managing” things. This requires experts from the industries to get involved, with their own agendas. And they corrupt any reasonable attitude towards big business. They cannot help but pay favorites, because they — who live and breathe the industry the hail from — have favorites.

And folks in power becomes craven with fear, and foolish regarding policy. We lurch from an impossible-to-scale micromanaging regulatory scheme where businesses often are forced to endure expensive and crazy “oversight” by bureaucrats . . . to “welfare for the rich.” It’s absurd. Current policy could hardly be more idiotic.

Until we can let big businesses (including big financial institutions) fail, America will stagger among several competing policies, with no coherent sense. Consequently, the general signal to market participants will remain incoherent.

And, amidst such regime uncertainty, nothing like a thriving business environment, or “full employment,” will be achieved.

Her Majesty’s Revenue and Customs, stressing “the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid”, has proposed to modernize the UK’s income tax system.  Once employers provide payroll information in real-time, “it further proposes that employers hand over employee salaries to the government first.”

I’m sure that subjects of the Crown have nothing to fear.  The state can be trusted to process their paychecks promptly, correctly, and efficiently.  Only a crank would object to this modernization plan.  After all, everyone fondly remembers the Star Chamber that evolved out of a similar medieval program for keeping tabs on the Jews.  Since it worked out so well last time, how could anyone expect things to go wrong now?

Someone sent me a link to this paper yesterday.

Prof. Harris argues that skilled traders, who consistently profit, do so by taking money from people who trade for extrinsic reasons, to hedge risks, increase their savings, or simply to gamble for entertainment.  He then points out an interesting implication:

If gamblers do indeed contribute to market quality in the long run by subsidizing information acquisition, an intriguing argument can be made about public lotteries.  Lotteries would appear to compete with financial markets for gamblers willing to lose money. Lottery gamblers subsidize the state through their voluntary participation in a negative-sum game. Financial market gamblers subsidize productive information acquisition.  Perhaps prices, and ultimately economic production, would be more efficient if gamblers gambled exclusively in the financial markets.

So there you have it — state lotteries make us worse off by wasting gambling money that would otherwise be productively spent.

Douglas Carswell, M.P.

Austrians and others interested in fractional-reserve banking (FRB) will find of interest a banking reform about to be proposed in the UK. Douglas Carswell, an Austrian economsics-informed member of the UK parliament for Clacton, is planning to introduce a so-called “Ten Minute Rule Bill” after Prime Minister’s Questions tomorrow (Wednesday, Sept. 15) that could have significant implications for current centralized FRB practices. The Bill will be supported by Steve Baker, the Member of Parliament for Wycombe, who also serves on the Advisory Board of the Austrian/classical liberal Cobden Centre.

Carswell described the proposal in a post on Friday entitled “How should we reform the banks?,” and Baker promoted it earlier today in “Douglas Carswell leads the way on bank reform,” on CentreRight, the unofficial web site of the Tory Party (widely read by all members from the PM down). Baker’s article provides further elaboration and explanation, as well as a wealth of useful resources, speeches, links related to this issue. Baker is also scheduled to have a column about this in the Wall Street Journal Europe tomorrow [update: see Steve Baker, "A Bill to Fight Crony Capitalism" [2], Wall Street Journal (Opinion Europe section) (Sept. 15, 2010); and also: Toby Baxendale, “The radical reform that would end boom and bust in banking,” Telegraph.co.uk (Sept. 15, 2010)]. Daniel Hannan, the free market Member of the European Parliament, has also come out in support, in his Telegraph.co.uk column “Instead of subjecting our financial services to Brussels, we should embrace the Baker/Carswell banking reforms.” Finally, Austrian classical liberal entrepreneur Toby Baxendale, who is also Chairman of the Cobden Centre, provides a good explanation of the legal background giving rise to the Bill “What is the Legal Relationship Between the Banker and his Customer?”

The proposal involves clarification of the relationship between banks and their customers. In particular, banks would make it clear to the customer whether his funds would be owned by him, or lent out to other bank customers.

At present, as in the US, most of the money “deposited” with a bank may be lent out by the bank, even though the “deposit” is also available and guaranteed to the depositor. This centralized FRB practice of course results in inflation, the business cycle, moral hazard, and so on. Many Austrians also oppose FRB on the grounds that it has been, or tends to be, or inevitably will be, bound up in some type of fraud. Other Austrians–primarily, but not exclusively, those in favor of a private variant of FRB–maintain that FRB need not be fraudulent, and, indeed, that it can be very useful.

Steve Baker, M.P.

The economic arguments in favor of FRB and its usefulness seem flawed to me, but in my view it is not necessarily fraudulent, so long as full disclosure is made. But is full disclosure actually made? Are customers aware? Proponents of FRB often say that FRB “depositors” “are” aware of what is done with their money since interest is paid on it. In actuality what they are saying is that such customers are “deemed” to have constructive knowledge of the fact that their money is lent out, since they “ought to” know that this is implied by the earning of interest. But this is assuming too much economic sophistication on the part of the typical bank customer and substituting the legal fiction of constructive knowledge for actual disclosure. It is obvious that most banking customers are not aware of the nature of modern centralized FRB, or of the legal status of “their” “deposits.” One reason for this is modern deposit insurance, which reduces the need for “depositors” to consider the question in the first place. Another is the complexity and subterfuge of the current state-regulated and controlled banking system. As for actual evidence, a recent survey conducted in the UK concludes that most people (74%) think they own the money they deposit in a bank. Which, of course, they do not.

Given the confusion inherent in conflating the services of deposit or safekeeping of money, on the one hand, and lending of money, on the other, why not simply make it clear to the bank customer what his options are? Why not give people a choice: do you want to own your money and have it deposited and safeguarded, or do you want to give up ownership of it and permit the bank to lend it on your behalf, in order to earn interest?

Carswell and Baker’s proposed Bill does just that. As Carswell explains:

Under my Bill, when opening a new bank account, you’d still be free to tick the box that says “it’s fine to lend on my money”. … To be clear, this Bill does not stop banks from treating your deposit as a loan. You just have to make clear that you give them permission to do so. There would, in effect, be two types of bank account; one where it was made clear that you owned the money (and probably paid for banking services in fees), and one where the bank was free to lend on your money like they owned it.

In other words, banks would have to make customers aware of whether it will (a) safekeep the funds to be deposited; or (b) loan out these funds on behalf of the customer (who is choosing to be a lender). It would align the law to mirror what people actually think happens: that they deposit money and it is theirs. It also seeks to allow savers to save in a term deposit which the bankers can then with the saver knowingly and indeed willingly lend out this money to borrowers. This relationship will then be that of a depositor lending to the bank and the bank being the creditor to the lender.

The Bill was stimulated by Baxendale, as the result of his setting up the Cobden Centre and talking to Carswell and Baker about this issues, and generally making the mainstream audience more aware of the issue through postings on the Cobden Centre site and other activities. The basic ideas behind Baxendale’s efforts here and the proposed Bill are influenced by the work of the Austrian economist Huerta de Soto, primarily his book Money, Bank Credit and Economic Cycles, which sets out the relevant legal distinctions, drawing on Roman legal principles, and the proposals for reform set out in Chapter 9. Baxendale also approached me for assistance in drafting the initial Bill, based on my Austrian and libertarian background as well as my mixed civil law/common law/Roman law legal background. As Baxendale elaborated in a note to me:

Douglas Carswell came to see me in my North London fish factory in February of this year and talked to me about what he knew or more importantly what he did not know about the Austrian School of Economics. The money and banking things I focused on clearly had an impact and from henceforth we have had a good, productive and interesting dialog. I introduced him to our Cobden Centre website and the articles we put up there focused around banking reform. This culminated with me getting a phone call before the summer saying that he had secured some Parliamentary time in the Autumn to put forward my Banking Bill suggestions. At that point in time I thought he was suggesting the reform I outlined in “Emperor’s New Clothes” article. However, the project Douglas suggested was more focused on just sorting out the property rights of the depositor and the banker in the first instance to be able then to create a more stable environment for wider reform later and giving time for a coalition of support to be built up. As he sits in the public light, only he and his colleagues/supporters can judge the merits of this way forward. I then got in touch with Prof. Guido Hülsmann who I had recently introduced to the think tank community in London for sounding on how to construct the Bill Douglas wanted. He suggested that I contact the American legal scholar Stephan Kinsella. Touching base with Kinsella then led to him drafting a Bill that forms the basis of this Ten Minute Rule Bill.

Interestingly, its supporter in Parliament is one of our founding Directors, Steve Baker the MP for Wycombe. He wrote to Lew Rockwell two years ago now, expressing his interest in the Austrian School and who could he speak to in the UK on these matters. Lew forward him to me saying rather flatteringly “Toby Baxendale is the leading Austrian School advocate in England.” That is praise from a great and inspiring man for sure. Steve coming from a software engineering background took up the project of getting us a web presence with great enthusiasm and vigour. Today what you see on the site is largely down to his initial work; needless to say there are other critical people to our project. Steve has a wonderfully logical mind as you would expect to find in a quality software engineer so his grasp of the logical propositions and necessary key apriori ones is very good. This helps him grasp the core issues very quickly indeed. This is a good time for the Austrian School here in the UK and we will continue boldly forward!

Further background may be found in the links above and in the endnotes.

This proposal, if implemented, could help end the state practice of fractional-reserve central banking which causes inflation and the business cycle. It will be interesting to see what happens tomorrow. As Baxendale notes, “I hope this Bill gets a second reading so that Honest Money can become a major taking point in the banking reform debate.” Indeed.

Update: Toby Baxendale’s Cobden Centre post Support for Douglas Carswell’s forthcoming Bill to reform the banks provides links to various articles and posts in support of the Bill.

And, as noted in First reading of Carswell’s Financial Services Bill, “Douglas Carswell MP yesterday delivered a superb speech in support of his eagerly anticipated Financial Services (Regulation of Deposits and Lending) Bill, introduced as a Ten Minute Rule Motion.”

The video is below. There were no objections; the “second reading” of the Bill is slated for Nov. 19. The full text is available here, and pasted below. Note in particular Carswell’s explicit mention of the Mises Institute:

Since the credit crunch hit us, an endless succession of economists, most of whom did not see it coming, have popped up on our TV screens to explain its causes with great authority. Most have tended to see the lack of credit as the problem, rather than as a symptom. Perhaps we should instead begin to listen to those economists who saw the credit glut that preceded the crash as the problem. The Cobden Centre, the Ludwig von Mises Institute and Huerta de Soto all grasped that the overproduction of bogus candy-floss credit before the crunch gave rise to it. It is time to take seriously their ideas on honest money and sound banking.

***

Financial Services (Regulation of Deposits and Lending)

Bill Presented — Savings Accounts and Health in Pregnancy Grant Bill

House of Commons debates, 15 September 2010, 1:28 pm

Motion for leave to bring in a Bill (Standing Order No. 23 )

1:33 pm

Douglas Carswell (Clacton, Conservative)

I beg to move,

That leave be given to bring in a Bill to prohibit banks and building societies lending on the basis of demand deposits without the permission of the account holder;
and for connected purposes.

Who owns the money in your bank account? That small question has profound implications. According to a survey by Ipsos MORI, more than 70% of people in the UK believe that when they deposit money with the bank, it is theirs-but it is not. Money deposited in a bank account is, as established under case law going back more than 200 years, legally the property of the bank, rather than the account holder. Were any hon. Members to deposit £100 at their bank this afternoon or, rather improbably, if the Independent Parliamentary Standards Authority was to manage to do so on any Member’s behalf, the bank would then be free to lend on approximately £97 of it. Even under the new capital ratio requirements, the bank could lend on more than 90% of what one deposited. Indeed, bank A could then lend on £97 of the initial £100 deposit to another bank-bank B-which could then lend on 97% of the value. The lending would go round and round until, as we saw at the height of the credit boom, for every £1 deposited banks would have piled up more than £40-worth of accumulated credit of one form or another.

Banks enjoy a form of legal privilege extended to no other area of business that I am aware of-it is a form of legal privilege. I am sure that some hon. Members, in full compliance with IPSA rules, may have rented a flat, and they do not need me, or indeed IPSA, to explain that having done so they are, in general, not allowed to sub-let it to someone else. Anyone who tried to do that would find that their landlord would most likely eject them. So why are banks allowed to sub-let people’s money many times over without their consent?

My Bill would give account holders legal ownership of their deposits, unless they indicated otherwise when opening the account. In other words, there would henceforth be two categories of bank account: deposit-taking accounts for investment purposes, and deposit-taking accounts for storage purposes. Banks would remain at liberty to lend on money deposited in the investment accounts, but not on money deposited in the storage accounts. As such, the idea is not a million miles away from the idea of 100% gilt-backed storage accounts proposed by other hon. Members and the Governor of the Bank of England.

My Bill is not just a consumer-protection measure; it also aims to remove a curious legal exemption for banks that has profound implications on the whole economy. Precisely because they are able to treat one’s deposit as an investment in a giant credit pyramid, banks are able to conjure up credit. In most industries, when demand rises businesses produce more in response. The legal privilege extended to banks prevents that basic market mechanism from working, with disastrous consequences.

As I shall explain, if the market mechanism worked as it should, once demand for credit started to increase in an economy, banks would raise the price of credit- interest rates-in order to encourage more savings. More folk would save as a result, as rates rose. That would allow banks to extend credit in proportion to savings. Were banks like any other business, they would find that when demand for what they supply lets rip, they would be constrained in their ability to supply credit by the pricing mechanism. That is, alas, not the case with our system of fractional reserve banking. Able to treat people’s money as their own, banks can carry on lending against it, without necessarily raising the price of credit. The pricing mechanism does not rein in the growth in credit as it should. Unrestrained by the pricing mechanism, we therefore get credit bubbles. To satisfy runaway demand for credit, banks produce great candy-floss piles of the stuff. The sugar rush feels great for a while, but that sugar-rush credit creates an expansion in capacity in the economy that is not backed by real savings. It is not justified in terms of someone else’s deferred consumption, so the credit boom creates unsustainable over-consumption.

Policy makers, not least in this Chamber, regardless of who has been in office, have had to face the unenviable choice between letting the edifice of crony capitalism come crashing down, with calamitous consequences for the rest of us, or printing more real money to shore up this Ponzi scheme-and the people who built it-and in doing so devalue our currency to keep the pyramid afloat.

Since the credit crunch hit us, an endless succession of economists, most of whom did not see it coming, have popped up on our TV screens to explain its causes with great authority. Most have tended to see the lack of credit as the problem, rather than as a symptom. Perhaps we should instead begin to listen to those economists who saw the credit glut that preceded the crash as the problem. The Cobden Centre, the Ludwig von Mises Institute and Huerta de Soto all grasped that the overproduction of bogus candy-floss credit before the crunch gave rise to it. It is time to take seriously their ideas on honest money and sound banking.

The Keynesian-monetarist economists might recoil in horror at the idea, because their orthodoxy holds that without these legal privileges for banks, there would be insufficient credit. They say that the oil that keeps the engine of capitalism working would dry up and the machine would grind to a halt, but that is not so. Under my Bill, credit would still exist but it would be credit backed by savings. In other words, it would be credit that could fuel an expansion in economic capacity that was commensurate with savings or deferred consumption. It would be, to use the cliché of our day, sustainable.

Ministers have spoken of their lofty ambition to rebalance the economy from one based on consumption to one founded on producing things. A good place to begin might be to allow a law that permits storage bank accounts that do not permit banks to mass-produce phoney credit in a way that ultimately favours consumers and debtors over those who create wealth. With honest money, instead of being the nation of indebted consumers that we have become, Britons might become again the producers and savers we once were.

With a choice between the new storage accounts and investment accounts, no longer would private individuals find themselves co-opted as unwilling-and indeed unaware-investors in madcap deals through credit instruments that few even of the banks’ own boards seem to understand.

Question put and agreed to.

Ordered,

That Mr Douglas Carswell and Steve Baker present the Bill.

Mr Douglas Carswell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 19 November and to be printed (Bill 71).

[Cross-posted at Mises Blog]

Apparently 13.2% of you have some of these in your wallet.

Is it possible? Has free-market anarchist and Austrian School Economist Michael Barnett finally discovered a government program which appears to be achieving its stated goals? Yes, my friends, I think I actually may have done just that. Now look, I understand that correlation does not imply causation, but I think there’s a strong case to be made here. I’m talking, of course, about the multitude of state and federal outreach efforts over the last two years to spread awareness of and encourage participation in Food Stamps Programs. Record numbers of Americans are receiving food stamp assistance now, more than ever before. Illinois, Oregon, Florida, and Idaho are just four of many US states which have never had so many people dependent on government to feed them. I wanted to make a play on the words “superpower” and “soup lines” (souperlines? souperpower?) to describe America’s new position in the world, but my joke writers aren’t as good as Jay Leno’s.

The world's only souperpower? See, it just doesn't work.

Specifically, according to the US Department of Agriculture 40.8 million Americans are recipients of “supplemental nutrition assistance.” Subsidies for food purchases jumped 19 percent from a year earlier and increased 0.9 percent from April. Participation has set records for 18 straight months. Well, there’s an economy in recovery! I think a little perspective is in order.

Suppose we created a new country out of every recipient of government food assistance programs in the US and named it The Stiglitzian Commonwealth of Krugmania. This new Commonwealth would be tied with Kenya as the 32nd most populous country. It would have more citizens than (in no order) Argentina, Sudan, Poland, Iraq, Venezuela, and Malaysia, just to name a few. It would have twice or more as many citizens as Chile, Niger, Netherlands, Cameroon, Angola, Cambodia, and Kazakhstan just to name a handful of the more than 160 countries which would fall into this category. But what about America’s Neighbor-to-the North? The United States has 6.5 million more people relying on food stamps than Canada has people period. My first instinct is to call that hilarious, but as that comparison sinks in, it’s rather revolting. This must be the economic recovery I kept hearing about.

Don’t despair, people. Let’s not forget the silver lining I launched this post with: we may just have discovered a government program which achieves its stated goals. That’s something, I guess.

Well, as predicted (by me), in pursuit of one of Connecticut’s US Senate seats, Peter Schiff wasted a lot of time and money, and was forced to refrain from making several television appearances on financial news programs (due to campaign laws). He placed an embarrassing third:

Former professional wrestling maven Linda McMahon capped an improbable entry into politics Friday night when she captured the Republican Party endorsement for the U.S. Senate during a raucous Republican convention at the Connecticut Convention Center.

McMahon edged former U.S. Rep. Rob Simmons after dozens of delegates switched their votes at the conclusion of the first ballot. She received 737 votes to 632 for Simmons and 44 for economist Peter Schiff.

(Heroic libertarian Glen Jacobs aka Kane demonstrates that in the fantasy world libertarians can beat down neoconservatives; too bad that doesn’t hold for the real world.)

It’s amazing that Schiff, someone who sees economic reality so clearly, is so clueless about the political reality: libertarians are a miniscule percentage of the population, maybe 1 in every 10,000. Austrian School economists are even less populous, maybe 50,000 globally, and that’s being charitable. Ron Paul regularly wins his tiny little district in the enormous state of Texas, but he doesn’t win because of his economic and political leanings; he wins despite them: he wins on character (something that’s possible to do in a narrow enough, localized election).

Libertarians and Austrian School economists are hopelessly outnumbered in the political arena. There will never be a libertarian president. Never. Congress will never be packed with enough libertarians to make any significant policy shifts slowing down the growth of the nanny-police state. Ron Paul’s bill to audit the Federal Reserve, for instance, had 320 sponsors out of 435 Representatives in the House. Despite this, it was completely obliterated in the Senate, with a watered down version proposed by an avowed socialist, Bernie Sanders, passing instead. Enjoy this video:

But take heart, libertarians and Austrian School economists, Sanders’ amendment only passed 96-0. Let me tell you politically active libertarians something: you’re not being pragmatic by participating in the political process — campaigning, voting, arguing for some candidate on the internet; you’re demonstrating colossal ignorance. You’re marking yourself as a rube. Honestly, don’t you people understand the concept of opportunity cost? Sad.

With the U.S. displaying characteristically Third World national stats, and average households deep in financial trouble (see below),

(Click to enlarge.)

…one truly wonders if the Obama administration has any sense of proportion at all when proposing a ridiculous 100mm dollar budget cut.  Consider that more than a quarter of the total budget is financed by growing debt (people’s savings, and, by people, I mean Chinese people and other net savings countries like Chile and El Salvador that have been long buying U.S. Treasury bonds and transfering their savings). Click here to see what those 100mm represent with respect to the total budget.