Time: Wed Jul 16 05:58:53 1997
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Date: Wed, 16 Jul 1997 05:45:16 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Year 2000 computer date crisis

>This Year 2000 Computer Date crisis has about been beat to death.
>However, this is the most exhaustive analysis of the scenario that I've
>seen, and when you pursue the link to the site, it really goes to town.
>Discounting any potential motives for sensationalizing overkill, Gary
>North does raise some points I had trouble dismissing!   HT
>           BLIND MAN'S BLUFF IN THE YEAR 2000
>      What are you going to be doing for as living in the
>year 2001?  Unless you're a fix-it man living in a small
>town, you won't be doing what you do today.  If you make
>your living in financial services, you will surely be doing
>something else.  If you're a journalist, you will be in a
>new profession.  But what?  What other useful service can
>you provide?  You have very little time to make the switch. 
>Let me show you why.
>      We live in a world that depends on a high division of
>labor.  That world has less than three years to go.  In one
>gigantic collapse, the division of labor will implode. 
>This implosion will begin in 1999.  It will accelerate in
>2000 and thereafter.  Those who work in highly specialized
>fields will find little or no demand for their skills, in
>the face of an enormous supply of desperate, low-wage
>competition.  Any job classification that did not exist in
>1945 will probably not have a lot of demand in 2001, with
>one exception: computer software programming.
>      The June 2 issue of Newsweek ran a front-cover story
>on the looming computer crisis of the Year 2000 -- called
>y2k (Year 2 K -- shorthand for a thousand).  In the week it
>the article appeared (late May), the Dow Jones Industrial
>Average set a record new high.  (It was beaten a week
>later.)  If investors believed the information reported in
>the Newsweek article, the world's stock markets would have
>collapsed.  Clearly, people don't believe it.  That's why a
>small handful of people can get out now -- out of the stock
>market, the bond market, and any city over 25,000.  
>      Not everyone can get out at the top of a bull market. 
>This includes the "bull market" known as modern industrial
>society.  Pull the plug on the local power utility for 30
>days, and every city on earth becomes unlivable.  What if
>the plug gets pulled for five years?
>      How do you rebuild the shattered economy if the
>computers go down, taking public utilities with them? 
>Without electricity, you can't run the computers.  Without
>computers, you can't fix computers.  How can you assemble
>teams of programmers to fix the mess?  More to the point,
>how do you pay them if the banks are empty?
>      Chase Manhattan Bank has 250 million lines of code to
>check and then repair.  Citicorp has 400 million lines. 
>All big banks are similarly afflicted.  And even if this
>could be fixed, bank by bank, there is no universal repair
>standard.  Thus, the computers, even if fixed (highly
>doubtful) will not work together after the individual
>repairs.  A noncompliant bank's data will then make every
>compliant bank noncompliant.  Thus, the world banking
>system will crash in 2000.  When the public figures this
>out in 1999, the bank runs will begin.
>      You will not have a job in 2000.  Count on it.
>                   "It Just Can't Be True!"
>      You don't believe me, of course.  Not yet.  But I have
>published the evidence on this Web site.  You can verify
>what I'm saying.  But you still won't believe it.  Why not? 
>Because it's too painful.  In their new book, The Sovereign
>Individual, Davidson and Rees-Mogg make a very important
>      A recent psychological study disguised as a
>      public opinion poll showed that members of
>      individual occupational groups were almost
>      uniformly unwilling to accept any conclusion that
>      implied a loss of income for them, no matter how
>      airtight the logic supporting it.  Given
>      increased specialization, most of the
>      interpretive information about most specialized
>      occupational groups is designed to cater to the
>      interests of the groups themselves.  They have
>      little interest in views that might be impolite,
>      unprofitable, or politically incorrect (p. 339).
>      My views are all three: impolite, unprofitable, and
>politically incorrect.  Impolite, because I am saying this:
>(1) those advising you are as blind as an eighth-century
>Israelite king; (2) they have given you information that
>will prove to be wildly unprofitable; (3) all the hype
>about your getting rich -- the world's getting rich -- is a
>clap-trap.  We are heading for a disaster greater than
>anything the world has experienced since the bubonic plague
>of the mid-14th century.  
>      Because the year 2000 begins on a Saturday, millions
>of victims will not be aware of their dilemma until the
>following Monday or Tuesday.  They will pay no attention to
>advance warnings, such as this one, that they are at risk.
>      As you read this report, I want you to think to
>yourself: "How will this affect me?  Is my business at
>risk?  Is my income at risk?  What should I do?"  
>                 The Origin of the Problem
>      Here is the problem.  Over three decades ago, computer
>programmers who wrote mainframe computer software saved
>disk space -- in those days, very valuable space -- by
>designating year codes as two-digit entries: 67 instead of
>1967, 78 instead of 1978, etc.  Back then, saving this
>seemingly minuscule amount of disk space seemed like an
>economically wise decision.  This may prove to be the most
>expensive forecasting error since Noah's flood.
>      What the programmers ignored for three decades is
>this: in the year 2000, the two digits will be 00.  The
>computer will sit there, looking for a year.  At midnight,
>January 1, 2000, every mainframe computer using unrevised
>software dies.  If old acquaintances are in the computer,
>they will indeed be forgot.
>      Programmers who recognized the implications of this
>change did not care.  They assumed that their software
>would be updated by year 2000.  That assumption now
>threatens every piece of custom software sitting on every
>mainframe computer, unless the owner of the computer has
>had the code rewritten.  In some cases, this involves
>coordinating half a billion million lines of code. 
>(Example: AT&T>)  One error on one line can shut down the
>whole system, the way that America Online was shut down for
>a day in 1996 because of a one-digit error.
>      The handful of reporters who have investigated this
>problem have met a wall of indifference.  "We're all using
>microcomputers now."  "This is a problem only for a few
>companies that are still using mainframes."  "Cheap
>solutions will appear as soon as there is demand."  "The
>software will be updated soon, and I'll buy it then."  "If
>this were a serious problem, we'd have heard about it." 
>Yet this last response is given to someone -- a reporter --
>who is trying to tell people about the problem.
>      I first read about this problem years ago in a book by
>the pseudonymous author, Robert X. Cringely: Accidental
>Empires.  It is not as though the computer industry has
>been unaware of it.  Only a few weeks ago, I read a Wall
>Street Journal column on computers that mentioned it.  The
>writer wrote that his editor is getting tired of having him
>mention it.  This is typical.  The general public hasn't
>heard about it, yet editors are already tired of hearing
>about it.  "It's old news."  Well, it's new news for most
>      What does it matter, really?  We use microcomputers. 
>Microsoft has solved the Year 2000 problem.  So have most
>software companies.  Everyone uses desktop computers or, at
>the largest, minicomputers, right?  Wrong.
>      Governments Rely on Aging Mainframes and Software
>      On September 24, 1996, Congressman Stephen Horn, who
>is Chairman of the Subcommittee on Government Management,
>Information, and Technology, submitted to the full
>committee a report on the Year 2000 problem.  The
>Subcommittee held hearings on April 16.  (Just one day of
>hearings.  This indicates the degree of concern that the
>government has.)  He said that these hearings revealed "a
>serious lack of awareness of the problem on the part of a
>great number of people in business and government.  Even
>more alarming was the cost estimate reported to the
>Subcommittee to remedy the problem, which was said to be
>$30 billion for the Federal Government alone."  Then he
>      Without greater urgency, those agencies risk
>      being unable to provide services or perform
>      functions that they are charged by law with
>      performing.  Senior agency management officials
>      must take aggressive action if these problems are
>      to be avoided.
>      Yet despite Horn's valid warning, nothing visible is
>happening.  He knows this.  These agencies must shift
>hundreds of millions of dollars from their existing budgets
>to hire outside programmers to rewrite the code that runs
>these agencies.  This isn't being done.  More to the point,
>the longer they delay, the worse the problem gets.  You
>can't just go out and hire programmers who are familiar
>with the code.  As businesses find out what threatens them,
>the demand for these highly specialized services will soar. 
>(If businessmen don't figure this out in time, payment will
>come due in January of 2000.)
>      The Subcommittee's report warns: "This issue may cause
>banks, securities firms and insurance companies to
>ascertain whether the companies they finance or insure are
>year 2000 compliant before making investment decisions." 
>It also says that companies will start demanding
>contractual warranties guaranteeing against Year 2000
>      A memorandum from the Library of Congress Research
>Service (CRS) has warned that "it may be too late to
>correct all of the nation's systems."  So, the question
>arises: Which systems will survive and which ones won't? 
>Here are some problem areas, according to CRS:
>            Miscalculation by the Social Security
>            Administration of the ages of citizens,
>            causing payments to be sent to people
>            who are not eligible for benefits while
>            ending or not beginning payments to
>            those who are eligible;
>            Miscalculation by the Internal Revenue
>            Service of the standard deduction on
>            income tax returns for persons over age
>            65, causing incorrect records of
>            revenues and payments due; 
>            Malfunctioning of certain Defense
>            Department weapon systems;
>            Erroneous flight schedules generated by
>            the Federal Aviation Administration's
>            air traffic controllers;
>            State and local computer systems
>            becoming corrupted with false records,
>            causing errors in income and property
>            tax records, payroll, retirement
>            systems, motor vehicle registrations,
>            utilities regulations, and a breakdown
>            of some public transportation systems.
>      I don't think these are small issues.  They will
>probably start receiving media attention when it is so late
>in the process that there will be massive foul-ups in
>coordinating the revisions.
>      Notice, the biggest one is missing: an international
>bank run, as depositors demand cash.  From that day on, all
>exchanges will be local: the collapse of the division of
>      When the computers' clocks think it's 1900, it soon
>will be.
>      I realize that there has been tremendous progress in
>microcomputer power, but does anyone really think that all
>of the Federal government's forms -- not an infinite
>number, but approaching infinity as a limit -- can be put
>on three dozen Compaq desktop computers and run with, say,
>Lotus Approach or Microsoft Access?  And even if they
>could, how would you re-train all of the bureaucrats to use
>the new systems?  How fast will they learn?  How fast do
>bureaucracies adapt?  The Subcommittee's report warns:
>      The clock is ticking and most Federal agencies
>      have not inventoried their major systems in order
>      to detect where the problem lies within and among
>      each Federal department, field office and
>      division.  The date for completion of this
>      project cannot slip.
>      By "cannot," the Subcommittee's report-writer meant
>"must not."  The date can surely be allowed to slip.  It
>almost certainly will be allowed to slip.  
>      Additionally, the task may be more difficult for
>      the public sector, where systems have been in use
>      for decades, may lack software documentation and
>      therefore increase the time it takes from the
>      inventory phase to solution.
>      Did you get that?  The software code's records are
>gone!  Remember also that we're not just talking about the
>United States government.  We're talking about every
>government -- national, state, and local -- anywhere on
>earth that has its data stored on an unrevised mainframe
>computer system or which relies on any third-party computer
>service that uses uncorrected software.
>      As the year 2000 approaches, word will slowly begin to
>spread: "After the three-day weekend that will inaugurate
>the year 2000, there is going to be a hangover the likes of
>which we have never seen before."  For some, it will be a
>time of celebration.  For others, it will be the end of
>their dreams.  It depends on whether they are being
>squeezed by the government or dependent on it.
>      But it's not just government that is at risk.  It's
>private industry.
>                    Kiss Medicare Goodbye
>      Some 38 million people will receive Medicare payments
>in 1997.  In 2000, an estimated one billion claims will be
>filed, totalling over $288 billion.  This, according to a
>May 16, 1997 report of the General Accounting Office (GAO):
>"Medicare Transaction System."
>      Problem: the Medicare system won't make it through
>2000.  The same GAO report shows why.  Medicare claims are
>not actually administered by Medicare.  It's administered
>by 70 private agencies.  These agencies have been informed
>that their contracts will not be renewed in 2000.
>      The agency that officially supervises Medicare has
>plans for one huge computer system that will bring the
>program in-house.  It is the same dream that motivated the
>Internal Revenue Service for the past 11 years.  The IRS
>announced earlier this year that after 11 years and $4
>billion, the attempt had failed.
>      Medicare now knows that it has a problem with its
>computers.  They are not Year 2000-compliant.  So, to make
>sure that they will be compliant, Medicare has issued an
>appeal to the 70 newly canned companies: please fix the
>year 2000 problem for us before you leave.  As the GAO
>report puts it, "contractors may not have a particularly
>high incentive to properly make these conversions. . . ."
>      What if the system fails?  (What if?  Are they
>kidding?  When!)  The report says that the Health Care
>Financing Administration (HCFA), which is responsible for
>running Medicare, has not made contingency plans.  "HCFA
>officials are relying on the contractors to identify and
>complete the necessary work in time to avoid problems.  Yet
>the . . . . contractors not only have not developed
>contingency plans, that have said that they do not intend
>to do so because they believe that this is HCFA's
>                   Kiss the IRS Goodbye
>      The IRS has 100 million lines of code.  Their code is
>not year 2000-compliant.  After the failure of the 11-year
>project to upgrade the system, Chief Information Officer
>Arthur Gross announced that getting the IRS year 2000-
>compliant is the "highest priority for the IRS."  The IRS
>has nearly 50,000 code applications to coordinate and
>correct. This task will require the IRS to move 300 full-
>time computer programmers to the new project.  (Reported in
>"TechWeb," April 21, 1997).
>      For comparison purposes, consider the fact that the
>Social Security Administration began working on its year
>2000 repair in 1991.  Social Security has 30 million lines
>of code.  By June, 1996, the SSA's 400 programmers had
>fixed 6 million lines.
>      What if the IRS isn't technically equipped to pursue
>tax evaders after December 31, 1999?  What if the IRS
>computer system isn't fully integrated with all of its
>branch offices?  What if the system's massive quantities of
>forms are not stored in a computer system that is Year
>2000-compliant?  More to the point, what if 20% of
>America's taxpayers believe that the IRS can't get them if
>they fail to file a return?
>      In 1999, the IRS may find a drop in compliance from
>self-employed people.  If the IRS can't prosecute these
>people after 1999, there will be a defection of compliance
>by the self-employed.  When word spreads to the general
>public, there will be a hue and cry -- maybe at first
>against the evaders, but then against employers who are
>sending in employees' money when self-employed people are
>escaping.  Meanwhile, cash-only, self-employed businesses
>will begin to lure business away from tax-compliant
>businesses by offering big discounts.
>      This will start happening all over the world.  Once it
>begins, it will not easily be reversed.  The tax system
>rests on this faith: (1) the government will pay us what it
>owes us; (2) the government can get us if we stop paying. 
>Both aspects of this faith will be called into question in
>the year 2000 if the governments' computers are not in
>      Big Brother is no more powerful than his software.  On
>January 1, 2000, this strength may fall to zero.  Actually,
>double zero.      
>      If the IRS cannot collect taxes, and if all the other
>mainframe computer-dependent tax collection agencies on
>earth do not fix this, what will happen to the government
>debt markets worldwide?  To interest rates?  To the
>government-guaranteed mortgage market?
>      Kiss them all goodbye.
>                     "No Problem!  Trust me!"
>      There are a few conservative financial newsletter
>writers who have heard about y2k.  They deny its economic
>relevance.  A shut-down of all mainframe computers would
>mean that newsletter writers will be out of business after
>1999 -- a thought too terrifying for them.  So, they brush
>y2k aside with some version of this rebuttal: "Of course,
>the government may not get its computers fixed."  This is
>supposed to calm you.  It should terrify you.  Ask
>            What happens to T-bills and T-bonds if the
>      IRS computer breaks down and a tax revolt spreads
>      because taxpayers know the IRS will never find
>      them, and that if they pay their taxes, they
>      won't get their refunds?
>            What happens to money market funds and bond
>      funds that invest heavily in government debt when
>      investors realize that if the IRS can't collect
>      taxes, the government will default on its debt?
>            What happens to the banks when depositors
>      figure out that the FDIC is bankrupt and that
>      nobody insures their accounts any more?
>            What happens to your job when the banks
>      close because of bank runs, and no business can
>      borrow money or even write a check to its
>      employees?
>            What happens to the delivery of food into
>      cities when money fails because the banks are
>      busted?
>            What happens to the delivery of public
>      utilities when money fails because the banks are
>      busted?
>            What happens to your retirement fund when
>      ERISA, the government pension guarantee program,
>      goes bankrupt?
>            What happens to the 38 million people in the U.S.
>      who are dependent on Medicare?  (Medicare is
>      administered by 70 private firms that have all been
>      told they will be fired in 2000 when Medicare installs
>      its new computer system, but in the meantime, they
>      have been asked to do the year 2000 repair on their
>      own, to deliver a fixed system to the government in
>      1999.  Does this sound crazy?  Of course.  It's the
>      government.  See my Web site for confirmation of this
>      story: a May 16 government report.)
>            What happens to 42 million people on Social
>            Security?
>            What happens to every state government?
>            What happens to crime rates when the state
>      cannot imprison violent criminals and may have to
>      release those who are locked up because they
>      can't be fed?
>            What happens to the world economy when this
>      scenario is multiplied across every government?
>      Kiss you job goodbye.  Especially if you're a
>journalist.  I know.  I am one.  I figure I'll be out of
>work -- forced retirement -- January 1, 2000.  I'm making
>plans to be in small-scale agriculture.  I'm out of debt.  
>      What about you?
>                     Psychological Deferral
>      Those in authority prefer to defer thinking about
>this.  They are playing Scarlett O'Hara: "I'll think about
>it tomorrow," followed by, "Well, fiddle dee-dee." 
>Deferral is a normal response to distant problems.  The
>question is: What can we afford to defer?  People defer
>making this assessment.  The fact that you have not read
>much about this looming problem doesn't mean that it isn't
>a problem.  If your employer has not actively sought
>solutions to this problem, your firm had better not use
>mainframe computers or be dependent on suppliers that rely
>on mainframe computers.  
>      Everyone assumes that someone else is doing something
>to solve these problems.  "It's being taken care of."  The
>problem here is the passive voice.  Who, exactly, is taking
>care of it?  What, exactly, is this person doing?  Is he on
>schedule?  How do you know for sure?  Are you taking his
>word for it?  Anyone who takes the word of a computer
>programmer that he is on schedule is a person of very great
>faith.  If the programmer says "Sorry, I didn't make it" on
>December 31, 1999, you're dead in the water.  Meanwhile, he
>moves on.
>              What You Should Do, Beginning Today
>      First, you investigate whether what I'm saying is
>      Second, think through what happens to you if the local
>power company and the local water and sewage company shut
>down in your city for six months.  "Who ya gonna call?" 
>Especially if your phone is dead?  And if you do get
>through, how ya gonna pay if your local bank is defunct?
>      Third, here is my personal strategy.  I have adopted a
>        "Can I prove on paper that he owes it to me?"
>      I want hard copy print-outs of everything I do with
>the government.  If you are owed money from Social
>Security, and you're dependent on this income, contact the
>Social Security Administration every year and get a letter
>telling you what you're owed.  This is true of every
>government pension system.  
>      Do you have a copy of your birth certificate?  If not,
>write to your place of birth and get it.  Even if that
>community has not computerized the records, do it now. 
>Even if it keeps the records in a desktop, do it.  If word
>starts to spread, they may be buried in requests in 1999. 
>You want your paperwork completed before word gets out.
>      Do you have a copy of your college transcripts?  If
>not, get it.  The same goes for your work record history. 
>Assume that your records are in some company's mainframe
>computer.  Assume also that the company has failed to
>update the software.
>      Do you have a print-out of all of your insurance
>records?  Would they stand up in court?  If not, get what
>you need, now.
>      Have you spoken with your local insurance agent?  Is
>he fully aware of the problem?  Ask him straight out if he
>has scheduled an update of his software if he relies on
>vendor-supplied software.  He deserves to know what is
>coming.  So do you.  (If you want to photocopy this issue
>to send him, go ahead.)
>      Think through this problem in advance, before it gets
>out and creates a banking panic, all over the world.  This
>story will get out eventually.  In 1999, when reporters are
>running around looking for sensational Year 2000-third
>millennium stories, this one will at last surface.  It
>already has: in Newsweek.  At that point, every government
>bureaucrat whose agency is at risk will start playing the
>"No problem" game.  "It's being taken care of."  The
>bureaucrat's number-one rule is to evade responsibility. 
>No one with any authority is going to admit that his
>malfeasance in office is going to create a disaster on Jan.
>1, 2000.  The basic response will be this: "There's no
>problem here, and furthermore, I'm not responsible when
>everything collapses next year!"
>      Keep visiting my Web site for updated information: 
>                    http://www.garynorth.com
>      E-mail this report to anyone you care about.
>--------- End forwarded message ----------

Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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