Can Manned Spaceflight Save the Economy?

Barry asks: "Driving home last night I was listening to a particularly goofy AM talk station. Just before the syndicated UFO talk show 'Strange Days... Indeed' came on, the discussion turned to the Mars Rovers and George Bush's newfound love of space exploration. The interesting thought was that a large number of American political leaders were about to join Bush in endorsing a new manned space program because it would generate 'millions of jobs'. Given that manufacturing jobs are being shipped offshore, and high tech jobs are following, this almost made sense. A primarily unemployed population could mean big trouble. So I am wondering how many people were employed during the height of NASA's glory days, and what kind of economic impact would we expect if a similar program - a Mars mission for example - were launched today?"

Comments

ummm flawed logic?

[BFedRec]

Is it just me or is that the most crazy financial logic heard in a long time. You're going to have a government agency employing people so they have jobs? Their money coming from tax dollars... which would be coming from the population at large. You're not going to save an economy by employing MORE people from the tax dollars. It just won't work. Basically you're just recycling money, quickly the funding would dry up. Build up the deficit even quicker than it is now.

CharlesP

CharlesP

Re:ummm flawed logic?

[Your_Mom]

Oooh! Oooh! I get to use my macroeconomics course! My professor would be so proud.

There is always a finite amount of money in the system, not everyone has it at one time. NASA give out a $1e9 contract. Company A wins it. Company A subcontracts certain aspects of the contract to companies B and C. Now, companies B + C buy frobs and gizmos from company D, E, and F. Now, what happens here? Companies A-F all prosper as they have people needing their goods and services, and the employees of said companies prosper, as they have jobs. Life is good. *waves little flag*

If you ever have a chance, take a course in macroeconomics, take it, really interesting stuff.

Re:ummm flawed logic?

[Fat Cow]

The money that NASA gives out didn't come from the air, it came out of the pockets of the citizens. If NASA hadn't taken the money, they would have spent/invested it in something else. If you're measuring economic benefits, you have to compare the Mars mission to the alternatives.

I don't think it will be beneficial economically - at root, economic growth comes from using and accessing raw materials in a more efficient way. You actually have to come up with better ways of doing things and making things.

Of course, there may be other benefits of people going to Mars, but they aren't economic.

Re:ummm flawed logic?

[mabhatter654]

I don't think it will be beneficial economically - at root, economic growth comes from using and accessing raw materials in a more efficient way. You actually have to come up with better ways of doing things and making things.

Actually NASA in the 60's and 70's at the height of their spending was great for the economy...Lots of cool stuff was developed that has found it's way into YOUR house. Everything from ink pens, to velcro, to advanced methods of metallurgy [which you don't see, but companies that make your stuff do] Another real push for a space program would do wonders for US technology...as long as it was prevented from being outsourced!

Re:ummm flawed logic?

[AllUsernamesAreGone]

The one reliable thing I learnt from my economics course: to economists the real world is a special case.

Re:ummm flawed logic?

[fingusernames]

Has nobody here read about the proposals? This is Slashdot, but I would expect at least a few people to inject some accurate information.

Bush hasn't proposed raising the NASA budget by 100% or something. He has proposed raising it by about 5%, and REDIRECTING funds internally toward the GOAL of returning to the moon, and later going to Mars. He has proposed replacing the shuttle with an Apollo-like capsule system and an upper stage payload system, like Saturn provided, freeing up the 3.5 BILLION spent per year on the shuttles. That money would be used toward development of NEW technology, rather than maintaining and refitting the 1970 era shuttles.

So, we are talking about 5% growth in the NASA budget, which already is pretty small in the overal federal budget, and moving existing funds around to more productive uses, uses which would promote research and development of new technology.

Sounds QUITE reasonable to me, and it actually gives NASA a MISSION again, as opposed to being some low orbit trucking company.

Larry

rediculous

[pizza_milkshake]

I am not a chronic bush-hater, but this is fucking rediculous. The man's legacy will be stupid quotes and mediocre examples of the 3 easiest popularity boosting projects possible: a tax cut, a war and astronauts. For however many 100s of billion of $ all this will cost in the end, he could have done a whole lot more.

Re:rediculous

[ConceptJunkie]

At best he'll get a footnote.

I disagree. I think Kennedy got the credit he deserved for establishing his challenge to put a man on the Moon in the 1960's. I don't ever recall hearing Nixon being the Moonshot President because he happened to be in office when the event finally occurred.

There is no doubt that there could be a political motivation for doing this, but the potential for applied science and engineering is incredible... far more than anyone who doesn't follow the Space Program closely would ever realize.

However, to suggest that Bush is doing this to score points with the electorate is pretty naive. Hell, I would bet a majority of people believe that silly Fox TV show calling into question that the original Moon landings ever happened.

Remember, a large portion of the population still believes in things like horoscopes, the psychic hotline, and the daVinci code. We are not, as a whole, very good at critical thinking.

Wrong headline!

[toolz]

It should be

Can Manned Spaceflight Save George Bush?

sure, why not?

[ajagci]

Large amounts of government spending can do wonders for the economy, if citizens are willing to make the sacrifices (i. e. pay the taxes). And manned space travel, useless as it is, is at least less destructive to foreign relations and industry than wars, Bush's other favorite economic activity.

However, tax cuts and massive spending don't work. And private industry is unlikely to go into space anytime soon--it's not profitable.

Re:sure, why not?

[sql*kitten]

Large amounts of government spending can do wonders for the economy, if citizens are willing to make the sacrifices (i. e. pay the taxes).

Only if you can make the assumption that an individual in his or her capacity as a government official is a near-perfect economic decision maker, yet that same individual in the capacity of a private citizen is nearly entirely incompetent to make economic decisions. Otherwise, there's no basis for not leaving the money in the hands of the taxpayers and letting them spend it how they please.

Governments are nearly always massively inefficient. After all, they have no incentive to improve. A company that is profligate with its resources will quickly go bankrupt, a government merely has to ratchet the taxes up a little higher. Now you say "if the citizens are willing" but that's very elastic: a citizen prepared to pay say 30% of income in taxes for the "greater good" might well feel very differently if the government decided it wanted 60% or 90%*. But the government is fully incentivized to increase taxes, not to spend the money better.

We see a similar problem in the UK at the moment. There is a lot of fuss over private (fee-paying) versus State (taxpayer-funded) schools - the quality of the former so outstrips the latter that the government is even artificially making university admissions harder for the privately-educated (rather than improving its own schools). But it turns out, if you do the accounting, that State schools actually cost the same or more per student than a private school! The money is just soaked up in government inefficiency. The same is true for the NHS, where the present government has managed to increase the number of medical staff by 15% and the number of managers by 45%.

The way to economic prosperity is to cut both taxes and governemnt spending, so those that earned the money directly control how its spent. This has worked in every economy that has tried it.

And private industry is unlikely to go into space anytime soon--it's not profitable.

I'm sure the same was said of expeditions to explore the world's oceans.

* This is not unheard of - in 1979 in the UK the top rate of income tax was 83%, with an extra 15% charge if the money was from investments rather than salary. That's a total of 98% tax! No wonder that economy collapsed in the "Winter of Discontent" and a new service-based economy emerged!

Only if it feeds back

[Jerf]

This could be a gigantic boon for the economy, in theory. Anybody who's interested in space has read about the resources and the possibilities in space, and if we could tap that such that space exploration could become self-sustaining, there's no practical upper limit to the wealth this could generate.

If the US intends to maintain its lead, rather then "sink" into a parity position with many countries (by staying relatively stagnant while other countries catch up), this is probably the biggest win that is feasible. (Note that everybody really ought to be rooting for this, even non-Americans, because if the US is rising, so is everybody else in absolute terms; without somebody leading the way I'm fearful we could all end up stagnating together. Yes, some other country could take over but the US could take over more quickly; for a real-life tech example of this, note how quickly IBM because the largest Linux company.) It's worth a try.

In this sense, its utility as an economy saver will be directly related to how deliberately it is run with this idea in mind, to be bold, to deliberately ask private companies to produce technologies and benefit from them, etc.

To the extent that this is run like NASA, it may not be a waste but it will not be an "economy saving" gain.

So, it depends on how its run. As is too often the case, if it is run too "selfishly" (too much focus on the short-term gain), it will be useless. But if it is run well, it could be an amazing boon for the entire human race.

I know which one I'd bet on if I had too... but I can still hope...

It's a bad idea

[WolfWithoutAClause]

Keynes studied this kind of 'make work' and generally reckoned it's a distinctly bad idea. Most economists agree.

That aside, socialistic space programs like NASA (sorry, but that's pretty much what a government funded program like NASA amounts to) are unable to grow, and being a monopoly, NASA has very little incentive to become more cost-effective. The historical record shows that the inflation adjusted NASA budget is roughly fixed (within a factor of 2). That's a political reality-no huge growth is likely; business atleast has the chance to grow; and often has a much bigger incentive to reduce costs, which allows growth also; via lower prices.

This analysis suggest that the US government should ramp down NASA, and encourage private industry to take up the slack. It's the only thing that makes any sense in the long run; it's the only way to get to Space in any big way.

Yes, it's the broken window falacy.

[GlenRaphael]

Or as Dave Barry puts it:

"See, when the government spends money, it creates jobs; whereas when the money is left in the hands of taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs."

It's nuts to assume that throwing money at some new boondoggle will help the economy. Yeah, throwing money into space might employ people. Or alternately, you could employ a lot of people in the hole-digging industry if the government simply funded a giant industry to dig holes and fill them up again. Why not do that? See the parent poster's link.

There are jobs, and there are jobs...

[gregwbrooks]

The question isn't whether another Apollo Project-esque endeavor will create jobs -- of course it will.

The question is: Are those the jobs the best way to go about goosing the economy, and is this the way we want to develop them?

Unless President Bush plans to privatize the whole effort, we're talking about jobs paid for with federal contracting funds, and those are some of the most inefficient jobs you can release into the economy.

There's nothing inherently wrong with jobs generated by federal spending -- after all, the government needs to buy stuff just like any company. However (and this is the important part) jobs that grow out of federal spending programs aren't the most efficient way to translate capital into work.. First, the money has to come from somewhere (i.e., taxes). Then, it goes through an inefficient bureaucracy that needs some off the top to perpetuate and grow itself. Then, it goes back into the economy in the form of federal spending, but the spending is often uncompetitive because of pork set-asides or

Bottom line: If you put a few billion dollars into federal spending in the private sector and compared the economic impact with simply leaving the capital in individual and business hands to figure out what their highest and best uses were, you'd see more efficient use of the capital (read: more net benefit) from the latter.

Oh, and although everyone likes the high-tech aspects of the space program, the fact is that there would be many, many old-economy manufacturing jobs created or sustained for every engineer or scientist.

Not fast enough to help Bush re-election

[JGski]

There are two "sustainable" sources of GDP growth: population growth and technology innovation. By that I mean, sources that have any chance of ongoing exponential growth, aka the definition of a "healthy economy".

Government spending can contribute to growth but it's a degenerative feedback loop - government "expenses" like taxes tend to eat up a portion of the economic kick each time money flows back through the goverment since most income is taxed. Thus government spending creates a blip which dissipates - if other growth sources aren't on the edge of recovery, the economy won't catch "fire" and start growing.

A space mission would eventually create technological innovation to fuel growth but it takes time to develop new technologies in the first place, more time for a critical mass of technology portfolios that are cross-purposeable outside of government/military to accumulate, and even more time for those technologies to finally take root. The rule of thumb is 15-25 years from the first scientific discovery/creation to the point when noticeable economic benefit results. Consider the Internet. Consider transistors. Consider integrated circuits. Of course you may not pick the correct newly discovered technology to bet on today.

It's not entirely clear how cost effective a Space Program would be. Sure there have been "homeruns" like semiconductors, computers and integrated circuits which never would of existed with the Cold War and the Space Race, but what's in the pipeline that would apply to a space mission, and then be applicable to a broader. The next "Velcro" won't power a major economic burst. Another internet or transistor might. Unfortunately computers and semiconductors themselves are mostly in evolution mode, rather than revolution mode. The "next big things" like nanotechnology and biotechnology are either just entering their 20-year obligatory incubation period or have industrio-technological structural impediments that will prevent revolutionary advances, and neither would seem to have a major role in a space program anyway.

My net-net is: don't assume a new space program will fix anything economically. If Bush thinks it will, he's, again, deluded. The time-constants are all wrong. If you use economics as a justification for a space program you are perpetrating an improbability. There are other good reasons to have a program. Jobs mean stability even if you don't have net growth. A space program, done right, can inspire a nation which is not a trivial thing. If you allow a economic window of 10-30 years, by then a space program will almost certain contribute to technology - the Net Present Value is still debateable. We certainly don't think that far ahead often enough though.

Short Bus

[Ratbert42]

It's exactly this retarded logic that works so well with most Americans. I actually sat in a United Way campaign meeting last month and listened to how wonderful it is that if I just donate a dollar, often an agency can get matching federal funds, sometimes up to 13:1 matching. I was the only one going "wait a second. Those $13 matching dollars are mine!"

I wish I could run my business by taking 40% of people's incomes, wasting 75% of that, and "giving" the rest back to them in crap they don't really need.

It's not really about creating jobs

[Linux_ho]

It's about developing new technologies. Don't ask how many people NASA and their contractors (and subcontractors, etc. etc) employed. Ask how our society has benefitted from advances in science that come as a direct result of funding NASA and the Jet Propulsion Laboratory. How many jobs today aren't affected by advances in materials science or other technologies that can be traced back to NASA?

Just one problem with the theory, though

[mc6809e]

What jobs are lost because taxpayers have less to spend in the private economy?

What government spending can do is redirect jobs from one part of the economy to another part. Of course, it's hard to know what jobs exactly are lost in other parts of the economy because of this.

What ends up being really important is this: are those jobs being used to produce things that people want? If the money stays in the taxpayers pocket, they are very likely to make their wishes known in the market place and they are very likely to get what they want.

If it is taxed away for a space program, it's less obvious that they'll be getting what they want. I have to admit, though, I love looking at hubble pictures all day. I think the government has given me my monies worth, at least.

The other important thing to ask is whether or not the jobs being moved from one sector of the economy to another are going to improve efficiency. If people are creating as part of their job technology that makes the production of goods and services more efficient, then it might be a win overall because people get more for their money. A lot of military spending has this effect. How much technology was developed that later made production more efficent? Certainly the investment in computer technology has paid off in all sorts of ways.

There are also situations where spending tax money acts a simple transfer of goods and services and this can actually be a real burden on the economy if the recipients don't help improve production or don't recipricate.

Imagine a hamburger-flipper that is taxed at a 15% rate (payroll taxes for example). Now if that money is simply given to another group of people (retirees for example), when this group shows up at the hamburger joint with that tax money, they are in effect collecting free hamburgers and the taxpayer is unknowling giving them away because all the money he sees looks the same.

Now after getting back this money, it will of course be taxed again and some of it will go right back to that group to collect more hamburgers and the cycle will repeat, with 15% of the hamburgers being made for free for some group.

So the question becomes, how much are people willing to put up with this burden before it starts impacting their own production? No hamburger stand ever stayed in business by giving all it's hamburgers away for free.