President Obama Calls For New 'Space Race' Funding

New submitter dmfinn writes "While his union address covered a wide range of topics, President Obama made sure not to skip over the U.S.'s space program. The talking point was nearly identical to the one he gave in 2009, in which he called for space R&D spending to be increased past the levels seen during the the original cold war space race. Now, 4 years after that speech, it appears things have gone the opposite way. Since 2009 NASA has seen some serious cuts. Not only has the space-shuttle program been deactivated, but the agency was forced to endure harsh funding cuts during the presidents latter term. Despite an ominous history, it now seems that Obama is back on the space objective, pushing congress to increase non-defensive R&D spending to 3% of the U.S. GDP. It's important to keep in mind that not all of this money goes directly to space related programs, though under the proposed budget the National Science Foundation, Department of Energy Office of Science, and the National Institute of Standards and Technology Laboratories will have their budgets doubled. There will also be an increase in tax credits towards companies and organizations working on these R&D projects. Should the U.S. go back to its 'Let's put a man on the moon' ideology, or is the federal government fighting an uphill battle against newly emerging private space expeditions? Either way, the question remains whether or not Obama will act on any of the propositions."

Comments

Which Magic Unicorn Will He Sell to Pay For It?

[Nova Express]

The United States is headed for another trillion dollar deficit. (Even the rosy CBO numbers project an $800 billion deficit.) And beyond that the debt bomb of unfunded entitlements and pension liabilities only threatens to make things worse.

"If you add up the total debt — state, local, the works — every man, woman, and child in this country owes 200 grand (which is rather more than the average Greek does). Every American family owes about three-quarters of a million bucks."

Where is the brokest nation in the history of the world going to borrow the money for more space flight? When hyperinflation kicks in, we won't be able to afford it or much of anything else.

Re:Which Magic Unicorn Will He Sell to Pay For It?

[DragonWriter]

If you add up the total debt — state, local, the works — every man, woman, and child in this country owes 200 grand (which is rather more than the average Greek does).

This is both false, and, even if you reform it to deal with the outright false part, misleading. Its false because governments aren't conventional partnerships, so the government debt isn't individual debt of the current residents. Just as you can't add up the liabilities of a corporation and attribute them as personal liabilities of the stockholders, you can't do the same thing if you swap "government" for "corporation" and "resident" for "stockholder". That aside, measuring per capita external debt is pretty meaningless. Sure, the external debt per capita is higher in the US than in Greece. So is the rate of wealth production available to pay off the debt (e.g., the GDP). Greece's external debt per GDP, the more important measure, is much higher than that in the US.

Re:Which Magic Unicorn Will He Sell to Pay For It?

[DragonWriter]

Except, a corporations sole source of wealth is not its stockholders.

A governments sole source of revenue isn't its residents either (for most governments, the primary source of revenue is taxpayers, but that's rarely the only source, and the entities that pay tax and the individuals that reside in the country aren't the same sets, though they overlap), but even that's not the point. The point is explicitly stated: a government isn't a pass-through entity whose debts are attributable to any other group (whether "citizens", "residents", "taxpayers", or "revenue contributors", none of which are equivalent groups.) A government's debts are the government's debts, full stop.

The ONLY way the federal government can get money is from its citizens.

Wrong. The federal government, even now, collects revenue (tax revenue, even) from non-citizens every day.

They are the ones that will have to pay that debt off, where-as shareholders in a corporation have nothing to do with it's dept or profits.

Well, since they have a legal claim on the assets of the corporation in the event of dissolution, and collectively have the power to force dissolution to collect those assets if they don't like what management is doing and don't feel like replacing the management, they certainly have something to do with its profits (though, in practice, if they don't like what management is doing they'll replace the management.) Since they are generally immune to claims for its debts outside of exceptional circumstances, you are mostly right when it comes to debts.

A corporation can use borrowed money to generate more money.

So can a government.

When the government borrows money, its to cover expenses that they couldn't pay for with tax revenues. There's no way to turn that borrowed money into more money.

Wrong. The government can get money in ways exactly equivalent to some of the ways a corporation can (e.g., by spending money to directly to improve the returns of its own revenue-generating activities, or by purchasing assets and reselling them later for a profit), and in other ways that analogous to ways that a corporation can though strictly different (e.g., any spending that improves the overall economy increases the pool from which the government raises taxes, and can increase revenue in the long-run; this is loosely analogous to corporate ability to invest in various activities that either make it more attractive to consumers or which grow the market for its industry in general, though generally only loosely analogous.)

Not gonna happen

[dkleinsc]

I'd like to see Moon Base Gingrich as much as the next geek, but it's simply not going to happen with this Congress and this President. The reason is that the Republicans in Congress have decided as pretty much a matter of policy that they will vote against anything the President proposes.

Re:Not gonna happen

[AuMatar]

He wasn't trying to spend his way out of debt. He was trying to spend his way out of recession- something that does work if you borrow (or use savings) the money you do it on and the cause of the recession was lack of consumer confidence/demand or lack of capital (which this was in part). The trick is that you have to make up for it in good times by repaying the debt, something we've been bad at. Also, it helps if the extra money being spent is on things with long term results like infrastructure and R&D. Spending it on things like wars will give a short term bump but no long term advantages.

THe fact is right now our debt not only doesn't matter, any business leader in the world would be telling us to take on more of it. We're borrowing at about 1% interest. That means if we have anything to invest in that would pay better than 1% return, we ought to borrow to pay for it. Since the rate of inflation is higher than that, anything with any real long term value is a good buy, as the principal will be less when due than it is now. Debt really isn't a short term problem for us.

Re:Not gonna happen

[DragonWriter]

That's because the President keeps spending money. You can't spend your way out of debt, it's ludicrous

If it was ludicrous to spend more money in the short term to expand the long-term ability to earn revenue for all purposes, including paying down debt, businesses would never issue bonds (and if they tried to issue them, no one would ever buy them; and even if the businesses issued them and gullible fools bought them, both the issuing businesses and the foolish investors would collapse.)

In the real world, businesses use deficit spending to grow their ability to earn revenue all the time.

Re:Not gonna happen

[wiggles]

The National Debt goes up for two main reasons: Social Security and the Trade Deficit.

The Social Security "trust fund" is a bunch of T-bills, and represents the second largest chunk of the National Debt - $2.72 Trillion. Whenever they take in more social security payroll taxes than they pay out in benefits, they put the surplus into T-bills. Those T-bills are then counted as part of the National Debt.

In other words,

1. We owe this chunk of the National Debt to ourselves - to old people and sick people

2. The Social Security Payroll Tax is not really used for Social Security - it just goes right back into the general fund, and even worse, the general fund has to pay interest to Social Security, which means we're even more screwed than you thought.

The other reason the national debt keeps going up is due to the trade deficit.

We buy Chinese goods in Dollars. We pay them in Dollars. They can't use dollars in their domestic economy for anything - worthless paper to them. They'd have to plow the dollars into American goods to make use of them, but they don't do that. They don't buy enough of our stuff, so instead of stuffing that cash in a vault somewhere, they buy a bunch of T-bills so they can collect interest. That accounts for the largest chunk of the national debt, over 5 Trillion.

Important to note that, no matter what happens with spending, the national debt will continue to grow because of these two things. Blaming the national debt on spending alone is not accurate.

More reading and sources for my numbers are here.

Re:Not gonna happen

[SydShamino]

You can't spend your way out of debt, it's ludicrous

Isn't this what every start-up company that accepts venture capital is trying to do?

This article isn't talking about spending on food stamps or fallacious broken windows. It's talking about spending on fundamental research - the kind chase-the-quarter capitalism doesn't do very well - so as to yield a return in new industries to create employment years and decades from now. This isn't that much different than what start-ups are trying to do, except the government can think on a much longer scale - something that I'm glad a government can take time to do.

Re:Not gonna happen

[AuMatar]

So as an insult you call me a nobel prize winner? I wish everyone disagreed with me like that.

The fact is we have plenty of takers for our debt at ridiculously low rates. That means it isn't a short term problem. It may become one in the future, but for now we're perfectly fine.

Re:Mr. President

[Lendrick]

And raise taxes on millionaires and billionaires.

Re:Mr. President

[Lendrick]

That sounded suspect, so I thought I'd take a quick look at some real numbers, which probably aren't of interest to you, but should be seen by other people so they don't take your statement at face value.

• The combined income of everyone in America is roughly 13 trillion dollars (http://bber.unm.edu/econ/us-tpi.htm)
• This year's projected deficit is about $850 billion (http://www.miamiherald.com/2013/02/12/3230392/growth-in-us-budget-deficit-slows.html)
• The top 10% of earners account for about 22% of the total income (http://www.nytimes.com/interactive/2011/10/30/nyregion/where-the-one-percent-fit-in-the-hierarchy-of-income.html), or just under 3 trillion dollars per year.

A 100% tax on their income would close the deficit twice over, even if no spending cuts were made, and that's assuming that they're already paying the maximum marginal tax rate of 39 percent (hint: many extremely wealthy people are making money from capital gains, and are taxed at 15% on that income).

Your statement is demonstrably false.

When Obama was elected, I had hope

[Nyder]

but then it changed.

How about we stop the stupid war in the middle east, spend that money on some good old space programs? How about we stop bullying other nations and instead work with them with a common goal, like space travel/colonies?

Won't Ever Happen

[organgtool]

I've been saying this for a while. The last space race we had allowed 440,000 engineers to make advances in almost every sector of industry. From materials that could withstand the cold of space and the heat of re-entry to the computer and hardware that controlled the spacecraft, that decade was one of the most productive periods of technical advancement in human history. And we don't stand a chance of doing it again, not because there's a shortage of big technological problems, but because of the fact that there is a large segment of the population that believes that the government should not be involved in such technological advancements - the private sector should do it alone. And here we stand, at the sunset of the American empire, and many Americans are too ideological to see the value in having the government work in cooperation with the private sector to make another technological push that will propel us further out into the lead. We've already reduced government's role in technology quite a bit and yet we seem to be losing ground to the Chinese who are using a combination of the public and private sector to push forward. I know many people are rightly concerned about our national debt, but you have to spend money to make money. We just have to be a LOT better at taking the money we make and actually paying off our debt for once.

Re:How are we going to pay for it though?

[Teancum]

Social Security could get to something like actual bank accounts where you save money over your employment lifetime.

The problem with Social Security is that it has been spent as quickly as it came in, and the whole notion of a trust fund is a complete lie. In fact, the trust fund ceased to be an actual reserve when Thomas "Tip" O'Neil was Speaker of the House (during Ronald Reagan's administration) due to some budget changes on how the trust fund was actually administered or misappropriated as it were. Changing it back would expose just how horribly broke the whole system has become.

It should also be pointed out that it was over the past couple of years that more money has been leaving the supposed trust fund than has been collected through payroll taxes. It is already unsustainable and will be more directly impacting the budget in a negative manner soon enough. That is presuming Congress will actually pass a federal budget any time in the next four to sixteen years.