NASA requested $1.4B in increase
for comparison, Military budget increased from $586B in 2015 to $713B in 2019
for comparison, Military budget increased from $586B in 2015 to $713B in 2019
Not that I dispute what you say, but I don't buy it hook-line-and-sinker.
https://www.thebalance.com/markets-for-us-and-world-sugar-80...
1-https://www.brookings.edu/blog/up-front/2017/08/18/the-hutch...
"On December 19, 2014, the U.S. Treasury sold its remaining holdings of Ally Financial, essentially ending the program. TARP recovered funds totalling $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6% and perhaps a loss when adjusted for inflation"
[0]: https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
This assumes zero value of having the Treasury backstop a business. There is always a cost associated with making an investment (which TARP was). In a sense, the entire discipline of pricing risk is based on calculating this cost.
Whether or not the chosen risk eventually paid off is a different question than the whether the risk had a cost to begin with.
* - I was a proponent of TARP as one of the better risks on the table.
Investment into NASA or infrastructure or education also has a return on investment, but anytime TARP is mentioned in comparison someone will bring up its ROI.
I know the answer is that the ROI for TARP is so much easier to quantify, but I still want to make the distinction that it's not unique for a government program.
Seriously. The ROI of solving the homeless and mental health crisis to the point where most of them can get back to work and become tax paying citizens is probably pretty good too.
Yes, I meet very many people who take a variety of anti-psychotic meds.
> They go through the rest of their life barely able to grasp new concepts with a drug specifically designed to mute that part of their brain,
This describes a few of them, but not most of them.
And it doesn't change the fact that TARP didn't cost any real money.
If national defense is such a great deal, why does the government have to fund it?
If FDIC insurance is such a great deal, why does the government have to fund it?
Why does the government have to do anything? Why don't private investors jump in and do everything?
The answer is: because there are certain things that are only a great deal if they are done by everyone all at once. Left to individual players, sometimes the incentives align like running from a bear--I don't have to outrun the bear, I just have to outrun one other person.
This is why we have government at all. Humanity was not handed a government, we invented it to solve problems that could not solved by piecemeal individual action.
And for TARP, a reminder that it came after Lehman failed and money markets broke the buck. The first House vote on TARP failed. It was adopted at the last minute, only as it became clear that it was necessary.
TARP was not a benign thing but instead we should make sure this never happens again.
If the entire highway system increases GDP at least $250 billion (1.25% of GDP) then highways are profitable.
Essentially, it amounts to socialism for huge corporations, but not for little humans. "Too big to fail" for them - "too poor to survive" for us.
First, you're ignoring the basic difference between expenditure and investment. When the government spends a dollar on healthcare, that may be an "investment" in an abstract sense, but the government is not directly getting that money back. In budgetary terms, it's expenditure.
That is not true for the financial bailouts. There, the government didn't just spend money, it got assets in return. With respect to TARP, the government got most of that $400 billion back. It made a nominal profit, and adjusted for inflation maybe you can book it as a $24 billion loss: https://www.nationalreview.com/2015/01/overselling-tarp-myth....
With respect to quantitative easing, what you're referring to is the Fed's SOMA operations. The Fed bought $3.5 trillion in assets (securities and treasuries--i.e. the right to be repaid money in the future). It is getting that money back as those assets mature. Right now, the Fed has about a $67 billion unrealized loss on those assets: https://seekingalpha.com/article/4225750-deterioration-fed-b.... That means the fair market value of the assets is $67 billion less than the Fed's purchase price.
So the actual cost of those programs is the $24 billion and $67 billion losses, not the $400 billion and $4 trillion it cost to purchase those assets. To put those numbers into perspective, the government has a portfolio of $1.5 trillion in student loans. Losses on that portfolio will cost the government $180 billion over the next decade: https://www.forbes.com/sites/prestoncooper2/2017/08/04/why-g....
Second, you dramatically underestimate the cost of those social welfare programs. If we scaled up our welfare system to Swedish levels, that would cost an additional $2.2 trillion more per year.[2] That is five times the upfront cost of TARP ($400 billion), and 100 times the actual cost of TARP ($24 billion). Welfare is expensive. Even if universal healthcare reduces our healthcare spending to German or French levels, we're talking 10-12% of GDP, or $2.3 trillion: https://data.oecd.org/healthres/health-spending.htm. Unlike the financial bailouts, that's (1) money you have to spend every year, not just once-in-a-generation; and (2) money you're not getting back.
Put it another way. Together, all levels of government already spend about $7.4 trillion per year. $400 billion--what the government spent on a once-in-a-generation bailout, was just 6% of what it spends every year. $24 billion--the actual long-term cost of TARP, is just 0.3% of government's yearly expenditures.
[1] Real-world example. Say in 2008 my parents house was worth $500k. The housing market collapses, and suddenly my parents need to sell their house. If they put it on the market, it would go at fire sale, say $200k. I bail them out, buying it for $450k. What was my cost of bailing them out? It wasn't $450k. It was $450k minus whatever I can ultimately sell the asset for. Say the market never recovers and I sell the house for $400k, 20% below the peak. The "bail out" cost me $50k, not $450k.
[2] Swedish government spending is 49% of GDP, versus 38% of GDP in the U.S. https://data.oecd.org/gga/general-government-spending.htm. That 11% of GDP difference amounts to about $2.2 trillion.
What does healthcare do for people of working age? It allows us to work more and more effectively, to make more money and either consume fewer subsides or to pay more taxes.
Good healthcare means more and more effective workers.
Now, I think that universal healthcare certainly provides benefits that make it worthwhile, just as the bailout provided financial stability benefits that made it worthwhile. But those things are in the benefits column. I'm talking about how much an accountant would say that a government program cost.
From an MMT perspective, the government (any one using it's own fiat currency) creates and destroys money rather than spending and receiving it, even if it pretends otherwise in an outdated effort to ape a commodity-/representational-money system.
So, viewed that way, it really has no need for such an asset.
> Now, it is true that money spent on universal healthcare isn't being lit on fire--the government and the people gain some benefit from it. But that's in the benefit column, not the cost column.
In the cost column is a reduction in private healthcare costs exceeding the I crease in public expenditures, as shown in every analysis (including ones from hostile sources), so if the government raised taxes so as to leave private taxpayers in the same position as they would be in with status quo policy, net government outflow would be reduced without any adverse impact on taxpayers.
Even under that view, you can still see a difference. Spending $1 trillion in healthcare requires the government to create $1 trillion permanently. Spending it to purchase mortgage backed securities that are eventually sold or mature requires creating that $1 trillion only temporarily (while the asset is held).
Buffett's investment during the time were an example of what the private sector can do (and my opinion, as a shareholder of brk.b, who is otherwise not a finance expert, is that the man wasn't nearly greedy enough when others were fearful, but even berkshire doesn't have unlimited reserves.)
I think the big mistake of '08 was 'bailout with insufficient regulation' - if the government does need to do a bailout, that bailout should come with rules to prevent that sort of thing from happening again, and I think that there wasn't enough of that rule making after the '08 crisis.
I was just making a more general statement about the role of government in response to what I thought you were implying by pointing out the differences between how an investment in a failing company (that then doesn't fail because of your money) is accounted for differently than an investment in another person's health or education, even if the latter may net more.
In general I think the government should mostly stick with things that the private sector can't do well. The private sector is really bad at investing in things like healthcare and education for the poor that make people go from being net consumers to net producers. Government should largely focus on the things that government can do effectively but that the private sector can't do effectively. Usually this means providing services to the indigent and providing regulation (not direct ownership) of markets. But there are obviously exceptions, and I agree that '08 was one of those, it was a market failure that was big enough that the private sector couldn't really handle it, and I think direct interference was a net positive, even if I think the government could have done a much better job of it.
The Fed printed trillions in new money and pumped it into asset classes, mainly the housing market, through a middleman--Wall St.
Even if you ignore everything wrong there and just say "they eventually got some of their money back" like you did, it still matters that they printed (ie effectively stole in real terms) 4 trillion dollars that they didn't own.
If you or I went out and printed US currency and bought securities with them--we'd go to jail. They wouldn't care that we made money on our investments.
Most of the profits from QE appear to have gone to Wall St (1), whom made 650M from it.
If the Fed is going to print trillions, at least buy healthcare or space exploration with it. Stop this circle jerk nonsense with Wall St.
1-http://fortune.com/2014/07/23/big-banks-made-650-million-off...
Printing money might be bad policy, but how is it stealing? The U.S. has the sovereign (and Constitutional) right to create money. (Also, the Fed's job is literally to create money to meet economic targets. SOMA was unprecedented not because the government "printed money" but because it bought an asset class it previously did not buy--securities.)
> If the Fed is going to print trillions, at least buy healthcare or space exploration with it. Stop this circle jerk nonsense with Wall St.
This is again ignoring the fundamental difference between printing money for consumption, and printing money to buy assets. If the fed prints money to buy healthcare or space exploration, it doesn't get that money back. If it prints money to buy assets, it gets almost all of that money back.
This is not an esoteric or meaningless distinction. The federal government originated $1.4 trillion in student loans since 2009. Would you call that a $1.4-trillion "free college" program? Of course not. People have to pay the money back, and the government will get most of their money back. The actual cost will be about $180 billion. By contrast, the government had spent that $1.4 trillion on healthcare or space exploration, it would have actually cost $1.4 trillion.
You can argue about the merits of bailing out Wall Street. But what you can't argue about is what it actually cost the government about $100 billion, not $4 trillion.
The right is actually with congress to have the power to do this. The Fed doesn't have any constitutional authority to do this.
Money gets its value from real goods and services. So when someone prints new money it steals that value from those who created it. The Fed likes to claim they create value, but they are just money changers.
Also, I wouldn't say it's clear that healthcare or space exploration aren't assets, even in the strict financial sense you mean. What's the expected taxable value of a citizen? If you invest less than that on keeping them alive, then their life is an appreciating financial asset. Similar logic applies to space programs, if the space capacity you fail to build out ends up being something you buy from another country (as in the case of US astronauts riding to the ISS on Soyuz). And of course this is the shallowest of analyses - there are substantial additional hidden (financial) costs to letting your citizens die, or being dependent on foreign powers for space infrastructure.
The thing I find puzzling, and possibly telling, is that conventional wisdom tells us inflation ought to have spiked after the 2008 bailout. Instead it plummeted, indeed briefly became deflation. This tells us that money became very scarce. Why, after so much money was printed and handed out? Because it all went to the banks, and they essentially pocketed it and didn't lend it out. So what exactly was the purpose of doing that?
You are right about tarp however, that was idiotic and totally unneeded.
Is English a language you rarely use?
If you consider long-term, we should be pouring everything we have into figuring out space colonization and travel, but I also just want to live in The Culture already, so I'm biased.
Then I realise I'm happy to have been born at all, getting to appreciate the universe for 39 years (next Thursday) was a good deal.
To experience daily beautiful music like Queen, it's truly amazing what we have and if it is all random how much more beautiful is it that this all came from chaos? Maybe our chaos that is politics/divisions might work itself out into something more beautiful as we lift ourselves up and move into the universe. It's inevitable that life on earth will end someday, entropy and all. I'm hoping mankind doesn't. I'm hoping we figure out how to get past the great filter if we haven't already. I sure as hell hope we get past climate change, as that could be the filter and it's ever looming, even on my own children's heads.
Why do we need to "colonize space?" Show me mankind living peacefully and within its means on our enormous rock, and then I'll get excited about us spreading elsewhere.
Until then, I get the uneasy feeling that what we really want to do is shit our own bed, and instead of cleaning it up, simply spread out and start shitting in other beds.
---
Jeebus, I'm cranky!
That being said, read The Night's Dawn trilogy. The undercurrent of those books is that we settled many planets specifically due to social/racial differences that we couldn't settle on Earth, but that aren't such a problem in space. It's an interesting take on the whole mess.
Edit/to add: Maybe we'll be star trek and NOT firefly/star wars?
Seriously, it's not like there's some intrinsic worth in all these rocks spinning around fusion reactors. To the best that we can tell, there aren't any other sapient beings around who could claim we're infringing on their sense of beauty. It's just us, the only ones possessing the spark of giving meaning to things, and a lot of dead rocks waiting to be used.
Personally, I don't think we'll stop fighting and doing stupid things, but I feel it's entirely possible that - assuming we survive the next few decades as a technological civilization - we will fix up this planet. And space habitation could be very helpful in this in multiple ways - beamed energy, geoengineering, moving some kinds of manufacturing to orbit, experience in managing ecosystems gained on running closed-loop habitats, etc.
Though there are companies seriously considering mining asteroids, they're supposedly cheaper than the Moon because they have no appreciable gravity.
NASA now does more different things but in terms of human spaceflight they have basically totally mismanaged it for 60 years.
Well that’s easy to fact check... so how do you figure? https://en.m.wikipedia.org/wiki/Budget_of_NASA
NASA's budget peaked in 1964–66, when it consumed roughly 4% of federal spending. The agency was building up to the first Moon landing; the Apollo program involved more than 34,000 NASA employees and 375,000 employees of industrial and university contractors.[18]
In March 1966, NASA officials told Congress that the 1959–72 "run-out cost" of the Apollo program would be an estimated $22.718 billion. The total cost turned out to be between $20 and $25.4 billion in 1969 dollars (about $136 billion in 2007 dollars).[19]
The costs of the Apollo spacecraft and Saturn rockets came to about $83 billion in 2005 dollars. Apollo spacecraft cost $28 billion, including the command and service module, $17 billion; lunar module, $11 billion; and launch vehicles (Saturn I, Saturn IB, Saturn V cost about $46 billion in 2005 dollars).[20]
That's not a true statement, unless you're talking about non-adjusted nominal dollars (that while technically true, is somewhat misleading). In inflation adjusted terms, the current budget is less than half of what it was during the Apollo years. Expressed as a percent of the federal budget, current funding is 1/8th of what it was at its max, though that's largely a function of the growth of non-discretionary federal spending.
An economy that lives paycheck-to-paycheck will eventually lose the skills that it does not pay for every two weeks.
Also, if you need to educate 1000 people to hire the best 100, those other 900 still need decent jobs, otherwise students may choose to be educated into skills with better payoffs.
(Of course don't get me started about what we could do on Earth for this money.)
We are just very clever tool using animals, not yet a truly intelligent species. I don't think we'll truly be "intelligent" until our intelligence is able to overcome both our evolutionary legacy and game theoretic effects that emerge in our economies and societies. A true intelligence would be the master of these things. We are slaves to them.
Also, I think you'd want to build your O'Neill cylinders in one of the Langrangian positions between Earth and Moon, not Lunar orbit.
A truly intelligent species would actually be working substantively on these projects, instead of merely talking about them.
The ROI on the former is many orders of magnitude better.
Also an extinction level event happening on this planet is a certainty, so it's actually an infinite order of magnitude better to figure out how to live in space than to only focus on saving the earth.
But again, a truly intelligent species would do both.
The dinosaurs are a good example of a group of species that weren't far-sighted enough to invest in a serious space exploration and settlement program.
If we knew that a cretaceous extinction event will happen five, fifty, or five hundred years from now, it'll be orders of magnitude easier for civilization to survive on Earth, then it will be for it to survive in space.
If dinosaurs had opposable thumbs, and technology, they would have been better off bunkering down. No matter how uninhabitable some freak civilization-ending event would leave the Earth, it would still be more habitable then anywhere else in the Solar system.
It's also quite possible to do multiple things at once when you have a civilization with many members. So as I said before, a truly intelligent species would not put all its eggs in one basket. They'd work on figuring out how to colonize space at the same time as figuring out how to deflect asteroids and also handle asteroid impacts if they did happen.
When you have limited resources, you deal with a problem that's going to affect half the population of the planet in the next 20 years, as opposed to dealing with a much harder problem that might affect the entire population of the planet in a once-per-fifty-million-years lottery.
We are currently putting all of our eggs in one basket, because climate change will kill modern civilization much faster then we can move the entirety of modern civilization into a <even less hospitable off-planet environment>.
An 'intelligent' person would do all of those things - because, after all, nuclear war can start any moment, our roads and sidewalks are dangerous places, and you never know where your next meal is going to come from.
Worrying about planet-ending disasters, and establishing civilization in space is much like doing any of the things I've listed. It's not intelligent - it's a non-cost-efficient response to incredibly unlikely occurrences. Especially when there are incredibly likely occurrences, that we'd be much better off preparing for, instead.
In short, planet-ending disasters are not the only reason to develop these capabilities, and it's shortsighted and stupid to continue to destroy our environment here without taking advantage of all the resources and opportunities outside our gravity well.
If we cared about this sort of thing, we would be doing it now, as opposed to sitting on our hands, waiting for magical space unicorns to be invented.
And if SpaceX, Blue Origin and the private sector become viable players in space, then NASA might be shut down or absorbed into Space Force.
With China, EU, Japan, India, etc getting involved in space exploration, it's inevitable that space is going to be a new frontier of militarization and privatization. Space Force and the private sector are natural players in this new arena. Not sure where NASA fits in this picture.
Looks like the latest year they have for 2016, but still useful.
But at least Will Smith is still around in case the aliens invade, so i feel safer......
Follow the money.
Where do you think the next frontier is? Do you think that humanity, which has warred with itself for its entire existence, is going to stop warring with itself when it’s living in space? If so, I have a wall to sell you.
Do you not want the US to have a military presence up there?
Do you want the US to take a backseat while China and Russia build out their own military capabilities in space?
You’re like a person in the 1400s laughing at a country for building a navy.
So yes, any new military service branch is going to have overhead. But the Air Force already provides the structure and overhead for the space initiatives
The Space Force is more about formalizing (and potentially funding) this branch of the AF separately from the main budget of the AF. There will still be a little additional overhead, but not really like you're implying.
Ha ha, only a rube would believe in a grift like a wall, the smart set are over here with the guy running the Wall scam to finance his real 'insider' project, the 'Space Force' which is totally legitimate and not at all a procurement bonanza. Sure there's a treaty about the non-militarization of space but let's ignore that and pretend it's already obsolete, while we also pretend that the air force hasn't been handling our Sekrit Space Stuff just fine for decades.
https://en.wikipedia.org/wiki/Military_budget_of_the_United_...
I think space is cool. I have a degree in aerospace engineering because of that. But if you look at space exploration in terms of ROI it has sucked.
Things like asteroid mining, colonization. Worth trillions. No, we don't have a convenient number for what asteroid mining is worth - a better unit would be 'civilizations'?
It even could bring space dominance if that's important.
I'll leave this here:
https://spinoff.nasa.gov/Spinoff2008/tech_benefits.html
Highlights -
- Water purification
- Land mine removal
- Freeze drying technology
- Fire resistant reinforcement
- Solar power
- Satellite phones
- GPS
All having significant military applications, as well as public benefit.
https://en.wikipedia.org/wiki/Apollo_Guidance_Computer
I'd have to think that SMT was available prior to the AGC development, but I don't think it was as widely used commercially (maybe more for the military and avionics?).
All the positive aspects of America's place in the world's consciousness rest on our achievements and leadership in technology, education, and exploration. In other words, NASA.
We have a lot of black marks on our reputation, too. If we keep neglecting our proudest achievement, that's all we'll have left.