How Space Will Fix Our Failing Economy

I'm probably going to sound like I'm just following the crowd here, but I've got to say it: investment in space exploration might be just the stimulus package the world needs right now. I came onto this idea the other day when I found the video above, which was produced by YouTube user Bagtaggar.

The concept is simple: you pump a bunch of money into an industry in order to create jobs. It worked during the Great Depression in the form of public works (building bridges and dams and roads and whatnot), so why shouldn't it work with space?

Unfortunately, I'm afraid the answer isn't so simple. Certainly it makes sense on paper, that if the government commits to an expanded space program, it could undoubtedly create jobs. Job creation breeds consumer confidence, which leads to consumer spending, which leads to rejuvenation of the credit markets, and rejuvenated credit markets lead to corporate spending and yada yada yada.

But what if it doesn't work? What if creating jobs isn't the solution? I posit that regardless of whether it fixes the economy, increased spending on space, even in hard times, will accomplish a couple of important things. First, it leads to expansion of peripheral industries. Suppliers and vendors who work within the space industry will see a boom in business. Second, private space will benefit from a revived interest in space travel. And moreover, the rallying cry for expanding our horizons - not seen since the Apollo years - may just be the perfect panacea for "fear itself." And let's not forget the myriad scientific developments which could lead the way to a brighter future tomorrow. Would the rising gas prices of last year have been such a burden if the space program had led to alternative fuel discoveries? And finally, the advancements made in space today would lead to the new industries of tomorrow; space exploration, after all, is, by all measures, a relatively new industry.

What do you think? I know this topic is mired in philosophical and economic debate. Leave your thoughts in the comments.

Jonathan Card said...

The problem is that there aren't that many people that can do the work. It's not like street painting (I don't know anything about street painting; if this is high-skill labor, forgive me); rocket scientists can become street painters when they lose their jobs. Street painters can't become rocket scientists. If all you do is create more demand for rocket scientists, but there aren't more rocket scientists, it'll raise the wages of rocket scientists throughout the industry, raising the cost of space development, and won't employ more people. Increased prices might, temporarily, boost the industry, but when the stimulus runs out they'll all go out of business again when the prices come back down.

I'm a big advocate for space development, but this isn't a good area for a "stimulus", and not a credibility-gaining argument for us to make. Of course, people have made that argument and gotten the money, even when they aren't good "stimulus" projects, so maybe I'm being naive.

Jonathan Card said...

Ok, now that I've actually watched the video, I'll agree with some of that. It's true that recessions/depressions are a good time to launch new industries, but it's not because of government spending (I personally think that most of the "stimulus" provided by war-time spending in WWII didn't help, but that's a long story). It's because the "cost of capital" is very low. Last year, when you said, "I can return investors 80% returns in 5 years with Space Based Solar Power" (all numbers fictional), investors may say, "No, I can get 100% returns on dot-coms or biotech or pharma". Now, they say, "There's no dot-coms! or biotech! or pharma!" and we say, "But we can still deliver 80% on SBSP", they may say, "Well, there's nothing else; I'm game."

You don't want or need government subsidy or stimulus money near this stuff, as a general rule. If, if, if space really is profitable, it's easier to get it funded in these times than in boom periods.

So, don't call your congressman; just look for a problem to solve, do your homework, and fix it. Now is the opportunity.

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