Posted by Mark R. Whittington at January 6, 2005 12:21 PM

Unfortunately, it’s not that simple. I believe that you are right about the current level of Federal deficit, but the trajectory is all wrong and the total public _debt_ continues to accumulate. Moreover, personal debt is at an all time high (I understand that well over half the population has borrowed so much that they actually have negative equity in their homes, meaning that if they sell their homes they will will be left with a net loss). It is the _total_ debt of the nation — private and public — financed by the savings of other countries, that is so troubling.

At the other end of the equation, even in the absence of the war, the national obligations are also on the edge of a major increase. In theory, I suppose the government could default on these obligations, but only at the risk of major social disorder. People out here in the West are already on the edge of revolt over the lack of freeway maintenance and expansion. (I am quite serious.)

These two trends are going to come together in the next decade or so, and I fear that any space exploration initiative will get lost in the crash.

These problems are not wholly, or even largely, of the Bush Administration’s making. However, Mr. Bush’s fantasy budgeting has made all of them much worse, and he has been truly unprecedented in his willingness to pretend that everything is fine.

— Donald

While spaceflight did better than most, this years’ budget still reflected a refusal to make decisions — essentially everything got funded.

If our political coalition should change for any reason — such as even tougher spending choices or Republic refusal to acknowledge and reward the contributions by Democrats (frequently demonstrated on this list) — it could easily fall apart.

More importantly, we will soon enter an era where politicians will no longer be able to fund everything and will _have_ to make choices. The dollar is on the edge of no longer being the world’s currency of choice, and if and when that happens, it will have dramatic negative consequences on our ability to finance the deficit with forign money. Since nobody is saving, we can’t finance it with internal money. The inevitable result is much higher interest bills, for both individuals and the government, which futher limits what you can borrow and spend. Likewise, somebody will have to pay the pensions of all those people who are accumulating credit card debt instead of savings, or you will have large numbers of widdows (who live longer than men) starving on the streets — which is something even Republicans are not going to allow to happen. Add in middle class promises that are coming due (Social Security, Medicare, infrastructure mainenance), and the next decade will see a vast funding crunch, similar to what an individual experiences when their credit card payments exceed their income.

Most people — e.g., almost everyone on this list, are simply pretending these problems don’t exist, similar to the individual who ignores accumulating debt until it is too late. Unfortunately, ignoring debt does not make it go away, and, since our debt is owned by Japan, et al, it will be much harder for the US to declare bankruptcy (while needing to continue borrowing) than it is for an individual.

Where does space spending fit into that?

— Donald

That’s not what I said, which was much closer to Bill White’s argument. What I was saying is that, if Mr. Bush and Congress continue to drive deficits ever higher for whatever reason, higher priorities (defined as those directly affecting middle class voters) will subsume any increased space spending. Republicans and Democrats alike will not endanger their re-election for a minority interest like spaceflight. I give Mr. Bush enormous credit for his space policy, but it is almost certainly accurate to say that, even in Mr. Bush’s administration, spaceflight is seen as a luxury. If something has to get cut, spaceflight clearly won’t be first on the table — but it won’t be anywhere nearly last, either.

Also, if you look around the world, there is no obvious correlation between low tax states and space spending. You could make a better case for low tax states and spaceflight performance, but even here Russia would probably win.

— Donald

Today the people investing in space ventures — folks like Allen, Bezos, Branson, and Carmack — are “true believers”: they’re spending their own money because they truly believe in space, in spite of (and not because of) the economics. (Carmack in particular seems to treat his efforts like an overgrown hobby, in much the same way Larry Ellison spends millions racing yachts.) Only extreme, confiscatory changes in tax law would change their plans.

That’s why I’m skeptical of tax incentives to promote space commercialization, like Rohrabacher’s 0-g/0-tax proposal. These efforts imply that a little tax incentive is all that’s needed to close the business plans of space venture and open the spigots of investment. Other than the Scaled/Virgin space tourism announcement (made by true believers and not dispassionate institutional investors), there seems scant evidence that this is the case.

Credit where credit is due. After the fact. But never praise the pudding until you’ve eaten some.