> But the truth is that not one dollar of U.S.government cash has ever been shot into space. Those dollars always go to companies all over the country, and most of it winds up in the pockets of working people. This stimulates the economy like nothing else. Well, not exactly,`because wars stimulate the economy pretty much the same way, but the choice is a no-brainer.

As much as I'm in favor of a space program, this argument is a bit flawed. The reason is that the government doesn't make money (err, okay, it does, but it tries to only print currency, not create wealth), it redistributes it. Thus, in the case of a space program or a military campaign, the government is really taking money from some people via taxation and giving it to aerospace/defense contractors.

The international economy is essentially a closed system (albeit one that's not a zero-sum system, so wealth can be created) and the government, generally speaking, is not an entity that makes new wealth. Moving wealth around in an economic system is sort of like transferring energy around a closed system: you always lose some due to friction. In this case, the government acts as a bit of a drain on the overall wealth of the economic system, since it has overhead in what it does (but since it doesn't really produce a whole lot the economic system doesn't necessarily see a net gain). So we basically must lose wealth whenever the government starts moving it around.

The reason why this sometimes helps the economy, as it did so notably during WWII, is that it can move wealth into specific economic sectors. In the case of WWII, our manufacturing and industrial sectors needed an influx of capital, which the war effort gave them. But it meant heavy taxation on other sectors.

Wars are often very bad for the economy. Vietnam was a huge expenditure, but the U.S. economy in the '70s was hardly a thing we want to go back to. The first Bush spent a lot of money in Panama and Iraq, but he got booted out of office because the economy was a slump. The reason is simply that we no longer need a bunch of money pumped into our industrial sector (despite those who are struggling vainly against the march of globalization, America is not going to be an industrial nation in the future).

If we really wanted a big government program that would help our economic prospects, we would probably be better off funding a huge information-driven program. If we were to spend several billion dollars a year on building a new Internet or an artificial intelligence or something, we would likely see positive results, since the information sector of the economy is what will be our bread-and-butter for the next few decades.

Defense and aerospace, though useful industries, have a lot of capital outlay projects that go straight to industry. Sure, designing rockets requires a lot of research and development (which is information-based), but you also have to spend a ton of cash building the damn things.

Frankly, I think the government tends to be pretty poor at figuring out how exactly to help the economy out. We've been most sucessful at managing the low-level stuff -- e.g. money supply and interest rates -- but with the exception of the New Deal, I can't think of any big government economic programs that have worked (and many would argue that the New Deal created a host of long-term economic problems we're paying for now). The best bet, I think, is just to try and reduce government spending and taxation, thus allowing the market -- which has a much better track record at predicting the future -- to determine where wealth should be directed.

All that said, I favor spending a few billion dollars to go to Mars, but that's just because I think rockets are neat.

Stephen