Posts Tagged ‘stimulus’

A new economic model

2010/02/21

Right now, we don’t have time for dealing with health care costs, new legislation regarding the financial industry, or immigration reform.  We have a great need to re-invent our economy, immediately, before we slip further into recession.  Our old economy depended too much on manipulating money to make money, on huge profits on inefficient automobiles, and credit.  Consumer spending was the engine of the economy, accounting for 70 percent of all economic activity.

Those days are long gone, and they are not coming back soon.  But our economic model has not changed, and millions of people are sliding into permanent unemployment.  Somehow, we have to find a way to create things that other people, people outside the United States are going to want.  They do not want our automobiles, they do not want our computers, they do not want our clothes.  What does America do better than anybody else?  Besides screw, start wars, and piss people off in general, I mean.

We are the world’s leader in advanced aerospace technology right now.  We are currently operating the only reusable spacecraft in the world.  We have learned tremendous amounts about getting into space and getting back.  By applying that knowledge to the development of a new generation of spaceplane, spacecraft designed solely to climb a short distance out of the atmosphere, and then return, we could lay the groundwork for another industrial revolution, one which would create more new wealth than has been made in all of Earth’s history.

The most difficult part of space travel is the getting into space.  We have to accelerate ourselves to a velocity of 5 miles per second, 17,500 miles per hour, to be able to stay in orbit.  There are several different rockets that can put freight into space, but only a few which can carry people.  The space shuttle is one of them, and it is set to be retired this year.  After that, the United States will not have a way to reach space, and will have to buy seats from the Russians to send our astronauts to the International Space Station.  NASA had been developing an old-fashioned rocket to carry a small number of people into space, but it duplicates the capabilities of several existing American rockets in most ways.  And none of the current or projected rockets will be able to carry more than a few people at a time.

This coming industrial revolution is going require people, lots of people, people who will be living and working in space.  Getting them there is the only thing holding up this new revolution.  Once that bottleneck is broken, investment in space stations; laboratories and orbital factories, is going to start.  The United States has a head start in building the type of spacecraft that will be the backbone of space travel in the future, which will look a lot like the space shuttle.  But, unlike the space shuttle, this spacecraft will only carry people, at least at first.  The parts for the space stations can be sent up on freight rockets that already exist.

But having people use a rocket means that it has to be ‘man-rated’, which means that the chance that a malfunction will result in the death of the crew is minimized.  These requirements add so much weight to existing rockets that they cannot be used.  That is because they all take off straight up, which means that failure will have the crew right in the middle of a whole bunch of explosive materials.

But there is another way of reach space, besides going straight up in a rocket.  By carrying the spacecraft to about 50,000 feet of altitude, the spacecraft can be launched where the air is thin enough that the spacecraft can fly horizontally and still go fast enough that it will reach space.  Lower down in the atmosphere, the air is too dense to be able to do that, which is why rockets launch straight up, then curve toward the horizon.

The United States, under the guidance of NASA, could build the immense carrier wing needed to carry the spacecraft to launch altitude, and the spacecraft that will then fly to orbit, and return, to land where it took off, where it will be prepared to fly again.  This kind of launch system can operate in bad weather, which rockets generally avoid, and does not require huge numbers of people to monitor every aspect of the spacecraft, the launch site, and the surrounding area.  Because a malfunction will simply result in the spacecraft flying back to the landing sight, and not blowing itself apart, with the crew section floating to earth by parachute, it is not necessary to be aware of every detail.

Space flight which does not have to wait for perfect conditions, perfect performance, is the prerequisite of this industrial revolution.  It must be low-cost, safe, and reliable.  We have the ability to make it happen, and doing so in a short time would require the work of many people.  It would also result in many people being paid enough that they could afford to hire housekeepers, gardeners, and music teachers.  Coupled with a national program to improve the energy efficiency of the United States, employment for all could be achieved in a matter of months.

What was spent on the fiscal stimulus program would have paid for the complete development of this new spacecraft, the carrier wing, and the launch and recovery facilities, as well as the ground support needed to operate it, several times.  No other investment we can make offers the potential for larger returns, for new wealth to be created.  Other nations are anxious to take part in this revolution, and some are planning to start it themselves.

But this revolution will need people on the spot, people who can perform experiments, people who can figure out how to make things work, people to keep things working.  Lots and lots of people.  People who will ride to work on spacecraft that take off and land like airplanes.  Spacecraft that we can, and need, to build.

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Which road to recovery?

2009/12/13

As the financial crisis has evolved into an economic crisis, where unemployment and diminished consumer spending have replaced toxic assets as the poison in the system, more calls for tax cuts are heard.  Stimulus spending is not reviving the economy, therefore another remedy must be needed, the thinking seems to be.  Conservatives have opposed the stimulus spending from the beginning, insisting that tax cuts would be more effective at reducing unemployment and stimulating private spending.  They argue that reducing taxes would allow investment into new businesses, which would create jobs.

This might be so, if the investments were made in the United States, and the jobs that were created were for Americans.  But recent history indicates that large corporations are more likely to use money freed up by tax cuts to invest in overseas production, to expand outsourcing, to maximize profits.  How is this going to help American workers?  Making products cheaper doesn’t help if consumers are unemployed, or underemployed.  Private investors are unlikely to put their money into improving energy efficiency, or alternate energy sources which will take years and years to pay off.

Conservatives object to the government simply handing out money that it has had to borrow, yet cutting taxes is basically the same thing.  Either way, the deficits will continue to increase.  But stimulus money has not been used to create new jobs in many cases, but to preserve existing ones.  States have been able to avoid laying off educators by paying them with stimulus funds, which keeps unemployment from going up more, but does not create new jobs.  Construction projects have had some positive effect, but many of those projects will only provide temporary employment.

How can we put Americans to work for the long-term, while at the same time putting more money into the hands of the private sector?  Doing one without the other is only going to prolong our agony.  Tax cuts will put more money into the hands of the private sector, but there is no assurance that it will be used to create jobs in America.  What industries are ready for large-scale investment, what sector could absorb millions of workers?

If we were to improve the ways that we use energy, so that we could accomplish the same result with fewer units of energy, we would be creating new wealth.  If we reduce the cost of heating and cooling a person’s home, we allow that person to spend a larger portion of their income on other things.  If we reduce the energy overhead costs for a retailer, that retailer can either lower their prices, or increase their profits, or a mixture of both.  And these benefits would be permanent, not just a temporary shot in the arm.

So, how about we cut taxes for those who invest in improving their energy efficiency, while using federal funds to put people to work improving energy efficiency?  In this way, we can target a specific area for improvement, instead of just handing out money in the hopes that some of it will create new jobs.  Energy efficiency is one of the greatest weaknesses of the United States, perhaps in part because consumption has made some people richer.  But choosing consumption over efficiency has made all of us poorer.