More Economic Stupidity - Obama Trying to Kill Part of Budget that Actually Creates Jobs
February 2, 2010 - By virtually any standard, the economic stimulus package passed last year has failed to pay dividends in the form of jobs. Unemployment remains at 10% and while many economists are claiming that the worst is behind us, there is little evidence of this on Main Street. If we are in recovery mode, it is a jobless recovery. Yet the Obama administration continues to push for additional government spending - supposedly to create or maintain jobs even though there is no evidence that the first spending package has created any dividends. At the same time, in the administration's new budget, it is cutting funding for NASA's Constellation program. And the immediate effects of those cuts will be thousands of layoffs.
If you have never heard of the Constellation program, you are not alone. Unlike the Apollo program or the space shuttle, Constellation has received relatively little publicity even though NASA has spent $9 Billion on development. The program is supposed to be the successor to the space shuttle which will retire at the end of this year. But President Obama wants to scrap the entire program; supposedly due to cost. A quick look at the numbers though makes one scratch their head in wonder. Compared to other programs being pushed by the government, Constellation is a drop in the bucket. But that drop has actually created and continues to employ thousands of people. It also has the potential to pay big, long-term dividends to the United States in areas that include science, technology and engineering.
Current spending on Constellation is relatively small. In the area of $1.2 Billion per year. If the program ends, it will kill at least 8,000 jobs at the Kennedy Space Center alone - these are jobs that are solely focused on Constellation. Additional jobs will be lost at the White Sands missile range, at the Johnson Space Center in Texas and with a myriad of private contractors that have been working on the program.
Although there is no complete estimate on the number of people working on the program, it is reasonable to believe that somewhere from 15,000 to 20,000 people could find themselves out of work. Given the programs current budget, these jobs are costing taxpayers between $60,000 and $90,000 per year.
Now, compare that with the jobs that have been created using "stimulus" money. By the Obama administrations own estimates of jobs created or saved by the stimulus package, each job is costing taxpayer around $250,000. It also needs to be pointed out that nobody in the administration or from the outside has been able to come up with a way to verify the number of jobs actually created or saved by the stimulus package. The administrations numbers appear to be a best case scenario. This contrasts dramatically with the Constellation program in which the jobs are real and the looming layoffs could easily be counted by the government if it wanted to do so.
Obama's reason for cutting the program is said to its cost. The program is over budget and NASA says that it really needs to put $3 Billion annually into Constellation to get it off the ground; an increase of $1.8 Billion annually. But if past spending is any indication, this increase would translate into an additional 20,000 to 30,000 real jobs; many of them in highly skilled manufacturing and engineering. On the other hand, if the government puts this money (the additional $1.8 Billion in spending that NASA would need) into "stimulus" job creation, at best only 7,200 jobs would be "created or saved".
If you compare stimulus spending directly to NASA spending on Constellation, creating 20,000 to 30,000 thousand jobs using stimulus money would cost taxpayers between $5 Billion and $7.5 Billion. That means that Congress could actually fund NASA's needs by cutting that amount out of the stimulus package. Not only would it create more jobs, it would save taxpayers money - between $3.2 and $5.7 Billion in savings.
As if this isn't bad enough, jobs created through the stimulus program are not anywhere near as likely to create the long term benefits of spending on NASA. After all, road construction is a lot less likely to lead to scientific advances than putting a man on the Moon or Mars. And the technology gained out of NASA's program will likely have commercial applications as well, just as there were commercial applications that came out of the space race in the 1960's.
So which is the best investment? Stimulus spending which can't be verified, or spending on NASA which costs less and provides real employment opportunities? If this was your money - and it actually is - what would you do?
The downsides associated with Obama's short sighted approach are actually too numerous to mention. Just to get to the International Space Station our astronauts will have to hitch a ride with Russia; a country with which we often have international tensions. The decision is also likely to hurt the United States militarily at a time when international threats are growing. Hopefully, Congress will see the error of Obama's ways and not allow this particular budget cut.
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