Post #4006: Rant of the Day: People Who Think Government Should Spend More On This Vs That

I've heard a variation of this line since my childhood, and it has always annoyed me, even during my salad days as an uncommon fiscally conservative social liberal. A number of progressives complained that the space race, the money spent to land a mam on the moon, etc. was basically a waste of money. money better spent on more tangible programs for the common poor. This talking point is so familiar that the satire portal The Onion referenced it:

We cannot, as a country, justify sending our elite, middle-class, Cal Tech–educated astronauts into space while there are so many who spend each day wondering where their next hot meal will come from or where they're going to sleep tonight 

Now, from a libertarian perspective there are a number of things we could say about the space program. (First, let me note that I've been a short-term NASA subcontractor twice (different locations) during my work history, once as a programmer/analyst the other as a database administrator.):

• When you speak of government spending, you need to understand there are costs. For one, there are opportunity costs of what the private sector could do with said siphoned assets: savings/investments and consumption. Second, government does not operate in the real economy; it runs on deficits and debt impossible for the private sector. I won't go into the details of how government subsidies, regulations, etc.,have exacerbated costs, e.g., in the healthcare sector, the intrinsic pricing and allocation issues faced by the government (as discussed by Mises and Rothbard, among others); David Friedman's law says that it costs government twice as much as anyone else to do something; you need to keep in mind the deadweight loss caused by taxes and government regulations, e.g., rent control, minimum wage laws, the progressive income tax, occupational licensing, etc. The government has sticky labor costs and differing incentives and accountability. Civil service doesn't reward risk-taking, cost-cutting;; it is a monopoly. Never mind the serious problems of fraud, waste, top-heavy bureaucracies.
• There are serious moral hazards to welfare state policies and unintended consequences. A key one is the disincentive to work; there's the risk of losing one's benefits if one does work and earns "too much". There's the damage to many urban black families, a large percentage of them single-parent households.
• There is simply no evidence that LBJ's War on Poverty and subsequent enhancements did anything more than sustain an existing trend in place before government intervention. I saw one statistic that claims private charity (voluntary contributions of funds and labor) amounts to up to a half of government welfare system expenditures, meaning charity is serving needs not addressed by government; Husock discusses some of the distinctive competencies addressed by charity here and points out many ineffective programs like Head Start where any benefits do not seem to last beyond primary school. Not to mention how government policy creates uncertainty in the private sector. For example, hospitals scaled back some of their support for poor/low-income patients with the introduction of ObamaCare. Not to mention that local government policies often discourage private-sector efforts (e.g., food donations coming under scrutiny of Health Departments, people being threatened for feeding or sheltering the homeless, etc. Ruwart here points out that government programs are "trickle-down", with overhead (the bureaucracy) siphoning off nearly 75% of program funding, while in the private sector the reverse is true, i.e., about 75% of the benefits going to beneficiaries.

I could go on and on where politicians gripe about how other forms of government spending are a zero-sum game at the expense of their own parochial spending preferences. A common one is the spending on Gulf Region interventions, money which could be better spent in domestic spending.

I am somewhat sympathetic to some of these criticisms. I think to a certain extent NASA's monopoly discouraged private sector investment in space-based initiative. (I do think one can make an argument that space initiatives can play an important role in national defense, a natural extension to the Air Force.) There certainly is no doubt in my mind that the space program was a way of promoting the interests of the central government. 

And as a non-interventionist, I agree the American taxpayers have paid a staggering cost in blood and treasure in Gulf Region nation building, not to mention an 800-base foreign empire. 

The problem is that ALL government spending is unsustainable, everything government touches (healthcare, mortgages, college funding, etc.) turns to crap, with sky-high inflation in affected sectors. We have government interest payments on a $22T debt that are approaching the spending on large-scale priorities, like the defense department. We need to talk about using any savings from discontinued funding being used to balance the budget and pay down the debt, not being used to grow the government elsewhere.