Stimulating!

By John Conway | January 15, 2009 8:06 pm

The US House unveiled an $825 billion, two-year stimulus plan today, crafted by the Obama transition team and House Democrats. There is a hefty amount for basic research in the sciences, totaling some $10 billion! My eyes are instantly drawn to the $1.9 billion directed to the DOE Office of Science, which funds my own field. It is hard to overstate how fantastic, and sorely needed, this is. Here is the relevant part of the plan summary:

TRANSFORMING OUR ECONOMY WITH SCIENCE AND TECHNOLOGY
We need to put scientists to work looking for the next great discovery, creating jobs in cutting-edge technologies and making smart investments that will help businesses in every community succeed in a global economy.

Broadband to Give Every Community Access to the Global Economy
• Wireless and Broadband Grants: $6 billion for broadband and wireless services in underserved areas to strengthen the economy and provide business and job opportunities in every section of America with benefits to e-commerce, education, and healthcare. For every dollar invested in broadband the economy sees a ten-fold return on that investment.

Scientific Research
• National Science Foundation: $3 billion, including $2 billion for expanding employment opportunities in fundamental science and engineering to meet environmental challenges and to improve global economic competitiveness, $400 million to build major research facilities that perform cutting edge science, $300 million for major research equipment shared by institutions of higher education and other scientists, $200 million to repair and modernize science and engineering research facilities at the nation’s institutions of higher education and other science labs, and $100 million is also included to improve instruction in science, math and engineering.
• National Institutes of Health Biomedical Research: $2 billion, including $1.5 billion for expanding good jobs in biomedical research to study diseases such as Alzheimer’s, Parkinson’s, cancer, and heart disease – NIH is currently able to fund less than 20% of approved applications – and $500 million to implement the repair and improvement strategic plan developed by the NIH for its campuses.
• University Research Facilities: $1.5 billion for NIH to renovate university research facilities and help them compete for biomedical research grants. The National Science Foundation estimates a maintenance backlog of $3.9 billion in biological science research space. Funds are awarded competitively.
• Centers for Disease Control and Prevention: $462 million to enable CDC to complete its Buildings and Facilities Master Plan, as well as renovations and construction needs of the National Institute for Occupational Safety and Health.
• Department of Energy: $1.9 billion for basic research into the physical sciences including high-energy physics, nuclear physics, and fusion energy sciences and improvements to DOE laboratories and scientific facilities. $400 million is for the Advanced Research Project Agency – Energy to support high-risk, high-payoff research into energy sources and energy efficiency.
• NASA: $600 million, including $400 million to put more scientists to work doing climate change research, including Earth science research recommended by the National Academies, satellite sensors that measure solar radiation critical to understanding climate change, and a thermal infrared sensor to the Landsat Continuing Mapper necessary for water management, particularly in the western states; $150 million for research, development, and demonstration to improve aviation safety and Next Generation air traffic control (NextGen); and $50 million to repair NASA centers damaged by hurricanes and floods last year.
• Biomedical Advanced Research and Development, Pandemic Flu, and Cyber Security: $900 million to prepare for a pandemic influenza, support advanced development of medical countermeasures for chemical, biological, radiological, and nuclear threats, and for cyber security protections at HHS.
• National Oceanic and Atmospheric Administration Satellites and Sensors: $600 million for satellite development and acquisitions, including climate sensors and climate modeling.
• National Institute of Standards and Technology: $300 million for competitive construction grants for research science buildings at colleges, universities, and other research organizations and $100 million to coordinate research efforts of laboratories and national research facilities by setting interoperability standards for manufacturing.
• Agricultural Research Service: $209 million for agricultural research facilities across the country. ARS has a list of deferred maintenance work at facilities of roughly $315 million.
• U.S. Geological Survey: $200 million to repair and modernize U.S.G.S. science facilities and equipment, including improvements to laboratories, earthquake monitoring systems, and computing capacity.

Obviously it will be some weeks of Senate/House wrangling to arrive at a final plan, but my expectation is that something along these lines will become reality very soon…how the DOE divvies it up will be an interesting exercise, I imagine. But it’s the kind of problem we want.

I have said it before and I will say it again – if we are going to mortgage our children’s futures, mortgage it on this. And better health care. And infrastructure. Oh, and education, public housing, energy…hmmm. I can see that $825 billion may be about right.

CATEGORIZED UNDER: News, Science and Society
  • Low Math, Meekly Interacting

    And some folks say this isn’t enough! They want stimulation in excess of a trillion! Haven’t we already burned through half of the $700 billion bailout? I see sums like this and it’s meaninglessly huge to me. If somebody made a pile of a trillion dollar bills, how big would it be? If I had a trillion dollars in a savings account, starting right now, what would it take for just little ol’ me to spend it all? Would I even be able to keep up with the interest? It’s staggering.

  • http://carlosscheidegger.wordpress.com Carlos

    @Low Math:
    This is what 1 billion dollars look like, so just think of U$10^12 as 10 times as large as that in all dimensions. Thirty pallets side, forty deep, and piled 150 times the height of a $100 bill:

    http://infosthetics.com/archives/2009/01/one_billion_dollar_physically_visualized.html

  • John

    It is beyond any of us to say how much stimulus the economy needs to avoid a true depression, global this time, with unemployment in double digits and people truly going hungry (more than already do, that is) for years to come. But stimulus can work and must be directed where we can get the most bang for the buck.

    To put it in perspective, the total global market capitalization is on the order of $50 trillion. That’s the sum value (at least the perceived value) of all publicly traded corporations. The US gross domestic product is around $14 trillion. The federal budget is $3 trillion, at least before all the bailing out started. By some accounts the federal government has spent that much in all the bailouts so far, including the $700 billion TARP.

  • djangone

    We haven’t burned through half the $700 billion, as in spent it for no return. Here’s Krugman:
    http://tinyurl.com/8496jq

    Here’s Joseph Stiglitz:
    http://tinyurl.com/75tpmg

  • Brian Mingus

    10 billion for basic science seems low.

  • Jason Dick

    Yeah, that article by Paul Krugman is a good read on this.

    Also of importance is that a large fraction of that money will end up returned to the government as taxes, so the $825 billion price tag is actually disingenuous. It’ll likely be closer to around $500-$600 billion once the taxes are paid. Krugman’s got a good blog post on this:
    http://krugman.blogs.nytimes.com/2009/01/13/bang-for-the-buck-wonkish/

    The really crappy thing with the bailout, however, is that a large portion of it is in tax cuts. These are a pretty big cost that effectively do nothing in the current economic conditions. And they don’t have the nice cost reduction that spending offers through tax returns of the spending.

    The basic problem is that the whole reason why we normally don’t want government to manage most of our economy is that the free market is so vastly more efficient at allocating resources. But when there’s a major economic crisis, suddenly the free market becomes horribly inefficient, and the government can step in and dramatically improve things by taking up the slack. Government spending continues to be a total positive effect upon the economy all the way up to the point where full employment is reached (about 5% unemployment). And this stimulus package won’t even get close to that. Heck, it won’t even stop the unemployment from rising.

  • http://telescoper.wordpress.com Peter Coles

    “A society in which consumption has to be artificially stimulated in order to keep production going is a society founded on trash and waste, and such a society is a house built upon sand.”

    Dorothy L. Sayers (written in 1947)

  • Metre

    Here’s the thing: government does not create wealth, it just redistributes money from one part of the economy to another. That is, it robs Peter to pay Paul. That’s obviously good for the Pauls in the economy, but bad for the Peters. Who can say whether Paul will make better use of those resources than Peter would have? At best, stimulating some sectors of the economy by depressing others seems like a zero sum game. I’m hoping for the best, but not expecting much.

  • http://partlydave.blogspot.com David Carlson

    We need the broadband service in our wide community along the North Shore of Lake Superior. Permanent resident population is too small, less than 20,000 in Lake and Cook counties combined. The major providers don’t see the 50,000 or so visitors on a typical summer weekend, who would like to use their wireless devices, and who could turn their lake homes into permanent residences if there were some way to telecommute. We make do with Verizon National Access, which is about 1/3 the speed you need to watch YouTube or stream a Netflix movie to XBox360.

  • http://togroklife.com greg

    I’m glad to see the 6 billion for broadband services, happy for the 1.6 billion for the DoE, happy for the 1.9 billion for various disease research (though bummed that it’s a too late for my dad’s group at NIEHS to be restarted)

    but I’m disappointed that NASA only got 600 million

  • Low Math, Meekly Interacting

    I think the Peter-Paul argument breaks down pretty hard when Peter accumulates nearly all the money and subsequently squanders it. That’s a negative sums game, and is precisely what we’ve experienced through years of “trickle-down” supply-side economics. Now you need James to borrow a metric crapload from Judas and spread it all around. Hardly more reassuring, but the theory, I guess, is that it worked in the 30s, and might just again. I’m agnostic. Back then we had a depression followed by the Second World War, followed by the Cold War, its arms race, the attendant bloating of the military-industrial complex, which somehow fostered a more Monetarist economic philosophy that held as a central tenant the military-industrial complex was about the only thing the govt. should spend money on.

    Will that history repeat itself? Who the Hell knows?

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  • John

    Metre, government *can* create wealth by seeding the development of new technologies and scientific research that is simply too risky for private industry to undertake. We all benefit from this in the end.

    You might argue that we should go back to the good old days when giant labs like AT&T’s and IBM’s supported basic curiosity-driven research in addition to applied research. I would agree, but can they afford it in this era when their Wall Street task masters are focused on the short term.

    The bulk of basic, curiosity driven research is best centered at our research universities, and we’ll take whatever funding we can get, thats for sure!

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  • Doug A

    I’m happy to see the Obama team paying attention to the basic sciences, but this plan will only lead to disaster in a few years. Research does not operate on a two year time scale. Facilities take years to plan and build. People need to be trained, receive degrees, and then have a career to benefit from the educational investment. What happens in 2 years, after we’ve built some new stuff and hired more people? Unless operating budgets increase in kind, these facilities will need to be closed and people laid off.

    Science needs reliable, long term budget support over decades. I fear this ‘stimulus’ will be akin to a hit of cocaine, with a predictable crash at the end.

  • Metre

    @John

    I won’t argue that basic scientific research benefits everyone. Life for the average person in 1300 AD was no different than it had been in 1300 BC. Life today, however, is vastly better for the majority of people in the world and we have science and technology – plus free markets – to thank for it. Science spurs technology which spurs innovation and economic development.

    However, economies are more complex than any one person or committee of the most learned experts can ever comprehend or control. No one can say if the stimulus package will make things better or worse than if the economy were left alone to recover on its own. That extra $$ won’t appear out of the quantum vaccuum – it has to be taken away from some other part of the economy that will suffer as a result. By the way, many economists today believe that FDR’s New Deal did more harm than good and probably prolonged the Great Depression.

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  • Doug A

    @ Metre:

    Economists’ views on the New Deal vary greatly, depending on their political views. Plenty think that the new deal programs weren’t big enough to to much of anything. Others point to FDR’s tax increases ~1936/1937, while trying to balance the budget, that prolonged the depression.

    I’m sure our fellow blog readers can come up with links to support these, and plenty of other viewpoints.

  • Brian

    @ Doug

    If an “economist’s” economic views depend upon his political views, then his economic views are compromised and insufficiently thought out.

  • Doug A

    @Brian

    In principle, I agree. However, there are multiple schools of thought in economics, mainly classical and Keynesian. After a rigorously unscientific survey, republicans tend to be classicists and democrats tend to be Keynesians.

  • John R Ramsden

    There’s an interesting article on Obama in this week’s Spectator titled I have seen your future, America, and it doesn’t work.

  • ccous

    Total numbers for bailout as of Nov 8, 2008.

    (TAF) Term Auction Credit (allocated) : 900 billion
    AIG (allocated minus Treasury 40B) : 112.5 billion
    Bear Stearns (initial loan to JPMorgan) : 29.5 billion
    (TSLF) Term Securities Lending Facility : 225 billion
    (MMIFF) Money Market Investor Funding Facility (allocated) : 540 billion
    (CPFF) Commercial Paper Funding Facility *upper limit from Reuters : 1800 billion
    (TALF) Term Asset-Backed Securities Loan Facility : 200 billion
    GSE MBS NO NAME Program : 600 billion
    (TARP) Treasury Asset Relief Program : 700 billion
    Exchange Stabilization Fund to guarantee principal in money market mutual funds : 50 billion
    Treasury direct purchases of MBS since Sept. (08) : 26.5 billion
    Citigroup (Treasury+FDIC guarantees) : 238.5 billion
    Guarantees for Banks : 1900 billion

    Automakers : 25 billion
    (FHA) Federal Housing Administration : 300 billion
    Fannie Mae/Freddie Mac : 350 billion

    total ~ 7.361 Trillion $

  • ccous

    Abover numbers are from: http://www.cnbc.com/id/27719011/

    More details are there.

  • ccous

    Current US debt is 10.6 Trillion. Wikipedia has a nice breakdown of who holds this debt. http://en.wikipedia.org/wiki/United_States_public_debt.

    I put all this information here as it seems that we forget the size of what we are doing. It appears that none of the 487 folks in control (435 in the house, 50 in the senate, + president of the senate + president) are applying problem solving skills to their decision making. It also appears that no one here is, or really, elsewhere.

    I say someone has been using problem solving skills when I can point to each of the following steps as being done (meaning I can show the result of each step).

    · Understand the problem by processing information about it.
    · Analyze the problem by breaking the problem down into its component dimensions.
    · Expand alternative courses to solve the problem.
    · Define values to study the impact of the alternative courses.
    · Evaluate courses of action based upon the most positive impact on our values.
    · Improve courses of action.

    (source: http://www.hrdpress.com/Productive-Problem-Solving-PPS)

  • Brian

    @Doug

    “In principle, I agree. However, there are multiple schools of thought in economics, mainly classical and Keynesian. After a rigorously unscientific survey, republicans tend to be classicists and democrats tend to be Keynesians.”

    In some cases, some of the political views may derive from or be independent of the economics, but if the “economic theory” derives from the political preferences, then that economic “school of thought” would seem to be more in the nature of a rationalization than a legitimate formulation. I would tend to pay more attention to someone who seemed to be an economist first and foremost, rather than a politician or political commentator who claims to have suddenly developed a consuming interest in theory. I am also wary of pronouncements by those who seem to have a financial stake in political outcome – their opinions may be biased. I tend to put more stock in the opinions of university economics professors, for instance – people who have, quite typically, passed up the chance to make bigger bucks in more remunerative areas of the larger to community to devote their careers to doing the best they can to discover and analyze the truth of the matter, and whose reputations within their field depends largely on the cogency of their intellectual products as judged by their peers within the discipline.

  • Low Math, Meekly Interacting

    Thanks for that link, ccous. It made me sick to my stomach, but I thank you nonetheless.

  • Michael

    If Democrats are the superior life form, why do they need to tax Republicans for child support?

    Inquiring Independents already know.

  • chemicalscum

    Economics is not a science not even a “dismal science” it is ideology, well at least in the case of the Chicago boys.

  • incog

    Disregard the self-centered Partisan comments here.

    Remember that the people trying to make this world worse are not taking days off, so neither should we that are trying to make it better.

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