[jerf]

The problem with the logic in this post is that it implies an unbounded amount of money funneled into research. In the real world, there's a bound on the amount of money that should be funneled into research. That bound should probably less than the amount of money it would take to bankrupt the supporting country. Any argument that doesn't even consider this question fails to impress me right out of the gate.

There isn't a government expenditure that can't be supported the exact same way and with virtually the same arguments, but the sum total of all these wonderful programs is that none of them are going to be funded at all in a few years when the funding entity is bankrupt and the dollars it can give you are worthless. Take a 20% cut now (and probably another cut soon) or a 100% cut not all that many more proposal cycles from now.

At some point the answer has to be no.

[dantheman]

Agreed, I don't think people realize just how broke the US is. In 9 years, the interest alone will consume 50% of the US budget. That doesn't leave enough to cover social security and medicare -- let alone anything else that the federal government does.

Hopefully people will start demanding cuts in other places too, for instance the DEA, DOE, DOD, etc. There just isn't enough money. The DOD budget has increased 100% in the past 10 years. We've seen massive new entitlement programs passed, these will not be able to be funded.

[wil2k]

The problem is that the debt can only grow and grow and grow. Why? Because the government is not creating the money but borrowing it from the private banks..(the Federal Reserve is everything BUT 'federal') and the government needs to pay interest. That way, there's never enough money in existence to EVER pay of the debt, because the "debt" amount of money only exists.. not "debt + interest".

So, the interest monster will just get more hungry every year, month, day and second..

I was down voted for posting the following, but it truly hits the essence of the problem:

Watch this, it's awesome:

The Secret of Oz http://www.youtube.com/watch?v=7qIhDdST27g

Quotes:

"What can government do? The sad answer is -- under the current monetary system -- nothing. It's not going to get better until the root of the problem is understood and addressed. There isn't enough stimulus money in the entire world to get us out of this hole.

"Why? Debt. The national debt is just like our consumer debt -- it's the interest that's killing us.

"Though most people don't realize it the government can't just issue it's own money anymore. It used to be that way. The King could just issue stuff called money. Abraham Lincoln did it to win the Civil War.

"No, today, in our crazy money system, the government has to borrow our money into existence and then pay interest on it. That's why they call it the National Debt. All our money is created out of debt. Politicians who focus on reducing the National Debt as an answer probably don't know what the National Debt really is. To reduce the National Debt would be to reduce our money -- and there's already too little of that.

"No, you have to go deeper. You have to get at the root of this problem or we're never going to fix this. The solution isn't new or radical. America used to do it. Politicians used to fight with big bankers over it. It's all in our history -- now sadly -- in the distant past.

"But why can't we just do it again? Why can't we just issue our own money, debt free? That, my friends, is the answer. Talk about reform! That's the only reform that will make a huge difference to everyone's life -- even worldwide.

"The solution is the secret that's been hidden from us for just over 100 years -- ever since the time when author L. Frank Baum wrote "The Wonderful Wizard of Oz."

[derobert]

I confess I haven't watched it (sounds painful), since the basic premise is wrong.

The US Treasury borrows money by issuing Treasuries, yes. It then pays interest on those, yes. The Federal Reserve creates money, and then injects it by buying Treasuries (or, recently, MBS's and agency debt, I believe, as well).

The vast majority of Treasury notes, agency debt, MBS's, etc. are NOT held by the Federal Reserve. So the amount outstanding does not pose any significant constraint on the Federal Reserve's injection of money.

Even if /all/ outstanding Treasury debt were eliminated, that'd just mean the Fed would have to purchase other bonds.

Also, when the Federal Reserve buys Treasuries, it receives the interest payments. What does it do with that money? Well, it turns it over to the Treasury. (If you look at the Fed's annual reports, this is actually many billions) So the T-notes held by the Fed to inject the money essentially don't have interest paid on them, because the Treasury is paying the interest to itself, indirectly.

[bendmorris]

The point is, we can and should take the money from somewhere else. Instead of a 20% DOE cut now, how about a 0.1% cut to defense, or another cut somewhere else, and a 0% cut to the DOE.

Politicians refuse to cut defense spending because it's not politically viable and they're more worried about getting reelected than making a difference. "Elite" research scientists make an easy scapegoat.

[jerf]

There is no "somewhere else". This was borrowed money to begin with. Look at the list: http://appropriations.house.gov/index.cfm?FuseAction=PressRe...

How many impassioned pleas based on a context-free analysis can you make from that list?

And it's not enough cutting. After all this we're still immensely in the hole. Immensely.

We're not in a situation where the household making $100,000/year has $10,000 of discretionary spending last year, and they're being jerks and not giving some of it to a good charity. We're in a situation where the $100,000/year household has spent $149,200 dollars last year[1], and has been doing this for a while. Government debt isn't quite the same as household debt, but it still isn't magic. You're complaining about a $74 reduction in spending!

We can't cut from defense "instead", we need to cut defense in addition to. Which has been seriously proposed in a way that may actually politically happen, it just isn't happening all at once.

Stop thinking about government spending as if there's a magic money fountain and start thinking about it like it's your own money. Yes, it would be great to spend twice your income on a better car, but the mere fact that it would be a great car, a really great car, man nobody should have to live without this car car does not make it a good idea. Nothing that science research is going to feasibly produce is better than having a country that is still fiscally sound, and that goes for a great deal of other things that need to be cut.

What is a bankrupt society supposed to do with the results of this research, anyhow?

[1]: http://en.wikipedia.org/wiki/2010_United_States_federal_budg... : 2010 Revenue, 2.381 trillion, 2010 expenditures: 3.552 trillion, 3.552 / 2.381 = 1.49181...

[po]

Stop thinking about government spending as if there's a magic money fountain and start thinking about it like it's your own money. Yes, it would be great to spend twice your income on a better car, but the mere fact that it would be a great car, a really great car, man nobody should have to live without this car car does not make it a good idea. Nothing that science research is going to feasibly produce is better than having a country that is still fiscally sound, and that goes for a great deal of other things that need to be cut. What is a bankrupt society supposed to do with the results of this research, anyhow?

I say stop thinking about the government spending as if a government budget is similar to a family budget or a company budget.

It is impossible for the US government to be "bankrupt" if the debt is held in US dollars. Impossible. You might not like the situation but the analogy you are operating on is deeply flawed with respect to reality and leads to bad decisions being made.

[thematt]

This is usual argument, but it's purely academic in nature. Yes, by law, the government can continue to print money indefinitely. But guess what? At some point people will stop buying that debt. So even though the government has a mandate to continue printing paper and by definition can't go "bankrupt", that's effectively meaningless when people no longer accept your currency.

[po]

If by academic in nature you mean grounded in reality instead of a bad analogy then yes it is. Now that we've decided not to view the problem through the lens of personal or corporate finance we can look at the problem as it is: macroeconomics.

Luckily, we're in agreement! Yes, inflating away the problem is fraught with peril just as you say. But I will suggest to you that high unemployment is also very perilous. The rule of law beaks down when you have high unemployment for long periods of time. We've seen some instances of that recently…

In a time when private sector is laying off people, should the government also be cutting and reducing the workforce? What should these workers do? Its not like they chose old unneeded jobs: unemployment has been pretty even across industries.

As you know, this policy of belt-tightening is called austerity and the countries trying it aren't doing so great either. http://en.wikipedia.org/wiki/Austerity

Perhaps the government should act as a countercyclical balance to the private sector? When the private sector is irresponsible, takes too much risk and blows up, who is there to clean up the mess? The government can't just declare bankruptcy and start over. Perhaps we can view the government as a safety net, giving people jobs when the private sector fails to put them to work? Perhaps we can think of ways to make a robust and diverse private sector instead of one dominated by giant multinational risk-taking, non-competitive lobbyist machines that push risk onto the public and privatize the profits. That's what I want to see... a well regulated market with a diversity of companies trying to get ahead and a government overseeing it without playing favorites. Difficult. Maybe impossible. But that's where I want to go.

[jerf]

"Perhaps the government should act as a countercyclical balance to the private sector?"

Perhaps it should. The question is academic in all the bad senses, because while people love to cite Keynesian theories about how government should behave as if it's some sort of proved theory that admits no debate (itself a false statement, it was considered essentially disproved until suddenly it told the government what it wanted to hear and got itself revived; I fully expect it to be considered disproved again until it ends up convenient again), they fail to look out in the world and notice just how thoroughly our government is not acting Keynesian anyhow. The whole Keynesian multiplier argument falls apart if the government appropriates a dollar and then generates $0.30 of wealth with it, instead of >$1.00.

I'm well aware of the Keynesian argument. What I've noticed is that even by Keynesianism, if the goverment proves incapable of generating a multiplier Keynesianism itself says the government should spend less.

Having a pretty economic theory does not remove your responsibility to look out into the world and see if it actually describes reality. In reality, what the government is doing is not Keynesian stimulus.... it's just spending money.

Austerity countries are taking their hit now. Non-austerity countries are taking it later, and will take it bigger as a result.

[brc]

One day you will realise that printing money does not increase wealth. Sure, it increases all sorts of economic indexes but nobody gets richer because more bits of paper are circulating around. It takes a while for the effect to take root, but sure as apples, take root it will.

Austerity programs are taking the medicine after the party. Printing money and borrowing more is hair of the dog. Guess which person ends up with the biggest hangover?

[gjm11]

> it implies an unbounded amount of money funneled into research

Er, no; it's complaining about a 20% cut in research. How does that imply unbounded money?

> the amount of money it would take to bankrupt the supporting country

The budget that's just been hacked at -- the DOE's science funding, which according to the article provides most of the US's funding for basic scientific research -- is about $5B. The US federal budget is somewhere north of $3T. It is not the science spending that is going to "bankrupt the supporting country".

> There isn't a government expenditure that can't be supported the exact same way and with virtually the same arguments

That would be fair comment if the proposal were a blanket 20% cut across all government spending. But of course it isn't. The proposed cuts are in fact about $100B, or about 3% of the federal budget. So the question isn't "should basic scientific research be exempt from cutbacks when the country's finances are in trouble?" but "should basic science suffer 7x greater cutbacks than government spending as a whole?".

(Actually, I bet these cutbacks aren't the whole story and there are other reductions going on that aren't covered by this list. So, who knows?, maybe the proposed cuts to basic science are only, say, at a 3x greater rate than the overall government spending reduction. That doesn't change the point I'm making.)

[brc]

A pertinent question to the author (who, quite rightly, seems to be quite emotive at the issue) : if you don't want your colleages to lose their jobs, at which other government dept should the jobs go? Some say defense, might be a good idea, but to say - oh those 1 million defense jobs, they're not as valuable as my 1 million scientists jobs. It's an impossible calculation to make. It's just as heartbreaking for every family where the jobs go missing, no matter where they are employed. I would also ask if this person has shrugged of hearing of several million jobs in constructions, or banking, or wherever, have been lost. Uncomfortable as it might be for government employees, they are totally dependent on the real economy for their jobs. If that real economy isn't firing, then they too, must inevitably feel the effect.

It's quite understandable for people to react strongly, but the target of the outrage is always the person making the cuts, not the person who squandered the money away in the first place.

I am hopeful, however, that some time in the future if a lot of skilled people are released into the jobs market that something new and exciting arises as a result. That's no consolation for a department facing the axe, of course, But surely some of them have a hot new idea that hasn't been pursued because of the stupidity in leaving a well-paid job to chase a dream. Perhaps now someone will chase that hot idea they've had for a decade and change all of our lives forever. I admit it's a long shot, but you've got to hope for something.

[dnautics]

>In the real world, there's a bound on the amount of money that should be funneled into research. That bound should probably less than the amount of money it would take to bankrupt the supporting country

More to the point, it should realistically take into account the real capabilities of the scientific community at large. If president Obama decided tomorrow, "hey, we're going to sink $10T into creating warp drive by the end of the decade": how many charlatans do you think would start scurrying toward the money? How many legitimate physicsts would shrug their shoulders knowing they'd just lost out on their collider grants and cobble together proposals for a piece of their action, scientific integrity be damned? How many startup companies would be formed as R&D rent-seekers to develop "next-gen metallurgy and materials science for the project"? And do you think that we would really have warp drive at the outset of 10 years?

Why is it so hard to consider that maybe, just maybe, we are already overinvested in science now, just as we would be if we sunk $10T into warp drive today? All the hallmarks are there. Record levels of fraud (see retractionwatch if you want your soul to sink a bit), severe PhD employment pipeline problems...

[nhebb]

At some point the answer has to be no.

Unless it's someone's sacred cow. Then the answer is moo.

This story is overblown at this point. The Senate will come up with it's version. The reconciled bill and the resulting votes will be the critical issue. The bottom line is that it will be painful to someone. Social services and research will have to take some hits, as will defense per President Obama's budget proposal.