A Dose of Hard, Cold, Economic Reality - International Cooperation is Essential

Scott G. Beach · 2004-08-31 17:45:13

Many of the people who post messages in this forum subscribe to the proposition that the colonization of Mars should be accomplished by private initiative rather than by a government program. I agree with this preference for private initiative but I have nevertheless proposed an international, government funded program to explore and settle Mars. (See http://www.geocities.com/scott956282743 … ngmars.htm )

In the 1600s a group of Pilgrims booked passage to the New World. They signed a "Compact" and thereby organized themselves into a "Civil Body Politic." Then they boarded a ship named The Mayflower. Those Pilgrims paid their own way to the New World. Unfortunately, would-be Martian settlers cannot do the same today. Establishing a 100-person settlement on Mars would cost in excess of $100 billion, and that cost is very, very far beyond the financial capacity of your average would-be Martian.

Some people want the United States of America to underwrite the exploration and settlement of Mars. Unfortunately, the U.S.A. is more than $44 trillion in debt. Every economist on this planet knows that the U.S.A. is technically bankrupt but 99 percent of those economists will not say so in public. They know that the U.S.A. will default on its debts, as the Soviet Union did in the 1990s and as Argentina did a couple of years ago. They know that the default will precipitate a worldwide depression.

Policy makers around the world know that the United States is moving inexorably into the winter phase of the Kondratieff economic cycle but they will not say so publicly. They know that if they publicly acknowledged this economic reality it would trigger the panic selling of stocks and bonds and a frantic rush to exchange Federal Reserve Notes for real money, gold and silver. So, in order to keep this CON game going a little longer, policy makers and their lap-dog economists will tell you that we are just in an economic "soft patch" and that things will improve soon. They will tell you this knowing that it is much more likely that the empire of the U.S dollar will IMPLODE soon.

Given these hard, cold, economic realities, I have proposed a Mars exploration and settlement plan that could bring the nations of this world together. I believe that international cooperation is an absolutely essential prerequisite to mustering the financial resources needed to explore and settle Mars.

P.S. If you want to survive the winter phase of this Kondratieff cycle, exchange your Federal Reserve Notes for gold and silver now, while you still can.

Cobra Commander · 2004-09-01 04:59:44

There's a fatal flaw in your reasoning. You object to the possibility of an American colonization effort based on the economic instability of the US dollar and the coming decline which I'm inclined to agree on, hence a global effort. Yet the US economy accounts for roughly one third of total world GDP and as you yourself state, US economic collapse will bring with it worldwide economic depression. In which case no one can fund a settlement effort, not the US, not a private entity and not an international community. Mars is off the table.

The reasons you state to justify your proposal are among the very reasons that render it unworkable.

SpaceNut · 2004-09-01 06:51:46

In a failed economic system Items of value such as the precious metal with have value only when considered against the barter trade from others since curency will be of little or no value when that has occurred. There are other items that will also hold there value, Land for farming and food production, fuels -coal, wood, oil, gas and so on. Each will have an economic meaning based on the surounding area to which you live an the hardship to which the individual is to face.

Scott G. Beach · 2004-09-01 08:47:34

Cobra,

You wrote, "The reasons you state to justify your proposal are among the very reasons that render it unworkable."

I agree that the impending collapse of the U.S. dollar and the resulting worldwide economic depression will, in the near term, greatly impede efforts to explore and settle Mars. However, I am looking past that depression to the year 2010. At that future point in time, there should be enough of an economic recovery underway for the nations of Earth to once again set their sights on Mars.

Cobra Commander · 2004-09-01 09:18:03

At that future point in time, there should be enough of an economic recovery underway for the nations of Earth to once again set their sights on Mars.

In which case presumably the US would be able to undertake the project alone. It could even aid in recovery, a space age version of a massive public works program.

SpaceNut · 2004-09-01 10:33:13

Sort of like the job corps of the depression that help cut many a highway accross this nation as well as the trials though the mountains for viewing spectaclular views from the top of the world as it were.

Scott G. Beach · 2004-09-01 11:31:47

Cobra:

You wrote, "In which case presumably the US would be able to undertake the project alone. It could even aid in recovery, a space age version of a massive public works program."

The Kondratieff economic cycle is driven primarily by demographic changes. By 2010 the world will have recovered from the financial dislocations caused by the default of the United States on its debts. However, that alone will not return the U.S. economy to a healthy condition. The U.S. will still have to deal with the retirement costs of the post World War II "Baby Boom" generation. Social Security and Medicare costs will be increasing and these burdens are likely to keep the U.S. economy in the doldrums until at least 2020. I therefore believe that getting the Mars movement back on the track after 2010 will require international cooperation and financing.

Cobra Commander · 2004-09-01 11:49:17

After a global depression it will not only be the US which has to recover. 2010 seems a bit optimistic for Martian settlement at any rate, but if we factor in an economic collapse it's totally unworkable. Somehow I find it highly improbable that the nations of the world, after emerging from an economic depression and still shaking off the effects, will band together and spend billions to settle Mars. By the time it could realistically be contemplated by anyone it would likely achievable by the US alone.

Also, if we assume a severe economic depression on the horizon there are many possibilities that could play out. It's possible that should such events occur that the Medicare and retirement burden post-depression could be quite low. If things get bad enough, certain demographics will begin decreasing through starvation, illness and violence. And much of the population is less equipped to deal with such conditions than Americans were last time around.

C M Edwards · 2004-09-01 13:44:03

How can the Mars Society take advantage of this situation? (Besides cashing in our savings bonds...)

Mundaka · 2004-09-11 23:42:28

Dook · 2004-09-12 09:24:29

The US national debt is $7 trillion, NOT $44 trillion. I am very concerned about this and I have written both of my congressional leaders about it as well but the US will not default on it's debt.

In my letter to congress I proposed a 3% increase in federal income taxes along with a 5 cent increase in cigarettes and another 5 cent increase for both liquor and gasoline. All of this money would go toward the national debt. Also I proposed small reductions in spending for the military and the adoption of an efficiency program. If congress were to adopt these measures the budget would be balanced and we could begin paying down the debt. It would take 20 years to pay it all off but we would finally be done with it. I don't expect any action by congress on this issue because the public is not showing any concern. It's hardly mentioned in the current debate.

Even though, the sky is not falling.

Grypd · 2004-09-12 10:54:33

The willingness the American people have to pay for any increases in the cost of Gas is small. With the recent rise in Oil prises it has started a lot of discontent. Anyway both parties have been using the term Tax cut a lot so I think the American debt is here to stay

Morris · 2004-09-12 11:44:56

The US national debt is $7 trillion, NOT $44 trillion. I am very concerned about this and I have written both of my congressional leaders about it as well but the US will not default on it's debt.
In my letter to congress I proposed a 3% increase in federal income taxes along with a 5 cent increase in cigarettes and another 5 cent increase in gasoline. All of this money would go toward the national debt. Also I proposed small reductions in spending for the military and the adoption of an efficiency program. If congress were to adopt these measures the budget would be balanced and we could begin paying down the debt. It would take 20 years to pay it all off but we would finally be done with it. I don't expect any action by congress on this issue because the public is not showing any concern. It's hardly mentioned in the current debate.
Even though, the sky is not falling.

Thanks for this very interesting post. However, the real economic problem is deeper than you portray. The reason is that you have included only the federal debt. Additional tax increases are needed simply to maintain basic services at the city, county, and state levels.

Political fantasists (most of both major US political parties) like to talk about reducing taxes at the federal level while paying little or no attention to the consequences at the state and local level. In many cases, this results not in the elimination of taxes but in the transfer of the tax burden from an organizational structure which is more capable of managing the problem to a multitude of smaller organizations, many of which either do not have the resources, are severely legally constrained (e.g. states which have laws requiring a balanced budget), or are manifestly incompetent to manage at the level required.

Scott G. Beach · 2004-09-12 13:31:12

Dook:

The figure of $44 trillion comes from an article that was published about 16 months ago by CNN. See the following excerpts.
_

Many economists worry that the U.S. federal budget deficit could approach a record $500 billion this year. Few, however, have grasped that the fiscal problems facing the United States could make an itty bitty $500 billion deficit look like pocket change.

Try $44.2 trillion on for size. That's the total "fiscal imbalance" figure Jagadeesh Gokhale, an economist with the Cleveland Federal Reserve and the American Enterprise Institute (AEI), and Kent Smetters, an economist at the Wharton School of the University of Pennsylvania, calculated in a recent, unpublished study about new methods of federal budget accounting.

What the number represents is the difference between all the government's future obligations -- mostly Medicare and Social Security payouts, which will explode when Baby Boomers start retiring in large numbers -- and its future revenue.
_

And see http://specials.ft.com/spdocs/WP-Fiscal … etters.pdf
_

Morris:

You are correct about the Federal Government transferring financial burdens to state and local governments. I wonder if this process could ultimately cause the dissolution of the United States. The Soviet Union sunk into debt and then dissolved. The U.S. could follow that same path.

Grypd · 2004-09-12 14:58:28

Well though the United States national debt is 7 trillion this is still bad as it started in the 5 trillions at the end of the 90s but at that increase of 2 trillion in just 4 years it kind of is worriesome.

Gennaro · 2004-09-12 17:46:13

Indeed, when the depression strikes, Mars will be off the table for decades worldwide. What will happen to the Chinese export oriented economy as US demand plummets to 1930's levels? The answer is obvious.

On the other hand, implosive crisis to the capitalist system of this sort can spark unexpected political developments. This has happened before and with a redrawing of the political and ideological map, who knows, space expansion might just happen to be placed in the forefront of governmental goals.

smurf975 · 2004-09-12 22:45:35

From what I hear the USA debt is pretty ok when compared with European countries or Japan. And those countries with the US face the same problems with a huge generation ready for retirement in a few years.

However the US has one advantage its population is still growing, which could help for paying the future debts. Unlike Europe and Japan which has a population getting older and older and hardly any fresh blood.

So perhaps technically the US is still in better shape then most other developed nations. However it could still hit a depression. However at this moment of time the only way that I see that happening in the short term (I'm not an economist) is by a terrorist attack of the same scale of 9/11.

About oil. I think if certain people really wanted the oil price could be much lower. And perhaps it will be in the future when finally the russian pipelines start working.

Also I think putting more burdens on local authorities is better. For an average American person in a highly populated and rich state there may not be a lot of change but it would make some states more attractive for investments that would have gone in foreign plants. And with this system if a state has bad budget it will not pull down the whole country like now a bad federal budget would do.

Gennaro · 2004-09-12 23:28:53

However the US has one advantage its population is still growing, which could help for paying the future debts. Unlike Europe and Japan which has a population getting older and older and hardly any fresh blood.

It's probably a combination of society being so complicated and demanding that people don't even consider children until they're over 30 and all the evils of feminism which causes nice guys to shy away from the mating market alltogether (or becoming unsuccesful in it) while still representing the best potential providers. In the age of housewives it used to be the male got a deal out of marriage and children, being able to count on support and relaxation at the home front, not anymore (although that doesn't exactly cover Japan where women are not yet deluded to the bone). Furtermore, when both parents are obliged to work in order to maintain a minimum standard of living, who's there to provide for the children?
Anyhow, I think it's largelly a question of social structures, which could be remedied by other policies and ideas. By the way, I've heard American demographics aren't that great looking either.

About oil. I think if certain people really wanted the oil price could be much lower. And perhaps it will be in the future when finally the russian pipelines start working.

Or it could be they don't want to since peek oil is looming.

Also I think putting more burdens on local authorities is better. For an average American person in a highly populated and rich state there may not be a lot of change but it would make some states more attractive for investments that would have gone in foreign plants. And with this system if a state has bad budget it will not pull down the whole country like now a bad federal budget would do.

The point is when you put more burdens on local authorities you miss the benefits of rational centralization, co-ordination and specialization, making several bodies all trying to do the same thing on their own that don't interact very well or haven't the resources to handle the same obligations.

smurf975 · 2004-09-13 00:59:54

Also I think putting more burdens on local authorities is better. For an average American person in a highly populated and rich state there may not be a lot of change but it would make some states more attractive for investments that would have gone in foreign plants. And with this system if a state has bad budget it will not pull down the whole country like now a bad federal budget would do.
The point is when you put more burdens on local authorities you miss the benefits of rational centralization, co-ordination and specialization, making several bodies all trying to do the same thing on their own that don't interact very well or haven't the resources to handle the same obligations.

This argument would then also be true for why multinationals are better then small/mid sized companies and your mom and pop's / one man business.

Which in reality doesn't hold true as small / mid size companies tend to be as good or even better as multinationals.

I believe that the burdens of "rational centralization" are bigger then its benefits

Gennaro · 2004-09-13 04:47:13

This argument would then also be true for why multinationals are better then small/mid sized companies and your mom and pop's / one man business.
Which in reality doesn't hold true as small / mid size companies tend to be as good or even better as multinationals.

There's an important difference. Multinationals seek to maximise profits by allocating production to where the price of labour is the lowest, thereby reducing real wages worldwide through the "iron law" of LaSalle.
Government institutions and services on the other hand function basically as socialist re-distributors of wealth. Companies pay for services, for instance energy or communications, and the fee is transfered into consumer purchasing power.

I believe that the burdens of "rational centralization" are bigger then its benefits

You're being too simplistic since not all branches of economical activity are equal. To illustrate the point of decentralising governmental expenditure for example, think of a railroad that spans many localities. Now say we decentralised it with every small county operating its own section of rail instead of devising a single time-table for the entire stretch as well as forcing each locality to pay for rolling stock and maintenance to the best of their ability. Some localities would be so rich they'll squander surplus resources on nonsense while others wouldn't even be capable of keeping the tracks in order. Essentially, this is introducing inefficiency and waste into the system.
As for privatization there are several branches of economical/administrative activity of a similar nature such as energy, hospitals, communications, roads, education, defense and spaceprograms. These are all activities characterized by high capital investment and small profit margins, or even negative profit margins, but which are still essential for the community and private business to function. Indeed, the more lavish services they can provide (provided of course the means are wisely spent) the more private enterprise, like mom and pop's applepie bakery, will benefit from them.

Socialism and capitalism must balance each other in order to achieve maximum utility and harmony.

Lastly, as was already pointed out, the habit of pushing responsibility for federal services downwards to the local level is in reality most often just a short-sighted excuse for getting rid of state expenditure. This is true all over the world, not just in the United States.

Morris · 2004-09-13 09:37:21

Morris:
You are correct about the Federal Government transferring financial burdens to state and local governments. I wonder if this process could ultimately cause the dissolution of the United States. The Soviet Union sunk into debt and then dissolved. The U.S. could follow that same path.

Well, it's very hard to predict potentially chaotic results in complex systems, but I tend to think not. Despite all it's difficulties and complications the US still has the capacity to adjust quickly when there is a sense that there is a real threat to basic institutions.

And, we had all better hope not, because, as has been indicated elsewhere, the effects of a worldwide depression at this point would make the 30's look like a minor market fluctuation.

Scott G. Beach · 2004-09-13 14:11:00

DISASTER WARNING!!!
_

Speeches ignore impending U.S. debt disaster:
No mention of fiscal gap estimated as high as $72 trillion

by Carolyn Lochhead, San Francisco Chronicle, Washington Bureau

Sunday, September 12, 2004

Washington -- The first of the 77 million-strong Baby Boom generation will begin to retire in just four years. The economic consequences of this fact -- as scary as they are foreseeable -- are all but ignored by President Bush and

Democratic challenger John Kerry, who discuss just about everything but the biggest fiscal challenge of modern times.
____

If you dare, read the full text of this article at

http://www.sfgate.com/cgi-bin/article.c … ...intable

C M Edwards · 2004-09-13 15:12:30

It's probably a combination of society being so complicated and demanding that people don't even consider children until they're over 30 and all the evils of feminism which causes nice guys to shy away from the mating market alltogether (or becoming unsuccesful in it) while still representing the best potential providers. In the age of housewives it used to be the male got a deal out of marriage and children, being able to count on support and relaxation at the home front, not anymore (although that doesn't exactly cover Japan where women are not yet deluded to the bone).

So, male chauvinism is the answer to female chauvinism? :sleep: Not very original.

Furtermore, when both parents are obliged to work in order to maintain a minimum standard of living, who's there to provide for the children?

You're correct. IMHO, this is a symptom of the single greatest economic strain on the modern world. We tried to trade a lifestyle whose cost was high in terms of labor for one whose cost was high in terms of money, and ended up increasing the cost in both. Particularly here in the States. Labor saving devices serve no purpose if every time one saves you an hour you immediately fit some other task into it. The modern world must simplify its lifestyle or perish.

smurf975 · 2004-09-13 15:35:57

Furtermore, when both parents are obliged to work in order to maintain a minimum standard of living, who's there to provide for the children?
You're correct. IMHO, this is a symptom of the single greatest economic strain on the modern world. We tried to trade a lifestyle whose cost was high in terms of labor for one whose cost was high in terms of money, and ended up increasing the cost in both. Particularly here in the States. Labor saving devices serve no purpose if every time one saves you an hour you immediately fit some other task into it. The modern world must simplify its lifestyle or perish.

Well there is nothing wrong with a parent (be it man or woman) staying at home and taking care of the child. That is until the child is old enough for school and that parent can start working part-time.

However I think its the materialisme and consumption society that forces both partners to work full time as they want all of the latest of the useless goodies.

smurf975 · 2004-09-13 16:43:53

This argument would then also be true for why multinationals are better then
small/mid sized companies and your mom and pop's / one man business.
Which in reality doesn't hold true as small / mid size companies tend to be as good or even better as multinationals.
There's an important difference. Multinationals seek to maximise profits by allocating production to where the price of
labour is the lowest, thereby reducing real wages worldwide through the "iron law" of LaSalle.
Government institutions and services on the other hand function basically as socialist re-distributors of wealth. Companies
pay for services, for instance energy or communications, and the fee is transfered into consumer purchasing power.

Well a breakthrough in robotics and AI can possibly establish also the loss of local labour force. However being

multinationals with paper headquaters in the Bahamas. The rumour is that multinationals aren't that big tax payers at the

end. However perhaps stockholders of those multinationals are.

I believe that the burdens of "rational centralization" are bigger then its benefits

You're being too simplistic since not all branches of economical activity are equal. To illustrate the point of
decentralising governmental expenditure for example, think of a railroad that spans many localities. Now say we decentralised
it with every small county operating its own section of rail instead of devising a single time-table for the entire stretch
as well as forcing each locality to pay for rolling stock and maintenance to the best of their ability. Some localities would
be so rich they'll squander surplus resources on nonsense while others wouldn't even be capable of keeping the tracks in
order. Essentially, this is introducing inefficiency and waste into the system.

I think you are assuming a lot here. Saying because a state is rich it will waste money is not correct. I agree with your

points about infrastructure spending however not because local states will make a mess of it but more you need national

transportation ways. Another point is just because local states have more power it doesn't mean they don't have to work with

each other.

However richer states need a better developed infrastructure then poorer states. Their is no point in building expensive

infrastructures in areas where they are not used and just because that state belongs to the same country. An example would be

should all rural areas have access (garanteed by the federal government) to high bandwith communications (Internet) or

something good enough? And if so why should I pay for it? Why not just develop new technologies that would make it possible

without government help.

I think that you will gain a lot of flexibility with a more local way of government.

As for privatization there are several branches of economical/administrative activity of a similar nature such as
energy, hospitals, communications, roads, education, defense and spaceprograms. These are all activities characterized by
high capital investment and small profit margins, or even negative profit margins, but which are still essential for the
community and private business to function. Indeed, the more lavish services they can provide (provided of course the means
are wisely spent) the more private enterprise, like mom and pop's applepie bakery, will benefit from them.

I can see national roads (and other big infrastructure projects "Hooverdam"), defence and spaceprograms being paid for by a

federal funds or with aid of federal funds.

However energy, hospitals and education should and can be handled by local governments. But for instance with energy the

energy producing companies would be hooked up to a national grid and could sell their excess energy on it or handle power

failures of a local energy provider. Again just because its local doesn't mean you don't work together with other states.

I for one don't believe that education is really only based on the size of your budget but more on the quality. For example

if your school doesn't have money for the lastest Dell computers with Windows XP, does this mean you should forget about

having an IT department? Heck no, you can teach IT just as good on a 20 year PC. Not that I think there will occur worse

situations then there are now, just that the lastest and greatest stuff is not that imporant for a primary and highschool.

But agian now local states can decide them selfs how much they will spend on education and what kind of education and I don't

believe it will be a doom for the educational system as European countries have managed fine with their local education

budgets.

Socialism and capitalism must balance each other in order to achieve maximum utility and harmony.

You can have your style of government in your state. If the only way of doing business was by being big/huge then you would

only see those kind of companies. While at this moment you see all kinds of companies making profits with content employees

and actually being something good for society. So big government is not a garantee for success as the Soviet Union has

proven.

Lastly, as was already pointed out, the habit of pushing responsibility for federal services downwards to the local
level is in reality most often just a short-sighted excuse for getting rid of state expenditure. This is true all over the
world, not just in the United States.

Yes I agree that putting more burden on local government while not lowering federal taxes at the same time ,is actually just

a tax increase! But thats not what I want. I want less federal spending and let the local government decide how they will

spend their local budgets which have increased without increasing taxes.
---

Would you (as I saw that you are from Europe) want that everything is managed from Brussels or perhaps decide somewhat your

selfs (like now) how you will spend your budgets?

My ideas is basically like how the European Union works at this moment. However with a stronger European Defence Force and

big projects such as a space program or one off infrastructure expensis (such as the Euro Tunnel or the high speed trains).

However every other project must be paid by local governments which can apply for European help of funding. And further also

help for developing underdeveloped regions of countries

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Re: A Dose of Hard, Cold, Economic Reality - International Cooperation is Essential

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