Moonshots Are Expensive

Another day, another moonshot. People refer to a “moonshot” as a precedent for solving complex, technologically important problems, the way that the Kennedy administration was able to land Americans on the Moon. A simple comparison shows that a “moonshot” is something that is invoked but not copied. 

Estimates vary somewhat, but the moonshot program cost (in today’s dollars) $260 billion over 12 years. At its peak the program took 4.4 percent of the Federal Budget (about $45 billion today). None of the proposed moonshots have anywhere near these funding levels. Any comparison of moonshot spending would also need to reflect that while the research “enterprise” is more efficient today (better tools, accumulated knowledge), the federal enterprise is not. Large, federally managed programs routinely run over budget and behind schedule. The only consolation may be that our chief competitor is even less efficient and suffers from rampant corruption.

Whatever problem a moonshot is supposed to solve will not be done on the cheap, and this means either reallocating spending away from the Department of Defense and federal social services, raising taxes, or increasing the federal debt. The backdrop for this is that up to $8 trillion spent from FY 2001 to FY 2022 to bring peace, democracy, and equality in the United States global war on terror was a major miscalculation. If the United States had spent that money on science, education, infrastructure, or military modernization, the country would be much stronger. The United States has serious deficits in all these areas. The wars in the Middle East started by the Bush administration count as one of the greatest strategic blunders in U.S. history. The Biden administration deserves immense credit for having the courage to pull the plug on these feckless and wasteful wars.

The bill from cashing in the “Peace Dividend” in the 1990s has come due. Congress cut Research and Development (R&D) funding for the hard sciences since the national security justification for spending ended with the collapse of the Soviet Union. While the private sector has become the source of innovation in the United States, it did not spend on the basic research that is the foundation of innovation. That comes from government funding. The decision to keep flatlining R&D (in terms of its share of national income) was, like the misadventures in the Middle East, another strategic blunder, and the spending of the last few years is best seen as remedying a 25-year shortfall.

Cashing the Peace Dividend was the right decision three decades ago, but the United States was slow to recognize that the era of stable, uncontested international relations ended in 2009 with Putin’s call in a speech at the Munich Security Conference for confrontation with the West. The arrival of Xi Jinping, determined to displace the United States, made this worse. Instead of reacting to new threats, the United States cut taxes and spent more in the Middle East. The result by 2020 was a world where a weakened United States was challenged by two powerful authoritarian states.

Rebuilding security requires spending, and not on new aircraft carriers. The clamor over the national debt does not take this into account. Any hopes that U.S. peace and security can be preserved by rhetoric alone, using emotional appeals on the merits of freedom and liberty, are harmful. Nor can the United States disengage from the world—it is too interconnected to make the savings from disengaging anything but temporary. While many European nations still do not pay their fair share on defense (something they now regret), it is in the United States’ interest to subsidize NATO. While mistakes in the Middle East and over R&D raise questions about the ability of the national security establishment to develop effective strategies (the United States has not won a war in more than 30 years, and then only if you count Serbia as a win) they do not raise questions about spending or debt.

Productivity (and quality of life) was damaged by a failure to reinvest in physical infrastructure (like bridges). Rebuilding infrastructure provides straightforward economic gain if it can be done efficiently. The inefficiency of U.S. spending—for example, the country is first in healthcare spending but 27th in health outcomes—is a deep-rooted problem that is not easily fixed. More efficient healthcare would be nice but will take years of rebuilding, and U.S. opponents are unlikely to wait. Calls to cut spending because of the debt often grow from the same ideological roots as isolationism, that small government and an inward-looking United States can ensure security in a growing conflict. But despite the Russian propaganda that has found a small audience on the Hill, if the United States disengages, opponents will come, and the country will end up spending even more. 

Concerns about the national debt are misplaced. A simple comparison is taking out a mortgage to buy a house. People go into debt with the expectation that they borrowed money. The debt they take on usually exceeds their income. No one sees this as unusual. They pay it back. National debt is not a perfect analogy, as individuals have a life cycle and must close out their 30-year mortgage, while countries can keep a running tab. Wars and moonshots, if they are to work, always entail increased debt. 

The United States has been living off the investments made in the twentieth century. If the United States is serious about moonshots and national security, taking on debt is the best way to remedy this deficit in the near term, while a long-term solution requires rebuilding the country’s grossly distorted tax system. This is a complex problem that would take a book to explain, but that book would come to the same conclusion. The United States has a strong economy and (despite congressional trepidations) unparalleled international credit that make it safe to borrow. This administration’s borrowing qualifies as an investment in rebuilding strength, and the mantra that should guide thinking on debt is don’t spend, don’t win.

James A. Lewis is a senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington, D.C.