Paul Plays Politics with Physics

February 8th, 2011 at 3:32 pm | 57 Comments |

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Sen. Rand Paul has proposed eliminating the Department of Energy. Other Republicans are pressing for significant cuts to the agency’s budget. This push has included little discussion — or evident comprehension — of what it would do to American capabilities in physics, or why that matters.

Paul would transfer DOE’s nuclear weapons activities to the Pentagon (which is probably a bad idea as it would eliminate the deliberate redundancy of having two agencies safeguarding the stockpile). Moreover, he dismisses DOE in a Wall Street Journal op-ed thus: “Many of its other activities amount to nothing more than corporate handouts,” such as subsidies for companies developing cleaner energy.

But much of what DOE does has nothing to do with either weapons work or corporate handouts. The agency spends billions on basic research aimed at understanding the physical world. Such research yields vast benefits in generating new technologies and powering the economy. But its large-scale, long-term nature places it beyond the scope of any company; if the government doesn’t do it, no one will.

Consider DOE’s program in High Energy Physics (a term roughly synonymous with “particle physics,” as many particles occur only in high-energy conditions such as in a particle accelerator). It aims at elucidating the basic structure of matter, the early moments of the universe, the nature of cosmic rays that hit Earth from distant areas of space, and related topics.

Expensive? Yes. The High Energy Physics program is currently running at about $800 million annually. Arcane? Sure. But such research has brought a raft of practical applications too. Developing superconducting magnets for particle accelerators helped give rise to medical technologies such as MRI machines, for example. And, importantly, the opportunity to work on cutting-edge physics has been a draw for developing and retaining scientific and technological talent in the U.S.

That program, which would have no future under Sen. Paul’s proposal, is already under budget pressure. For years, its flagship machine has been the Tevatron, a nearly 4-mile-long circular accelerator at DOE’s Fermi National Laboratory in Illinois. Last month, Fermilab announced that a planned three-year extension of the Tevatron’s operations has been cancelled for budget reasons. As of September, the machine will stop operating.

There are other ambitious activities planned at Fermilab, including Project X, a linear accelerator slated to go online in 2019. But such research will require funding and a degree of budgetary stability. The latter has been lacking in U.S. particle physics since the 1993 cancelation of the Superconducting Super Collider, a huge project that ended up as nothing but a hole in the ground in Texas.

If the U.S. stalls in high energy physics, other nations will surely pull ahead, reaping the field’s technological and workforce benefits. Last month, as the Tevatron extension was going by the wayside, Europe’s CERN physics lab announced plans to ramp up activities at its Large Hadron Collider, the world’s most powerful accelerator.

If budget-cutters such as Rand Paul want to slash American physics, they should at least show some understanding of what would be lost.

Recent Posts by Kenneth Silber

57 Comments so far ↓

  • TerryF98

    Science, who needs it? Technological endeavor, why? New groundbreaking ideas and innovation. Throw it all away not required.

    In Paul’s brave new world of 1864 who needs any of this.

  • Saladdin

    Science? Please, we don’t need no stinking science. We believe in God and Creationism. If it ain’t in the Bible, then it don’t exist. Simple as that.

  • midcon

    Further, slashing any budgets related to fundamental research would erode research opportunities for students who need to perf0rm such work in order to attain the knowledge and maturity that makes them world class scientists. You can’t espouse spending more on science and engineering without providing the care and feeding necessary that is outside of the classroom.

    Rand obviously shows no knowledge whatsoever of DOE. And one primary reason the nukes are in DOE vice DoD, is that DoD does not want them because stockpile stewarship would do nothing but drain DoD’s budget. There is also philosophy that says the civilians should retain control of nuclear technology. And finally, is partly a defense agency anyways. Rands proposal would do nothing more than shift organizational and budgetary responsibility to DoD vice DOE. Where’s the savings in that?

  • ktward

    Rand might be bathing in the bliss of his ignorance, but the rest of us are feeling the pain of it.

    I suspect this only heralds the start of his attempts to dismantle our Federal gov., dept by dept. Did we expect any different?

  • antron

    Medical Certification Boards, who needs them!

  • Unsympathetic

    I’m just glad Kentucky voted for this class act. Can’t wait to hear about the people whose eyes he’s ruined because of his lack of competancy at any skill set.

  • JimBob

    Have you heard about anyones eyes he’s ruined?? Of course not you hack.

    Yes, we should get rid of the Department energy

    • drdredel

      It all boils down to this quote…
      MIT’s Thomas Lee, Ben Ball Jr., and Richard Tabors likewise observed in Energy Aftermath that “the experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed; and if a technology is not commercially viable, no amount of government support will make it so”

      If you agree with this statement then frum is wrong and Paul is right.

      My understanding is quite the opposite, however. The government is behind much of the most important shit we have including the semiconductor and the internet.

  • lessadoabouteverything

    “Medical Certification Boards, who needs them!” Not Rand, he created his own certification board. He is such an obvious freakshow I am sure the people in Kentucky are going to start to wonder what the hell kind of nut did they elect.

    • JimBob

      “Paul said he helped formed the rival group because the established organization exempted older ophthalmologists from recertification. He likened it to members of Congress passing laws that don’t apply to themselves.”

      Rand Paul is still licensed to practice medicine in the state of Kentucky.

  • Non-Contributor

    double douche bag.

  • lessadoabouteverything

    “the experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed; and if a technology is not commercially viable, no amount of government support will make it so”

    That is just outright idiocy. What is there in Astronomy that is commercially viable? Of course without it we would still be throwing rocks at the moon. Commercially viable? What small, petty minds to think in such ways.

  • balconesfault

    Only about 5% of the scientific community in America self-identifies as Republicans.

    There’s a reason for this.

    • JimBob

      One of your dumber statements. I suspect that scientist that get research grants from the government vote for Democrats. In the private sector where profits matter scientist vote Republican. You have to remember, in the old Soviet Union 100 percent of scientific research was funded by the state. And we all know how well that turned out don’t we.

  • Bebe99

    Perhaps someone can explain it to Paul in a way that he can understand–in the form of a bumper sticker: “Science-it’s where nuclear weapons come from.”


    Sorry, but even though I am strongly pro-science and pro-technology, I’m with Paul on this.

    The federal government has no constitutional mandate to take billions of dollars from taxpayers and then give them to physicists to play with expensive toys.

    Here’s the key sentence in the article:

    If the U.S. stalls in high energy physics, other nations will surely pull ahead, reaping the field’s technological and workforce benefits.

    What benefits, exactly, other than those accruing to the workforce doing the research itself?

    • balconesfault

      What benefits, exactly

      To start with, that “workforce” itself is a major benefit. The job market in America ebbs and flows due to economic conditions … the fact that there are a lot of researchers across the country working on Government funded programs ensures some level of continuous funding that plays no small part in ensuring that we have a vibrant, research-oriented scientific community in America.

      • jerseychix

        There’s a new study out that I heard about on NPR that talked about the percentage of the economy that has come from physics research since the Cold War. It’s around 35%. So, if you are wondering who benefits, the answer would be YOU.

        I have a good friend whose husband studies string theory at a major state university. One of the things the DOE supports is his teaching grants. Teaching college kids physics is a worthwhile endeavor and worthy of taxpayer support.

        But I suppose Paul thinks physics stopped with optics. When can I stop sending my tax money to these anti science states??

    • valkayec

      What benefits, exactly, other than those accruing to the workforce doing the research itself?

      How do we know what benefits will accrue to the nation, businesses, and general workforce if we continue the research? Ir might be spectacular as previous physics research has been. Or to be just a bit factitious, maybe you’d like to hand all the new physics R&D over to China and India as the DOE supports a great deal of university and private scientific and physics research? For example, a couple of physics researchers at a TX university a couple of years ago announced a spectacular way to achieve nuclear energy that would be far less dangerous and leave almost no waste. I can’t find the article now. It was in Wired Science or Fast Company, I believe. But imagine what that research could do to transform our energy needs.

      Are you willing to give up those kinds of research advances?

      • valkayec

        I found the article. Here’s an excerpt:

        [blockquote][i]Physicists at the University of Texas have invented the Compact Fusion Neutron Source (CFNS), which is a clever system that mixes of two types of nuclear power reactors. The older fission reactor we’re all familiar with (which generate lots of dangerously radioactive waste) and a tokamak fusion reactor (where small atoms are fused together much more cleanly).

        The CFNS will eat up so-called nuclear “sludge,” which is a dangerous, highly toxic, long-lived radioactive by-product of existing nuclear power stations. The sludge is formed into a jacket around the core fusion reactor. The CFNS spits out neutrons and heat which “burn” the sludge, releasing more energy as heat–which is used to generate more electricity–and reducing the sludge into less dangerous material. And the Super X Divertor makes it possible for the compound reactor to produce lots of neutrons and heat without destroying itself.[/i][/blockquote]

        Where did the money come from for this research? Try the DOE.

  • midcon

    There are apparently a lot of folks who do not understand the the difference between basic and applied research. Applied research is designed to solve practical problems, rather than to aqcquire knowledge for knowledge’s sake. One might say that the goal of the applied scientist is to improve the human condition .

    Basic research (aka fundamental or pure ) research is driven by curiosity or interest in a scientific question. The main motivation is to expand man’s knowledge , not to create or invent something. There is no obvious commercial value to the discoveries that result from basic research.

    Posting on this forum is a product of both basic and applied research and I assure everyone without government investment and sponsorship you would not be posting here today. Both the WWW and the Internet were a result of a government need, not a commercial application.

    Most of the world’s technology originates in government facilities or is sponsored by government funding. Those who think otherwise, including Rand, are uninformed.

    The DOE operates the largest complex of scientific laboratories in the world. In Rand’s view DOE is about nuclear weapons. He has some learning to do. Some day he will find out that without DOE there would be no radioisotopes or nuclear medicine.

    One of the major failures of the right is to classify things as to their commercial value as it relates to business. Another failure is the relegation of science to the voodoo toy box. It’s scary and mysterious and if you touch it you might catch something. Can you imagine a Manhattan project under today’s Republicans? Or going to the moon or teflon or geez…countless things. We would still be in the industrial age maybe.

  • Non-Contributor


    (a minor edit)

    There are apparently a lot of folks who do not understand the the difference between their ass and a hole in the ground. Rand Paul is the president and CEO of the board that certifies holes.

  • rbottoms

    >> What benefits, exactly, other than those accruing to the workforce doing the research itself?

    The GOP is really bringing Teh Stupid full force this year.


  • NRA Liberal

    Way to eat the seed corn, baggers.

    This country is doomed.

  • JeninCT

    If Rand Paul ranting about the DOE sparks a discussion about its purpose, then it’s served a purpose.


    “The GOP is really bringing Teh Stupid full force this year.”

    Does that mean you can’t answer the question? That might say something about your own intelligence; balconesfault and midcon did a pretty good job.

    To them I say that I understand that there have been some benefits to national-level research. But they do need to be measured in the context of what they cost, and whether or not mandating them with taxpayer payments is constitutional. If there’s a specific national interest then perhaps that could be laid out and budgeted as part of whatever branch of government deals with that interest.

    • drdredel


      As I said above… not counting all the other things mentioned, just the internet and the microprocessor are worth any and all dollars that have been invested.
      As for constitutionality, I think this is a huge stretch on your part (no offense). The government is charged with doing what it can to further our national interests. There is a wide (and reasonable) area of debate about what said interests are, however, in this regard, it’s pretty clear! There’s nothing inherently different between us and, say, Mexico. But they have NOT invested in making sure their populace strives towards inventing and refining technology that can be used in all sorts of ways, but ultimately makes the nation wealthy (and healthy). They are primarily a nation of physical laborers.
      The constitution certainly doesn’t prohibit the government from investing in whatever it deems worthwhile to empower our nation. Obviously if this particular investment bore no obvious fruit, you’d have a point (as would Paul). But the fruit are so plentiful and so obvious, and the assertion that without these investments they would have come about anyway so specious, that there really isn’t much to talk about here.

  • Rossg

    Rand Paul: a 6-year embarrassment for Kentucky, made worse by the fact that, as a US Senator, he represents the nation much more than does a US Representative. The man thinks it is okay for him to be his own judge and jury for medical certification. He thinks it is okay if federal facilities cannot discriminate based on race, but private facilities are entitled to do so, so as to maintain their freedom to choose. He thinks that aid to Israel is a flat out waste of money. Now he tells us that all the federal investment in research up to now has been a total waste. Give us examples, sir!

    In Senator Paul’s simple-minded world, there are no rich people, middle-class people or poor people; we are all inter-related; we all either buy from rich people or we sell to rich people. (See:

    Everything is better done at the state level, so says the good Senator. Starve the federal government and we all pay less in taxes. Never mind that what the federal government does not provide, individual state governments must then provide. Does he, and others like him, just believe that these services come for free? It is incredible that at least 2 out of 3 Kentucky voters approved of him for the US Senate.


    “Now he tells us that all the federal investment in research up to now has been a total waste.”

    Where did he say that?

    • Rossg

      Apparently the good Senator has said: “Many of its other activities amount to nothing more than corporate handouts,”. Of course this could mean that various of the DOE efforts have been good, but he doesn’t think it is worthy of any further investment. Based on what I have thus far heard coming out of his mouth, he has a very low opinion of all federal activities and/or expenditures, other than things like defense and border control. Most everything else that might seem to bind this nation together is just up to 50 rules.

  • forkboy1965

    Funny how the GOP loves to discuss and promote American Exceptionalism and yet it was very much the Federal government which brought about American Exceptionalism. The space race. The Interstate system. Advances in damn near every scientific field over decades.

    And now, just as they throw Exceptionalism around like it’s a new religion, they want to do away with the very basic of research which helped blaze the trails of American Exceptionalism.

    Rand Paul is, like so many of the modern Republican Party, is a fool.

  • Rob_654

    Science? We don’t need this – God will tell us all we need to know – its all in the Bible – the world is only 6000 years old, men and women suddenly appeared out of nowhere, and the Rapture is coming any day – why worry about that silly science stuff…

    • Rossg

      I guess you know, too, that Kentucky hopes to soon have its own, full-scale Noah’s Ark theme park. This to go along with the creation museum, where dinosaurs happily tromp around with humans.

    • balconesfault

      You mean … Aqua Buddha will tell us all we need to know!

      Pass the bong, man …

  • TJ Parker

    Goodness, is this podiatrist the smartest person that the people of Arkansas could find?

    • Gramps

      Good one, TJ…

      My best intel is, he’s a ophthalmologist and he’s from Kaintuck…!

      • JimBob

        Gramps, time to cut your SS and Medicare. You’ve been sucking off the government long enough.

        • Gramps

          That ain’t fair…
          I’m still werkin’…consulting, phone, email, high speed broadband…
          Granted not 65 hours per week, any more…but I’m gonna be 73 and you have to keep both mentally and physically active…

          OK, OK… I’ll give yah some “stripes”… JimBob!

          When is the last time you’ve gone “walkies’ with yer good olde dog…
          Not for his or her health…for yours…?

          Given’ SWMBO [She Who Must Be Obeyed]… a hug and kiss is still the very best…

          Stop checkin’ out the young chic’s at the office…
          You’ll only get in trouble…

          Hey trooper…been there… done that…
          Take a lesson from dah olde, man…!

          Lessons learned…!

  • Gramps

    By golly gee…it would appear the Tea Party Republican’s in the House have met Rep. David Kucinich (D-Ohio) halfway…?

    [blockquote] ” Ohio Democratic Rep. Dennis Kucinich, who voted against the measure in 2001, released a statement Monday calling Tuesday’s House vote “the tea party’s first test.”

    “The 112th Congress began with a historic reading of the U.S. Constitution,” Kucinich said. “Will anyone subscribe to the First and Fourth Amendments tomorrow when the PATRIOT Act is up for a vote? I am hopeful that members of the Tea Party who came to Congress to defend the Constitution will join me in challenging the reauthorization.”

    “The House measure, which was sponsored by Rep. Jim Sensenbrenner (R-Wis.) and required a two-thirds majority for passage, failed on a 277-to-148 vote. Twenty-six Republicans voted with 122 Democrats to oppose the measure, while 67 Democrats voted with 210 Republicans to back it. Ten members did not vote.” [/blockquote]

    Good one Dave…Hehehe…!

  • larry

    “I never meant to say that Conservatives are generally stupid. I meant to say that stupid people are generally Conservatives. I believe that this is so obviously and universally admitted a principle, that I hardly think any gentleman will deny it.” John Stuart Mill

  • rmholt

    Paul is seeking continuation of the kintupS moment

  • KBKY

    @larry, rmholt, TerryF98, Saladdin, etc.
    Let’s all take a step back and remember that this isn’t just a cut for a cuts sake, we have a huge deficit and something needs to go. Will it be cuts to Medicare? Cuts to education? Cuts to Medicaid? This isn’t a choice between cutting the DOE (or suspending an $800 million dollar a year program) and doing nothing, this is a choice between cutting or trimming the DOE or cutting another important program or investment. None of these cuts are going to be fun, none are going to be easy, and everyone would prefer that they were not necessary. I respect Senator Paul for at least coming out with an actual, if unpopular, cut beyond earmarks and “inefficiency” and I don’t think that the fact that he suggested it makes him “anti-science”.

    • lessadoabouteverything

      He might not be anti-science (remember anyone who mocked faith to the extent of going through a phony ritual of bowing to aqua Buddha is not likely to be anti-science) but it is insanely ideological the notion that the only science that is worthy must be commercially viable, and the idea that we are somehow so “poor” as to not be able to afford basic scientific research is flat out nuts. We are the most wealthy society on earth that also has one of the lowest basic tax rates. An argument can be made to reform Social Security (people are living longer and the model is not sustainable) or Medicare (does a 94 year old woman really need expensive chemo to live, at most, a few weeks or months when there are inner city children who lack any health care?)

      Paul is motivated by ideology only and I have no reservations calling his ideology crackpot (not Conservatism, Libertarianism)


    Do you consider adherence to the Constitution to be “insanely ideological”?

    Serious question. Because that is what he is doing here.

    Lots of people pay lip service to following the Constitution. The Pauls are among the few who walk the walk.

    It’s perfectly valid to claim that you don’t agree with this decision, but the attempts to portray the Pauls as crazy because of doing what they swore an oath to do — it’s a bit much.

    • balconesfault

      He is adhering to an interpretation of the Constitution that is archane and, frankly, destined to make America less competitive and to lower our cumulative standard of living over time.

      Yes, one can attack things like funding education or research as outside the bounds of providing for the common welfare – but let’s be honest, if you do so, you should also be challenging head on the idea that we need to maintain military bases around the world, missile interceptor systems to protect Europe or Saudi Arabia or Israel, or a nuclear presence far far larger than anything needed to deterring attacks on the US, as part of the “common defense”.

      As I replied to someone yesterday who was challenging the need to collect income taxes greater than the levels in 1910 – our national defense expenditures in 1910 would translate to about 8 billion a year in 2010 d0llars.

      If Paul wants to start talking about a 10 or even 100 billion Department of Defense, I’ll take him seriously. Right now he’s a caricature. At least I’ve heard his father putting himself on the line to attack the need for a American global military presence. Let’s see the younger do so.

  • KBKY

    Are we so “poor” as to not be able to afford basic science? No, but are we in enough of a bind that a politician shouldn’t be ostracized and attacked for suggested that an $800 million dollar a year program (and the agency that sponsors it) might need to be on the chopping block? Yes. I’m not necessarily in favor of cutting the Department of Energy, but I think that we should look at new ideas and, given polling data surrounding cuts to Medicare, Social Security, and Medicaid, it is unlikely that politicians are going to consider serious changes to those areas.

    I could definitely hear the argument that we should raise taxes to cover the DOE (although I may not agree), but it should be noted that we need to cut something and I don’t think that any area should be considered sacred or untouchable.

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  • sinz54

    It would be simple to preserve the R&D parts of the DoE’s budget, by transferring them to DARPA or the National Science Foundation.

    But that’s a sliver of the DoE’s total budget.

  • lessadoabouteverything

    kbky, I have no objections to what you are saying, but Paul (at least his father) was calling for the abolition of the DOE when Clinton was President and we had budget surpluses.

    I am not rejecting any cuts or increases out of hand, lets discuss every issue rationally, what I am rejecting is his ideological framework that he is using to justify his cuts. A person can make an argument in favor for Single Payer health care, they can do this many ways: point out how efficient it is in Taiwan and how little they spend per capita with better outcomes…and we can discuss it rationally, you can reject it as being unfeasible or impractical, but we can discuss it.
    But if someone were to argue for Single Payer because they believed it was the necessary first step towards a Socialistic paradise are you really going to take that person seriously?

    Yes, crackpots should be ostracized. Sadly though the voters of Kentucky chose to elect this crackpot. It is not the individual things he says, it is his overall ideology I reject as extreme.

  • KBKY

    Rand Paul has been open about the need to make big cuts to defense ( While I don’t agree with him about how much federal funding we should eliminate, I think it’s important that someone is starting these conversations and being open that we may need to change our thinking about what can and can’t be cut.

    I agree that a lot Paul’s policy suggestions are ideological (most people’s are), but I think that he does have pretty extensive justifications behind the ideology. These justifications don’t play well as soundbites (as he learned with the disastrous civil rights comment), but they exist. I also am not quite sure what you mean by ideological framework. Are you arguing that you are more against the liberatarian ideology than any particular cut? Thus, it’s not the cut of the Dept. of Energy that is the problem, it is the fact that the suggestion is coming from the libertarian viewpoint that the federal government should have almost no role in society? I could understand that, as it could create a precedent for cutting other important agencies, but I still think that his ideas should be considered. Just because they come from a libertarian doesn’t mean that an idea doesn’t have other, non-libertarian justifications. (Apologies if I was incorrect in my interpretation of your argument.)

  • lessadoabouteverything

    kbky, no, you are right. Although you must admit abolishing the DOE is not exactly a cut as much as it is a wholesale hack. Arguing for some targeted cuts in the DOE is fine, getting rid of the DOE is simply idiotic. Yes, lets keep buying from Middle Eastern Sheiks who funnel money to jihadists who want to kill us, lets not have any agency that can develop and promote other forms of energy…after all we all know nuclear energy was invented in someones garage, right, it didn’t take collecting some of the greatest minds in the west and making some kind of kooky government project, why not call it Manhattan, to come up with figuring it out?

    And I am not saying don’t consider ideas (but this idea is just flat out stupid), but take into account the source. I find it revealing that a flat out stupid idea (get rid of the DOE in a Century where energy issues are make or break for humanity) comes from a flat out jackass.

  • KBKY

    Agreed that abolishing the DOE goes far beyond a simple cut. To be fair, however, the DOE has little to do with energy policy and researching additional forms of energy. According to the National Journal “DOE has very little to do with energy policy—or energy spending. Of the department’s annual budget, about $26 billion to $28 billion in fiscal 2010, only $2.2 billion went for clean-energy research. Just under $1 billion went to fossil-fuel programs, such as clean-coal research and maintaining the Strategic Petroleum Reserve.” (Full article here: Getting rid of the DOE thus does not mean that we have to abolish all energy research and may mean that we proceed with future research more efficiently.

    This doesn’t mean that I believe that we should abolish the DOE, but if all that comes out of this conversation is that everyone (myself included) better understands what this agency actually does, I’d count it as a success. While you may think that this particular idea is “flat out stupid”, I would argue that it has elements that we can use. At the very least, it prompts an interesting and important conversation, a conversation that will only become more relevant since Obama indicated that he intends to restructure the federal government.

  • lessadoabouteverything

    KBKY, again, completely agree with your take. What do you think of the plan to abolish Fannie Mae and Freddie Mac? (that is, to get the government out of the market)
    IIRC 2/3rd of mortgages are underwater, do we really want to kill one of the few agencies that will make loans to the middle class? Maybe we do since making such loans got us into the trouble in the first place.

  • KBKY

    Honestly, it shocks me how little I understand what exactly some agencies in our federal government do, although I believe that neither organization actually made loans, just purchased the mortgages from other lenders to free up cash for those lenders to then make more loans. According to this article (written in 2003, so it is both a little out of date but also probably less partisan because it isn’t trying to explain the crash):, the organizations have had some worrying issues for a while.

    I tend to lean towards the government not doing things as opposed to doing them, so that would incline me to support abolishing the agencies. However, there are a lot of factors that I’d like to look at first. For instance, it looks like they hold 9% of the default mortgages in the country, as well as pieces of at least 50% of all other home mortgages: what will happen to these mortgages? Do we want to focus on restructuring (Barney Frank’s preference) or outright elimination?

    These agencies have also evolved a great deal since they were initially created in the early 20th century: how much do they currently affect the housing market? Can the private sector accomplish these tasks just as well? Again, I tend to prefer the market for these types of issues; if a middle class family doesn’t have the assets or credit to justify a bank loan on its own, than I don’t like the idea of my tax dollars being spent to purchase them and thus encourage banks to make those loans without taking on the risk. I don’t feel confident enough in my understanding of these organizations, however, to give a hard opinion one way or the other.

  • midcon

    Perhaps the Fannie Mae and Freddie Mac question (not to mention the DOE question) should be framed in a different manner that relates to their mission. For example: Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets. They execute that mission by operating in the secondary mortgage market.

    So perhaps there are two questions. Should there an organization with the mission to provide liquiidity, stability and affordability to the U.S. housing and mortgage market? If the answer is yes, then a second question might be, What should the government’s involvement be in such an enterprise – oversight, regulation, control, or operation?

    To me, Mae seems to act similar to the Fed and the more similarity there is the more I am inclined to think that mission, while necessary could be performed by someone else. My opinion on the second question is that the government needs at a minimum regulate such an enterprise in a manner that conmensurate with the enterprises ability to adversely affect the market.

    Generally the secondary market has always seemed like an extra side bet on the risk of default for a loan or package of loans. I’m not convinced that does the nation a whole bunch of good.

  • quanta

    KBKY – the national journal’s characterization of the DOE is misleading (at least the quotes you put there). Of the $26 billion, yes $2 billion are invested in clean energy research, and $1 billion in fossil fuels. However, another $1 billion is spent on nuclear energy research, and another $5 billion is spent on basic science research (high energy physics, fusion energy, nuclear physics, etc.) that is relevant to energy. In total, then ~$9 billion is spent on energy-related research. The rest of the budget is primary national security items (~$10 billion), and environmental management (~$6 billion).

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