By Dave Anderson:
Right now the US government can borrow money for free in real terms (if anything the 5 and 7 year real yields are negative which means lenders are taking guaranteed real losses). Any project that has a positive, non-zero rate of return should be funded.
The Wunderground has one such high value project --- hurricane intensity forecasting improvements:
NHC director Bill Read stated in a interview this week that had Hurricane Irene come along before the recent improvements in track forecasting, hurricane warnings would have been issued for the entire Florida, Georgia, and South Carolina coasts. At an average cost of $1 million per mile of coast over-warned, this would have cost over $700 million. We can credit the investments made in hurricane research, improved satellites, and better computer models for the majority of this improvement. When we consider that government funding for hurricane research has averaged $20 million per year during much of the past two decades, the roughly $200 million spent on hurricane research over the past 20 years was paid back by over a factor of three during just one storm. According to a 2007 presentation at the 61st Interdepartmental Hurricane Conference, the improved hurricane forecasts between 2000 - 2006 resulted in savings of $3 billion compared to what the forecasts of the 1990s would have cost...
Progress in making better intensity forecasts of hurricanes, though, has lagged. Over the past twenty years, there has been virtually no improvement in forecasting how strong or weak a hurricane will grow. NHC predicted Irene would hit North Carolina as a Category 3 storm, but it hit at Category 1 strength. Had the intensity forecast been better, many evacuations that were done for Irene could have been avoided...
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