The Bank of England could have put a man on the moon

I note from the Spectator’s website that George Osborne is investing money in Britain’s own innovative space project, Skylon. Then it struck me that the £60m he’s put behind it is hardly enormous on the scale of Government spending.

Last year I tried to calculate what the Bank of England could have bought with the £375bn it has spent on government bonds through its quantitative easing programme, so this Skylon investment prompted me to work out what, in terms of space exploration, the Bank could have funded, through QE, had it been allowed to spend the money on whatever it wanted.

It turns out it could have easily put a man on the moon. The entire Apollo project of the ‘60s and ‘70s is estimated to have cost between $115bn and $200bn (£75bn-131bn).

Even if one took the upper price there, that would mean the Bank would still have had enough to fund the equivalent of a British NASA (current annual budget $17.8bn) all the way through to 2033, which should help fund putting a man on Mars.

Or, as I pointed out last time I did this exercise, the Royal Mint could simply have minted £375bn in penny coins and put them on top of each other. They would reach 57m kilometres high, which is far enough to reach Mars on one of its closer orbits to the Earth.

Instead, the Bank has spent that money on boring old gilts. But fear not – at least it stands a chance of being able to sell them off again in the future (or at least that’s the plan).

All the same, this reductio ad absurdum illustration at least helps explain why the Bank seems increasingly reluctant to spill out more electronically printed money on quantitative easing: those zeroes obscure the staggering size of this economic programme.