Thursday, June 13, 2013

A Penny for NASA

A Penny for NASA

        In these days of budget cuts and financial sequesters, there are many Congressman in Washington who are eying the National Aeronautics and Space Agency with some critical questions on their minds.  “What about here?” they say to themselves.  “We have our troops overseas, hungry kids living in poverty, and laid off workers with unemployment compensations expiring, their long extended allotted time coming to a close”.  We ourselves may ask, “Is this where our money should go?  With the bailouts and the deficits, can we get a little back on our taxes from here?”
      Unfortunately, NASA is a tempting target, especially when the alternatives are the care of the poor, the defense of the country, and a huge national debt.  So should we reduce NASA’s budget to, maybe… a penny for every dollar the federal government collects?  Some surprising news for many tax payers is that, according to the Congressional Budget office, in fiscal year 2013 NASA will get 0.48 % of the national budget or less than half a penny to the Dollar.[1]  NASA has rarely received more than 1% of the national expenditures.[2]  Even in the depths of the space race, the highest NASA ever received was in 1966 at 4.4%.  That was before the costly escalation in Vietnam and President Johnson’s ‘Great Society’ which created the welfare system we have today. The current half a penny on the dollar works out to be almost $18 billion, which admittedly still sounds like a lot of money. Where does all that expenditure go to? Research?  Technically no, it doesn’t go to science, or technology, or even into some government waste black hole.  Money can’t go to any things or any ideas, but money ALWAYS goes to people.
      Since I’ve mentioned the 60’s I will give you an example referencing that time period.  When Jane Jetson buys a Spacely-Sprocket, she is obviously paying the store which has previously purchased the sprocket.  The store in turn pays the store’s owner an amount anywhere from above 50% of the price of the sprocket to 0% depending on the size and type of the store. (They may sell Jane a Spacely-Sprocket at cost but they know she will need a Kosmos-Cog and they know they can sell her that at a hefty profit).  The rest of the money goes to the sprocket maker, the people who deliver the sprocket, the employees who stock it on the shelves, the company that supplies electricity to the store, and etc.  Spacely-Sprocket in turn, pays his owner, Mr. Spacely, as well as his suppliers and employees, like George, with the price he gets for his product.  The money eventually goes to pay the man who digs the materials out of the ground (Fred?) in order for the sprocket to be made.  This is basic economics and whether it’s in the future, the past, or the present, money ONLY goes to people. If money doesn’t go to people, then it just sits waiting for somebody to use it. The real important question about the ‘products’ we get from NASA is who is the money going to and what exactly are WE getting for it?
      Let’s first talk about income brackets:
  • The working poor live from paycheck to paycheck; so their money goes to rent, food, and basic, inexpensive necessities that they will find at their local Wal-Mart. Their money may stay within their own bracket with the purchase of second hand goods, but most likely it goes up the bracket or out of the country.  Jesse Jackson called this ‘percolating up’, but more and more of it is also ‘seeping out’ to the international market.
  • The lower middle class may have a little savings, and some investments.  They may or may not own their own home. They have easier access to food and necessities – some of which are not so necessary; and they have access to some basic services like fast food restaurants or the occasional lodging. Most of their money goes up the bracket, some stays in their bracket, a little ‘trickles’ down. Here the seepage continues and increases with more expensive foreign goods such as inexpensive electronics and textiles.
  • The upper middle class most likely owns their own home and has savings and a retirement ‘nest-egg’ with some side investments.  Their food becomes more exotic and their restaurants will be nicer and visited more frequently, as will their lodgings.  Their service requirements will be greater with things like lawn care, child care, and personal care. An occasional trip outside of the country is not uncommon.  They look for higher quality ‘necessities’ but usually find those domestically.
  • The wealthy, with very few exceptions, own at least one home, with a home possibly out of the country. Their retirement is assured.  Most of their assets ARE investments of one type or another.  Food is necessary for entertainment purposes; and their major expenditures are for services. Their ‘necessities’ are high-end and may tend to be international in scope.
      Setting aside outside contracts, NASA chiefly employs Engineers, Scientist, Technicians, and Bureaucrats; these are all members of the upper middle class, making an average salary of $81,000 a year.[3]  Some of the support staff may fall in the lower middle class bracket early in their career.  Why is this important? In the upper-middle income bracket, money stays circulated longer, it stays within the country longer, and it is more ‘productive’.   Their outside contracts tend to go to corporations that also employ at the upper middle class level, traditional (but recently challenged) examples are Lockheed Martin and Boeing.
      Financial Investments, primarily made by the wealthy, tie-up the circulation of money, slowing down its ‘trickle’ affects.  Within a budget bloated economy this is actually OK to a degree, it reduces inflationary pressures, yields large amount of capital for taxation (albeit at a reduced rate), and 90% to 97% of the funds eventually become available to circulation in the form of loans, the remainder stays in place as a ‘liquid asset’ (See Reserve Ratio Table [4]) The upper middleclass investment choices tend to go to more solid investments like homes, small businesses and corporate stocks in the form of retirement plans.  This flow of money goes directly back into circulation and is usually productive.  The upper-middle class ‘labors’ for their money and typically spends it on someone who is also laboring for their money. Through laboring, money is considered productive; examples of non-productive money would be handouts to the poor, capital returns and interest income.  NASA employees highly educated people applying their education to develop products that are new and innovative, which means that not only do they produce, but they also create new products for future production.
      As a side benefit, the average NASA employee is a brain trust for the country. Sadly, due to the loss of the shuttle program and the sluggish economy, many of these employees are currently still looking for work,[5] but NASA employees typically retire early and graduate on to high end, technical and innovated corporations within the U.S.  An investment in a NASA employee can be considered a wise investment in the country’s future businesses. Through NASA, tax payers are investing in some of the smartest and most promising people in the country.
     It’s clear who our money is going to, but the real conversation among experts is how much are we getting from our money being placed in NASA.  As explained, the employee’s of NASA are a benefit to us, but the US tax payer gets additional value for his or her money in other ways according to many space program advocates, including NASA itself.
     NASA has been touting their Return on Investment (ROI) and justifying their expenditures for decades with a yearly publication called “Spinoff”.  What kind of returns has NASA given us?  The 2012 Spinoff publication spells out everything from Aerospace composite materials to the zenith of water treatment systems.   We have the obvious gifts from NASA: Weather and communication satellites, GPS and all the scientific and Landsat data and mapping information we currently use.  Some other, less obvious product developments are remote medical monitoring, digital photography and the integrated circuit board.[6]  Then there is the more obscure inventions from Lasik surgery to algae based baby formula. [7] 
     But NASA is not the only one who speaks of ROI.  Dr. Neal DeGrasse Tyson, Director of the New York Planetarium and frequent Host of the PBS series “NOVA” was once asked "What has humanity gained from the billions of dollars that NASA has spent?" He responded, "…it took me a whole book to address that question thoroughly."[8] The organization Penny4NASA is a nonprofit organization whose objective is to double NASA’s share of the budget to the level it hasn’t seen since 1993, one penny on the Dollar.[9]  (A closer look at the numbers shows the actual amount of money given to NASA today in 2007 dollars is about the same as it was in 1993.)  They claim NASA has a ROI of anywhere from 8:1 to 14:1 depending on the time frame.[10]  In contrast, John P Millis, also a proponent of NASA believes those numbers are far too high, but he insists that NASA’s ROI at least breaks even.  He claims the modern day cell phone, the laptop, even the internet would not be as advanced today or possibly not even exist if it wasn’t for the space race.[11]  According to John Kelly, the space agency is required by law to disseminate the technology it acquires to the public and as of 2003, 1300 technology spinoffs have reached the market.[12] 
     The fact is the ROI of NASA is elusive. The return-on-investment ratio is the return divided by the cost of the investment; the cost of the investment for the space program is available for everybody to see in the federal budget, therefore the return portion of the ratio must be the debatable issue.  There are probably a very small percentage of corporations in the US whose products, or a major portion of them, wouldn’t exist at all if it weren’t for NASA.   Yet, it is difficult to ascertain how many less visible, supporting products do we have today because of NASA and its development of materials, electronics, dietary supplements, or medical monitoring techniques.  The Numerator in the equation is too ambiguous, so the very definition of return is subject to personal interpretations.  Those viewpoints are separated by distances, circumstances and even time.  What is important to you, today, is in many ways very different than what was important to your grandfather when he was your age; and what is important to him will be different than what will be important to your granddaughter when she reaches your age.  For example, the Light Emitting Diode or LED, with some manifestations an invention of NASA, had little impact on your grandfather’s life, but will most likely be the only source of artificial light for your granddaughter.
     “The precise return is hard to measure,” says John Kelly, “though it has pushed the boundaries of both knowledge and technology.”[13]  Satellites and the Internet are hard to quantify and currently there is a host of experiments taking place on the International Space Station (ISS) that could yield gains from pharmaceuticals to materials. Presently the brand new industry of 3D printing is curtailed to separate, non-moving parts, but with the recent announcement of a 3D printer going to the ISS, microgravity could eliminate that limitation.
     To say “The real returns are just around the corner”, may seem like a cliché, but NASA is on the cusp of a new paradigm.  This statement is not referring to the experiments on the ISS however, nor to a future mission to Mars or to the moon or even in reference to President Obama’s Asteroid mission.  All of those would be very exciting; and they would probably develop a whole new round of ROIs for NASA. Quietly, this new era actually started when a capsule with the title of ‘Dragon’ docked to the International Space Station last year and unloaded its cargo.  For the first time in history, a spaceship delivering its cargo was not a product of a government agency and neither were its design, components or assembly; instead the shipment was from a private company, using their own spacecraft. On January 18, 2006 NASA announced the formation of the Commercial Orbital Transportation Services or COTS, an agency designed to develop private space launching services.  NASA is currently paying out some of its limited funds to private companies like SPACEX to help them develop their systems and then deliver cargo – and eventually astronauts – to the orbiting Research Center.
     There are other investments being made into the private rocket sector. NASA’s sounding rocket missions, which call for short flights not requiring orbital input, are now paying out from their budget to other private, rocket companies, like Virgin Galactic and XCOR.  They will take experiments from NASA on those short duration flights, as well as passengers.  On January 16th of this year, NASA announced that they would pay BIGELOW Aerospace $18 million dollars for an experimental expandable module to add to the ISS in 2015.[14] 
     NASA today, is paying private industries to deliver their goods in much the same way as the US postal service did with the burgeoning Aeronautics industry early in the twentieth century.  Government resources from NASA are being contributed in the same manner as they were when the railroad industry was developed to connect the country in the 19th century.  The return on Investment in both of those historical comparisons is incalculable and nebulous, but our country would not be what it is today without those early investments.
      Return on Investments can have very intangible benefits. What is the ROI on the time you spend with your kids?  How many years do you personally gain from your exercise regiment, or eating habits?  What is the ROI for a kind word to someone or some coins in a salvation army bucket?   Returns on Investments can not always been quantified, sometimes they can not even be seen, but that doesn’t mean they are not there. 
      Some Return on Investments’ are too vast to comprehend.  What was the Return on Investment for Queen Isabella’s contribution to Christopher Columbus? What about the return value from the Pilgrim’s friendship with Squanto?  Some investment returns are simply incalculable.
      It can be difficult to pin down the ROI of NASA because it is not a business with a profit margin. Henry R. Hertzfeld wrote, “no one measure is a comprehensive indicator of NASA’s impacts and benefits."[15] This ambiguity may change very soon though with the COTS program.
      With the development of private industry in the space sector, an ROI should be much clearer for the public to evaluate.  Bigelow, Spacex and Boeing are contracting each other – NOT a space agency - to develop a private space station for commercial and international use. Planetary Resources and Deep Space Industries announced their intention to mine asteroids first for ice and hydro-minerals, a source of drinking water, fuel and oxygen for orbiting facilities, then later they intend to mine rare minerals including gold and platinum.  Space tourism had begun years ago with the Russians ‘selling’ trips to the ISS for approximately $30 million. Sarah Brightman is scheduled in 2014 to be the seventh paying visitor to the ISS.[16]  There is even talk of human habitations in the caves of the moon and Mars.[17]  In short a whole new industry is starting, and the ROI of NASA may very well be more grand and incomprehensible as the ROI of the golden spike that connected the two coast of the United States.
      It might be worth your penny.

[1] “Fiscal Year 2013 Budget Estimates”, NASA, NASA Newsroom, n.d., WEB, Retrieved 13 February 2013. ( 
[2] Braadstat, Richard, “Putting NASA's Budget in Perspective”,  Richard Braadstat, n.p, n.d., WEB, Retrieved  22 June 2013,
[3] database of figures posted anonymously, “Glassdoor”, Glassdoor, Inc., 12 June  2013,  Web,           Retrieved 12 June 2013, (
[4] “Board of Govenors of Federal Reserve System”,  US Federal Reserve,  n.p., 10 June 2013, WEB, Retrieved 22 June 2013,
[5] Schneider, Mike “Former NASA Workers Struggle To Find Work A Year After Program's End”, Huff Post Business, Huffington post, 15 July 2012, Retreived 11 June 13, (
 [6] Kelly, John “What high tech products came from NASA technology?” How Stuff works, Discovery Company, n.d. Web. 6 June 2013,
[7] Coleman, Danial with Reiny Sampson and John Jones, “Spinoff 2012”, NASA, NASA Center for Aerospace Information, 2012, PDF, Retrieved 6 June, 2013
 [8] Folger, Jean “The ROI of Space Exploration”, Investopedia, ValueClick, Inc.  29 August  2012, Web, Retreived 6 June 2013, (, Referring to Mr. Tyson's book "2012 Space Chronicles: Facing the Ultimate Frontier" in the article
[9] “The Spirit of Apollo” Penny4Nasa, Advocates for Space Exploration, n.d., Web, Retrieved 10 June 2013
[10] Zeller, John “The Spirit of Apollo” Penny4Nasa, Advocates for Space Exploration,
3 June 2013, Web, Retrieved 10 June 2013, (
[11] Millis, John P Ph.D, “Is NASA really worth the Cost?”, Space and Astronomy,, 1 February 2011,WEB, Retrieved 6 June 2013,
[12] Beith, Malcolm. "The Profit Mission,", The Newsweek/Daily Beast Company LLC, 2 March 2003, WEB, Retrieved 22 June 2013,
[13] Kelly, John “What high tech products came from NASA technology?” How Stuff works, Discovery Company, n.d. Web. 6 June 2013.
[14] Perrotto, Trent J. “NASA To Test Bigelow Expandable Module On Space Station”, NASA, NASA Newsroom,16 June 2013  Rertrieved 22 June 2013, 
[15]  Chamberlain, Ken “Measuring the NASA Stimulus”, National Journal, Atlantic Media Company, 27 August 2010, Web, Retrieved 22 June 22, 2013,
[16] Garcia, Jennifer with Marisa Laudadio, Raha Lewis, Aili Nahas, Kevin O’Donnell, Simon Perry and Monica Rizzo, “Celebrity Space Race”,  People, 29 October 2012, Vol. 78, Issue 18, p26.  MasterFILE Premier, WEB, 22 June 2013
[17]   Zimmerman, Robert. “Exploring caves on other worlds”, Sky and Telescope, April 2013, 18-24

1 comment:

  1. Amazing insight on the possible outcome of a new, increased NASA budget. Very well done!
    The analysis of "class-income" that you provide is not only well explained, it is also at the same time simple and complete.
    I particularly appreciate your definition and analysis of ROI and the examples you offer to sustain your thesis.
    Well crafted paragraphs like this one, enhance the overall quality of the article:

    "Return on Investments can have very intangible benefits. What is the ROI on the time you spend with your kids? How many years do you personally gain from your exercise regiment, or eating habits? What is the ROI for a kind word to someone or some coins in a salvation army bucket? Returns on Investments can not always been quantified, sometimes they can not even be seen, but that doesn’t mean they are not there."

    And you are right: "Some Return on Investments are too vast to comprehend."