Investments in space pay off

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Astronauts explore the mining of minerals on an asteroid.

Stephen Sandford is systems engineering director for Stinger Ghaffarian Technologies Inc., where he works on a range of space challenges, from asteroid utilization to space policy. He spent 28 years as an engineer and researcher at NASA.

The tax bill just passed by Congress and signed by President Donald Trump has big wishes attached to it. Supporters claim it will boost the economy by 5 percent a year. Most economists and nonpartisan tax groups put that rate closer to half a percent to a percent, while increasing annual deficits by $1 trillion over a decade.

While I’m no economist — I’m a space engineer — I can show a far more cost-effective way to ensure brisk growth for the nation’s economy, not just in the next decade but the next generation. We’ve tried it before, and it has exceeded nearly everyone’s expectations. Actually, it has been tried twice: once when Europeans settled the American frontier and again when, in a single decade, we put men on the moon and brought them back safely.

A new economic booster would combine the two ideas. It would settle a frontier, and it would entail an ambitious public-private program in outer space.

The most common arguments against a publicly funded space program are that we can’t afford it and that private industry, led by the likes of Elon Musk and Jeff Bezos, are handling space perfectly well on their own, thank you.

But let’s look at the last time we spent a significant portion of the federal budget on space — the 4 percent devoted to NASA during the Apollo program in the 1960s and early ‘70s.

Look at the American economy before, during and after Apollo, and you can see a correlation between economic growth and a robust aerospace program. During the 1950s, gross domestic product grew by 26 percent (from $2.27 trillion to $3.06 trillion in inflation-adjusted 2009 dollars, according tothe U.S. Bureau of Economic Analysis.) During the 1960s — the decade of Apollo — GDP grew by 35 percent ($3.08 trillion to $4.72 trillion). During the 1970s, GDP grew by 28 percent ($4.71 trillion to $6.5 trillion).

In other words, the American economy grew one-third faster during the Apollo decade than during the decades before and after.

Of course, no economist would say that the space program caused this growth. Still, the “knowledge ore” of science and technology generated by the Apollo program and NASA R&D continues to provide spinoffs today.

The total cost of Apollo in current dollars was $109 billion, or 0.2 percent of GDP, a slice equaling one-500th. Were the economic benefits worth that cost? You decide.

In addition to the direct economic benefits of a fully funded public space program, space exploration inspires young people to go into STEM fields (science, technology, engineering and mathematics), which are vital to innovation and long-term economic growth.

Annual cost of American education: $810 billion.

Approximate cost of STEM education: $400 billion.

Additional cost of expanding STEM expenditures by one-half: $200 billion.

Additional cost of expanding NASA’s budget by one-half: Only $10 billion.

Then there is space’s value in enhancing America’s international standing. Assuming that the value of something is what you are willing to pay for it, we can look at relative costs.

Annual federal expenditures on international affairs (the departments of State, Defense, Energy and Veterans Affairs): $800 billion.

Annual NASA budget: A mere $18 billion.

Finally, we can look at how much of an impact the public space program has on the overall federal budget.

Size of 2015 federal budget: $3.7 trillion.

NASA’s share of the federal budget: 0.4 percent.

Impact to the federal budget of fully funding NASA: An additional 0.3 percent.

Still, some people say the money would be better spent on feeding and housing the poor, or on medical research, or on non-space research and technology. In fact, the federal government spends far more on these programs already.

Annual federal housing assistance: $190 billion, according to the Center on Budget and Policy Priorities.

Annual budget of the Supplemental Nutrition Assistance Program (SNAP): $75 billion (same source).

National Institutes of Health budget: $31 billion, according to theNIH.

Federal R&D expenditures: $145 billion, according to theAmerican Association for the Advancement of Science.

Can we afford space? The numbers seem to show that we can; the impact of fully funding NASA to meet all of its congressionally mandated missions is minimal — almost undetectable in the federal budget.

All right, if space is such a good investment, why not leave it to private investors? Economist Mariana Mazzucato argues that publicly funded missions help turn economic uncertainty into calculable risk.

Ms. Mazzucato likes to describe the investment world as a landscape; a “bumpy and complex one,” as she puts it. Government’s job — when government is visionary and well run and not dogmatically following Keynesian or libertarian ideology — is to get out ahead and smooth the way.

NASA and other agencies invest in new mission-oriented technology “until fear-inducing uncertainty” gradually levels into “mere risk.” Economists argue about the difference between uncertainty and risk, but as an engineer and physicist, I like to use numbers to distinguish between the two. Risk has numbers. Uncertainty lacks them.

Take extraterrestrial mining, a future industry in which entrepreneurs will extract minerals from the Moon and asteroids. Astronomers have calculated the net worth of some single asteroids — the value of their contents minus the cost of retrieving them — to be in the billions of dollars. A great many highly intelligent, well-informed people are working up plans for the industry right now. The only problem is, the industry won’t exist for at least another two decades. Even five years requires a vast amount of patience for a venture capitalist. And VCs tend to invest at a relatively safe moment in the life cycle of a company, after a market exists and industry is defined.

Many startups face a dangerous time when they have burned through most of their capital and have not yet begun to earn significant income. Techies, economists and investors call this phase the Valley of Death. Most big investors wait for companies to get through the valley, proving their business models.

New industries have not even reached the Valley of Death. When the brilliant physicist Richard Feynman first conceived of the field of nanotechnology in the 1950s, for example, the term “nanotechnology” had not even been coined.

The nanotech industry now is getting off the ground, with nanomaterials a billionth of a meter thick being employed in sunscreens and carbon-fiber bicycle components, among other uses. But the industry remains in its infancy, and the far-out, science-fiction-worthy products — nanorobots repairing patients’ organs, clothing that can change color and shape — will require a lot of investment with unknowable financial risks.

That is why the U.S. government created the National Nanotechnology Initiative in 2001, with an investment totaling $21 billion through 2015 and continuing today. An effort combining universities, private companies and government agencies (including NASA), the initiative works to create a trove of knowledge ore and pass it to all players in the private sector, all while helping train a workforce skilled in the new industry.

Extraterrestrial mining and nanotech are two examples that speak to Ms. Mazzucato’s assertion that the government “often takes the lead, not only to fix markets but to create them.” She notes that it took venture capitalists 15 to 20 years to invest in biotechnology and the internet, after the fields had been launched with government support.

While economists express serious doubt about the ability of tax cuts to stimulate the economy without shackling the next generation with debt, a public investment in settling the frontier between Earth and Mars ultimately will see far higher returns at far less cost. Where’s the proof? Apollo: The last time we made a serious, sustained effort in space.

To fully fund NASA simply to meet the missions Congress already has mandated would cost an additional $12 billion to $13 billion a year. That relatively tiny investment would be enough to settle the frontier and cross the entrepreneurial Valley of Death.