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Friday, May 03, 2013

Lamar Smith on Commercial Crew Rides To/From Space Station

When NASA announced they would be spending $424,000,000 on Russian rides to the International Space Station in 2017, we contacted Lamar Smith, the Chairman of the Science and Technology Committee in the House of Representatives. Now, understand that we have a number of disagreements with Smith on other issues, but a staffer called today to confirm that Smith is in complete agreement with us on paying for these rides to American commercial companies and not to the Russians. He indicated the possibility that NASA itself could conduct the missions, but we pointed out that commercial companies could do the job cheaper and he agreed with that assessment.

Briefly, here's what we discussed:

  • Money we spend in Russia does not circulate within the US. If the government spent the same amount of money within the USA, it would be multiplied through the money multiplier effect. In effect, the $424 million is spent in Russia, while the same amount of money spent in the USA may have a total economic effect of several times, perhaps more than a billion dollars in total.

  • Elon Musk of SpaceX is targetting late 2015 for human Commercial Crew flights. This is two years before NASA's 2017 target (which they are now penciling in as 2018 on their internal reports—which means they are budgeting even more half-billion-dollar paychecks for the Russians!). Although there's no guarantee SpaceX will reach their target date, there's enough slack in the schedule that suggests that paying Russia for 2017 is a bad bet on the part of NASA.

  • When you consider that money spent in the USA is subject to income tax, some of that money the government spends in the USA will come back to the government in terms of tax revenue, further reducing the overall cost.

Bottom line: Spending the same amount in the USA could end up greatly reducing the amount of government money spent for the same services we are paying the Russians for. Economically, it just makes sense.

It's nice when a politician is actually working for the proper course forward.