How do space research agencies earn

Space Exploration

The FY2010 NASA budget is $18.7 billion. How much of that is devoted to "space exploration" is a matter of debate (approximately $5-$7 billion), since NASA's funding is divided into aeronautics, operations, science and cross-agency support.

(see the related NASA link)

Other agencies also spend money on space, notably the National Reconnaissance Office, Department of Defense, National Oceanic and Atmospheric Agency, and the US Geologic Survey, but that money comes out of their own budgets.

The total worldwide cost is roughly equal to $35 billion dollars, which includes advanced programs in Europe, Russia, China, India, and Japan. This does not include satellites (many commercial) that provide services from orbit.

NASA's budget for Fiscal Year 2010 equates to a little over one-half of one percent (0.53%) of the total U.S. federal budget of $3.1 Trillion. In comparison, at the height of the Apollo moon landing program in the mid-1960s, nearly four percent (4%) of the total U.S. federal budget went into that endeavor. Even if NASA's budget were to be doubled overnight to $37 billion dollars, it would only amount to 1.2% of today's federal budget.

$18.7 billion for NASA works out to about $60 dollars a year which breaks down to $5.00 a month, or $1.25 a week, or $0.18 cents a day out of the $4,000 to $8,000 in taxes the average American pays every April 15th. That's less than what someone would spend for a Cheeseburger or a Double Mocha Latte at your neighborhood coffee shop.

For those who question the size of NASA's operating budget, in 2009 the US budget is split as follows:

National Debt Payment: $10.2 trillion (580 times larger than NASA's budget)
Department of Defense: $515.4 billion (29.3 times larger than NASA's budget)
Global War on Terrorism: $189.3 billion (10.8 times larger than NASA's budget)
Health & Human Services: $68.5 billion (3.9 times larger than NASA's budget)
Department of Transportation: $63.4 billion (3.6 times larger than NASA's budget)
Department of Education: $59.2 billion (3.4 times larger than NASA's budget)
Department of Housing & Urban Development: $38.5 billion (2.2 times larger than NASA's budget)
Department of Energy: $25.0 billion (1.4 times larger than NASA's budget)

If the above numbers are unsettling, consider the following: in 2009, the U.S. Congress passed a "stimulus" package of $787 billion for the Banking, Mortgage and Automobile industries for one year. That same amount of money could operate NASA for the next 42 years.

According to a November 2003 report by Barna Research Group and the Baptist Press, Americans are spending -- in ONE year -- an average of:

$586.5 billion on gambling;
$80 billion on illegal drugs;
$58 billion on alcohol consumption;
$31 billion on tobacco products, and;
$250 billion on the medical treatment for the above related issues

Additionally, during 2003, Americans also collectively spent:

$224 billion to eat out;
$191 billion on personal water craft;
$67 billion on frozen dinners;
$25 billion on gardening;
$22.1 billion on hunting;
$21.3 billion on extravagant pet products, and;
$15 billion on junk food snacks

All things relative -- even in the financial meltdown and economic retrenching of 2008-2009 -- the cost for space exploration in the United States is neither a significant tap on social programs, nor a drain on the overall $3.1 Trillion Federal Budget or $14 Trillion U.S. economy.

Nevertheless, trying to estimate the economic value of the space program to the U.S. is surprisingly easy. A 1971 NASA study by the Midwest Research Institute concluded:

"The 25 billion in 1958 dollars spent on civilian space R & D during the 1958-1969 period has returned $52 billion through 1971 and will continue to produce pay-off through 1987, at which time the total pay off will have been $181 billion. The discounted rate of return for this investment will have been 33 percent."

This statement is plausible since those were the years when NASA's spending on the Apollo program was at its height, but NASA also invested in other programs and they are included in the mix, so the conclusion is not as definitive as one would like.

Also, a 33 percent return on investment is not really big enough to make the normal venture capitalist go wild -- but for a government program, however, a 33% ROI is quite respectable.

A short article in the prestigious British science journal, "Nature" (January 9, 1992, pgs. 105-106), reported:

"The economic benefits of NASA's programs are greater than generally realized. The main beneficiaries (the American public) may not even realize the source of their good fortune..."

Some other statistics:

Confirmation that "Space pays" may also be found in the 1989 Chapman Research report, which examined just 259 non-space applications of NASA technology during an eight year period from 1976-1984 and found more than:

- $21.6 billion in sales and benefits;
- 352,000 (mostly skilled) jobs created or saved;
- $355 million in federal corporate income taxes

Other benefits, not quantified in the study, include state corporate income taxes, individual personal income taxes (federal and state) paid by those 352,000 workers, and incalculable benefits resulting from lives saved and improved quality of life.

These 259 applications represent only 1% of an estimated 25,000 to 30,000 space program spinoffs. These benefits were in addition to benefits in the space industry itself and in addition to the ordinary multiplier effects of any government spending.

In 2002, the aerospace industry contributed more than $95 billion to U.S. economic activity, which included $23.5 billion in employee earnings, and employed 576,000 people -- a 16% increase in jobs from three years earlier (source: FAA, March 2004).

Our nation can afford whatever it values enough to pay for. All rose-colored glasses wishing aside, social welfare and other desirable programs have to win congressional support on their own merits; they will not necessarily be given NASA's $18.7 billion budget for FY2010 if the agency was completely terminated tomorrow.

For one final comparison, one can look to a report on NBC Nightly News (Saturday, Nov. 24, 2006). Americans collectively spent $8.9 billion in ONE day during the post-Thanksgiving holiday shopping event known as "Black Friday".

That's half of what NASA's budget is . . . for an entire year.

$457.4 billion in retail sales were rung up by shoppers during the 2006 holiday season, buying 42-inch plasma/LCD HDTVs, Sony PS3s, Nitendo Wii's and other extraneous items -- supposedly all in the name of "Brotherhood and Peace on Earth." Another $25 billion in gift cards were also sold in that holiday season alone.

Despite an economy struggling to emerge from a recession, according to a recent report in the Baltimore Sun newspaper, Americans are still projected to spend about $6.9 billion for Halloween in 2009. Nevertheless, critics will still insist on saying "we should stop spending on space exploration" because "it's a total waste of finances or resources," or "we can't afford it," or that we're "wasting our money."

The real value of space exploration to our nation's economy will be a subject of debate among experts for many years to come. Like the Apollo program, its impact will be hard to measure, but will be evident in the new industries that will spring up around it.

The politics of a technological project with a clear goal and self-evident success or failure are much simpler to deal with than any plan to conquer poverty, rebuild the cities, or clean up the environment.

Supporters of space exploration have long known intuitively that the investments America has made in space technology have helped maintain the country as the world's number one technological superpower.

The infinitely complex nature of economic decision-making in a free market system may mean that no one will ever be able to show a direct cause and effect relationship -- but that does not mean that it is not there.