Boosting GDP in Zero-G

The Obama administration is set to enact and observe a dramatic reshaping of the country's space program. The task of replacing the shuttle program is being left to private companies, and the coming years are expected to see a general privatization of space travel. Moreover, NASA's priorities are being reset with a renewed emphasis on scientific usefulness. Ultimately, I feel that the innovations in NASA, and in the field of Space Exploration in general, are set to provide real and substantial economic benefits, both to the world as a whole and to the U.S economy in particular.

The plan for replacing the space shuttles to provide government money to pay for private corporations, like Boeing and Space X, to provide the new launch vehicles to carry people and equipment into space. In paying for private companies to build the launch vehicles, the government stands to enter a situation wherein "everyone wins", ranging from the companies receiving the contracts, to the U.S taxpayers, who benefit from the new methods increased efficiency over previous projects, to other private corporations, which are also able to use the new launch vehicles.

The new launch vehicles will inherently be more economically efficient than the space shuttles, as (counter-intuitive as this sounds) they will not be reusable, and will thus not require expensive upkeep and repair work. The way that the Obama administration plans to pay for the shuttles will save taxpayer money as well. Previously, government aerospace contracts with private companies were payed on a "cost-plus" basis. What this means is that the government would award aerospace contracts to private companies, and would receive an estimate of the cost, but would only after the contract was completed find out what it would actually end up paying the company. The old system would thus leave little incentive for the contracted companies to keep down costs, and ultimately bred inefficiency and waste at the taxpayers expense. What the Obama Administration plans to do is to award contracts under a "fixed-contract" agreement, which awards contracts to companies under the understanding that the company will be paid an initially agreed upon amount. This leaves the companies, rather than the government, set to lose money if the project is over-budget, and thus creates an inventive for efficiency lacking under the cost-plus system.

In addition to saving taxpayer money (which could, say, help reduce our enormous budget deficit) the reworked approach towards space travel holds the promise of boosting GDP and the economy, both in the short and long term. By contracting private companies to provide launch vehicles, the Obama administration will be boosting the government spending (G) portion of GDP, and the multiplier effect will no doubt work to boost the economy to a level disproportionate with government spending. Moreover, as previously mentioned, by paying for the development of new launch vehicles, the Obama administration leaves private companies interested in sending people into orbit with a means to do so, which promises to facilitate the boosting of another segment of GDP, investment. A perfect example is, Bigelow Aerospace, which has invested hundreds of millions of dollars in a type of inflatable space-habitat, which it hopes to put into space and make available for scientific research. A new, privately supplied launch vehicle developed with government assistance would allow companies like Bigelow a relatively easy and inexpensive method by which to transport crew to these habitats.

As I interpret it, The Obama administrations approach to space travel/exploration thus promises to simultaneously save taxpayer money and boost GDP. What are your opinions on Obama's plans for the U.S space program? Here are some links to an article and a video that I used.

http://www.economist.com/science-technology/displaystory.cfm?story_id=15450607

http://audiovideo.economist.com/?fr_story=8d126c37ba95fd99da0ea66da7b905848063f803&rf=bm