Author Topic: spaceflight economic trickle-down - SLS vs. FH  (Read 4854 times)

Offline CorvusCorax

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spaceflight economic trickle-down - SLS vs. FH
« on: 02/28/2017 05:33 AM »
The latest "fly around the moon" announcement by SpaxeX put renewed emphasis on the massive cost difference between the SLS program and SpaceX Falcon Heavy.

Of course this is oversimplifying. Unless SpaceX develops a high ISP upper stage for FH, SLS payload for BEO missions still outclasses SpaceX vehicle. On the other hand, unlike FHs Red Dragon, SLS still has no actual exploration missions manifested. But that's not the point.

Traditionally, a Space program has a significant boost effect on the economy. Thousands of employees in the primary contractors, many more in subcontractors, funding for innovation and research both by involved commercial players, education, agencies and military, which in turn enable products and entire markets that might otherwise not have existed, from the propulsion scientist that makes a breakthrough in the modelling of combustion processes down to the fast food chain employee that sells him donuts.

At least some of the spent government money becomes a subsidy for economy as a whole, possibly even yielding a long term return in excess of the expenses for the government that spends it. ( Allthough usually only the followup administration woul reap the benefits )

Some of the money on the other hand ends up siphoned out of circulation into the hand of investors, managers, foreign powers and otherentities that do generally not reinvest in a way beneficial to the specific national economy.

SpaceX operates a lot leaner than traditional contractors and manufactures in house instead of subcontracting to safe cost and control technology. A lot less money, but also a lot less technological expertise becomes available to a vast footprint, and the trickle-down is much minimized.

As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.  (Edit: Numbers supposed to be examples, I did not look up the actual ratios)

If the administration were to decide for or against continued funding for SLS in the presence of commercial alternatives,they need to decide what is the primary goal of the expense. Is it:

Subsidice and boost the entire space technology sector and maintain/increase technological leadership internationally

Or

Get cool and awesome space missions done and lots of rockets launched without spending a lotand with mediocre effect on the economy as a whole.

One could argue that the first choice would also benefit SpaceX, as it creates a large pool of skilled space tech employees that SpaceX can hire. The lean approach could lead to a situation where - in the long run - thered not be enough experienced personel in the field that could be hired - especially since ITAR regulations make it tricky to hire skilled immigrants & foreigners in the space/rocket tech segment.

Long story short, there might be overall benefits to SLS being way too expensive. As long as the vehicle at least gets to fly on a number of real missions ( not just round the moon ) it might be worth it.

If it never actually does anything and/or goes the path of Ares/Constellation, it would be very hard to sell these expenses to the tax payers
« Last Edit: 03/01/2017 03:37 AM by CorvusCorax »

Offline ChrisWilson68

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #1 on: 02/28/2017 06:02 AM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.

A dollar spent on SpaceX is going to have exactly the same trickle-down effect as a dollar spent on SLS.

Offline rpapo

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #2 on: 02/28/2017 12:20 PM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.

A dollar spent on SpaceX is going to have exactly the same trickle-down effect as a dollar spent on SLS.
Better: the strength of the trickle-down effect depends on how little of the money spent winds staying in company coffers as profit.  SpaceX continues to run in start-up mode, where there's essentially nothing left at the end of the day.  It has all been spent.  And if it has been spent, it has left SpaceX and entered the broader economy.

Whether that money is spent on employees, equipment, materials, energy, or on subcontractors, matters little here.
An Apollo fanboy . . . fifty years ago.

Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #3 on: 02/28/2017 08:16 PM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.

A dollar spent on SpaceX is going to have exactly the same trickle-down effect as a dollar spent on SLS.
Better: the strength of the trickle-down effect depends on how little of the money spent winds staying in company coffers as profit.  SpaceX continues to run in start-up mode, where there's essentially nothing left at the end of the day.  It has all been spent.  And if it has been spent, it has left SpaceX and entered the broader economy.

Whether that money is spent on employees, equipment, materials, energy, or on subcontractors, matters little here.

On the contrary, it makes all the difference what the dollar is spent on.

SpaceX is / has been saving money. One could say it has been put into compant coffers, for example the investments into solar city. This money however has been working for the economy.

A dollar spent on raw aluminium is leaving the country. Some of it will go to the smeltery, the rest to a mine in south amerika.

A dollar spent on wages is simply reentering the cycle to be spent again. A dollar spent on a subcontractor for R&D can create many more dollars for selling spinoff technology to others.

Really the worst thing to invest a dollar is into imported technology/ goods ( for example an imported russian engine , or raw metal,or oil ) to then be expended in flight/burnt.

The best way to spend that dollar is where it enables others to create additional revenue, multiplying its effect on the economy.

Company profits might not be the worst things, if they get reinvested into the right thing, of course if the only make a foreign investor rhich, then little is gained.

Offline ChrisWilson68

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #4 on: 02/28/2017 09:54 PM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.

A dollar spent on SpaceX is going to have exactly the same trickle-down effect as a dollar spent on SLS.
Better: the strength of the trickle-down effect depends on how little of the money spent winds staying in company coffers as profit.  SpaceX continues to run in start-up mode, where there's essentially nothing left at the end of the day.  It has all been spent.  And if it has been spent, it has left SpaceX and entered the broader economy.

Whether that money is spent on employees, equipment, materials, energy, or on subcontractors, matters little here.

On the contrary, it makes all the difference what the dollar is spent on.

SpaceX is / has been saving money. One could say it has been put into compant coffers, for example the investments into solar city. This money however has been working for the economy.

A dollar spent on raw aluminium is leaving the country. Some of it will go to the smeltery, the rest to a mine in south amerika.

A dollar spent on wages is simply reentering the cycle to be spent again. A dollar spent on a subcontractor for R&D can create many more dollars for selling spinoff technology to others.

Really the worst thing to invest a dollar is into imported technology/ goods ( for example an imported russian engine , or raw metal,or oil ) to then be expended in flight/burnt.

The best way to spend that dollar is where it enables others to create additional revenue, multiplying its effect on the economy.

Company profits might not be the worst things, if they get reinvested into the right thing, of course if the only make a foreign investor rhich, then little is gained.

I completely disagree.  Money spent on imports doesn't disappear.  It comes back into the country as spending on U. S. exports.

Trying to get more money spent domestically instead of on imports is one of the most common and worst mistakes that people make.  This is what caused the Great Depression.  Most of the economic growth since the end of World War II both in the U.S. and worldwide has been because of decreases in barriers to trade.

Online spacenut

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #5 on: 03/01/2017 12:57 AM »
The dollar spent on SpaceX may have the same trickle down effect as a dollar spent on SLS, but you get far more bang for the buck. 

Also, Because Europe went into depression BEFORE America and therefore didn't buy American products.  This helped cause the Great Depression.  Germany went in to depression by 1924, bringing down Europe. 

Domestically produced products create more jobs.  For every manufacturing factory, it helps create at least 4 support jobs.  SpaceX gets a better handle on things producing them in house and in America.  Chinese products are crap compared to former American made by the same companies.  I've older and have been around longer.  In my opinion, America, Japan, Germany, and usually most European countries make better products.  We make the best Rockets, hands down.  Falcon 9, Atlas V, Delta IV, previously the shuttle, Titan, and Saturn IB and Saturn V. 

Offline meberbs

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #6 on: 03/01/2017 01:26 AM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.
This statement is really what your entire argument rests on, and the numbers are obviously completely made up.

The SpaceX number is obviously wrong, because you are basically claiming that 80% of money paid to SpaceX goes to aluminum imports and similar, which is completely untrue.

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #7 on: 03/01/2017 02:31 AM »
On the contrary, it makes all the difference what the dollar is spent on.

SpaceX is / has been saving money. One could say it has been put into compant coffers, for example the investments into solar city. This money however has been working for the economy.

SpaceX buying bonds is not new - I would say all companies with significant assets have investment plans to keep their financial assets working.  And since Musk is the majority owner of the privately held SpaceX, he can suggest whatever investments he wants.

Quote
A dollar spent on raw aluminium is leaving the country. Some of it will go to the smeltery, the rest to a mine in south amerika.

Did you mean to spell "America" with a "k"?

Look, not all minerals can be successfully mined in the U.S., so buying raw material from other countries is not odd or bad.

Quote
The best way to spend that dollar is where it enables others to create additional revenue, multiplying its effect on the economy.

Company profits might not be the worst things, if they get reinvested into the right thing, of course if the only make a foreign investor rhich, then little is gained.

I have no idea what you are advocating for, or against.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline Robotbeat

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #8 on: 03/01/2017 02:49 AM »
Comparing SpaceX and SLS is like comparing paying people to plant fruit trees with merely digging holes and filling them.

Both have about the same short-term economic stimulus, but planting fruit trees is clearly superior because it expands the available resources while the other merely distributes and expends resources. It might keep the diggers out of trouble, but it's absurd to think it's as useful as those fruit trees.

SpaceX has already launched a whole bunch of telecommunications satellites. That's like planting fruit trees. We now have improved resources as a species AND as a nation.
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Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #9 on: 03/01/2017 03:39 AM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.
This statement is really what your entire argument rests on, and the numbers are obviously completely made up.

The SpaceX number is obviously wrong, because you are basically claiming that 80% of money paid to SpaceX goes to aluminum imports and similar, which is completely untrue.

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

You're right, the numbers weren't looked up but meant as examples. I fixed the o-post

But that's exactly what I meant, sourcing electronic components from sub-contractors has a higher economic multiplier than making them in house like SpaceX does. (It is however also a lot more expensive!)

Offline Robotbeat

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #10 on: 03/01/2017 03:44 AM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.
This statement is really what your entire argument rests on, and the numbers are obviously completely made up.

The SpaceX number is obviously wrong, because you are basically claiming that 80% of money paid to SpaceX goes to aluminum imports and similar, which is completely untrue.

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

You're right, the numbers weren't looked up but meant as examples. I fixed the o-post

But that's exactly what I meant, sourcing electronic components from sub-contractors has a higher economic multiplier than making them in house like SpaceX does. (It is however also a lot more expensive!)
No, it's not a higher multiplier if it's more expensive. If I spend $10 and get $15 of economic return, that's a multiplier of 1.5x. If I spend $1 for the same thing and get $1.50 in economic stimulus return, that's the same 1.5x.
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #11 on: 03/01/2017 03:55 AM »

I have no idea what you are advocating for, or against.

I'm advocating for looking at space expenses (by the government) not only as a means to get a specific mission done but also as a major means of economic and capability subsidisation. I think for the US government this mus have been the main purpose for the space program throughout most of Constellation and SLS, otherwise they would have never put up with the inefficiency. It has been allowed to continue on because it secures jobs, lots of them, not because SLS is such a great and innovative rocket. (It's 40 year old tech given a multi billion polish)

If you only look at the bang for the buck as in payload to orbit, or mission capability, there's be almost no reason to continue SLS. Moreso it would have been much more efficient to start a new state of the art vehicle right away instead of using legacy shuttle components as has been done for both constellation and SLS.

I think one has to look at a bigger picture to see the purpose and benefit of this program. It secures not just jobs but also expertise in the workforce nation wide. Without this "rocket manufacturing legacy" even SpaceX might not have had the skilled "old school experts" they hired to get where they are now.

Further, I'm putting up for debate if the way SpaceX is doing it has the same scale of economic impact. They certainly do have a beneficial effect on the whole economy as well, just look at the expected boom around Boca Chica. And of course, you get more bang for the buck ;) But without as many subcontractors the innovation isn't spread across so many companies, it's all happening in house and (comparatively IMHO) less of it is spun out into unrelated innovation in other fields. I think doing in-house production while making the product cheaper also reduces trickle down effect and multiplicators both. But that's just an opinion and there have been arguments by others to sway my opinion in this thread already. I'm not having a fixed agenda here, I am happy to gain new insight :)

Offline meberbs

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #12 on: 03/01/2017 03:58 AM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.
This statement is really what your entire argument rests on, and the numbers are obviously completely made up.

The SpaceX number is obviously wrong, because you are basically claiming that 80% of money paid to SpaceX goes to aluminum imports and similar, which is completely untrue.

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

You're right, the numbers weren't looked up but meant as examples. I fixed the o-post

But that's exactly what I meant, sourcing electronic components from sub-contractors has a higher economic multiplier than making them in house like SpaceX does. (It is however also a lot more expensive!)
No, you don't seem to understand how the multiplier works, or SpaceX's practices. SpaceX might design its boards in house, but they don't have a plant to make chips, and I would bet they don't actually make boards either. Even if they are doing it in house they are paying that many more employees who will buy that many more donuts. And they still buy the chips from manufacturers who pay their own employees, and buy silicon wafers from.... etc.

It would take a thorough research project to actually figure out which project has the bigger multiplier, and in the end I'd bet that they might be within the margin of error of each other. At which point you would have to compare the value of what you got for your money directly.

Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #13 on: 03/01/2017 04:24 AM »

No, you don't seem to understand how the multiplier works, or SpaceX's practices. SpaceX might design its boards in house, but they don't have a plant to make chips, and I would bet they don't actually make boards either. Even if they are doing it in house they are paying that many more employees who will buy that many more donuts. And they still buy the chips from manufacturers who pay their own employees, and buy silicon wafers from.... etc.

It would take a thorough research project to actually figure out which project has the bigger multiplier, and in the end I'd bet that they might be within the margin of error of each other. At which point you would have to compare the value of what you got for your money directly.

I don't know for sure, but I would very much suspect that SpaceX makes their own circuit boards, at least for rocket components. ( Not for office PCs obviously) during a R&D campaign you want to be able to rapid prototype them, they have really tiny production runs ( only a few hundred boards per type and year ) and doing so requires neither very special expertise nor is it expensive.

Unless SpaceX would pay a chip designer to create a specific controller just for them, their impact on the "silicon business" is less then negligible. They simply don't require the numbers to even matter in their metric. 10 Million Smartphones sold with an embedded microprocessors matter. 100 Space rockets won't even measure in the manufacturers books, any distributor/reseller would deliver that out of surplus stock.

I think there was a little scandal a few years ago where some old telco corp wasbitching that SpaceX was hiring their ex employees who were circuit  / hf / chip designers. This would suggest that SpaceX does at least some of this in house ( although I think the personell in question were for the sat business )

I do however agree that it might have been better - or at least really awesome - for the economy, especially from an innovation perspective, if the same amount of money would have been pumped into commercial space that NASA spent on constellation and SLS in the last 10-20 years. Not just SpaceX, but all of commercial space. Just think of all the new vehicles and capabilities that could have already been made. Then again what-ifs are a bit of a moot point.

Offline meberbs

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #14 on: 03/01/2017 05:01 AM »
But that's exactly what I meant, sourcing electronic components from sub-contractors has a higher economic multiplier than making them in house like SpaceX does. (It is however also a lot more expensive!)
Unless SpaceX would pay a chip designer to create a specific controller just for them, their impact on the "silicon business" is less then negligible. They simply don't require the numbers to even matter in their metric. 10 Million Smartphones sold with an embedded microprocessors matter. 100 Space rockets won't even measure in the manufacturers books, any distributor/reseller would deliver that out of surplus stock.
Make up your mind, do you think electronics are a significant contribution to the multiplier or not? Your most recent post makes it sound like you still don't get it. The purchases they make regardless of size still contribute to the multiplier.

Also, I don't know about SpaceX but I am sure that another new space rocket company with plenty of resources, that does testing of its PCBs in house still has a third party make their PCBs, because it is really cheap and quick, so there is no need to buy their own machine.

If you only have baseless speculation to go on, I don't see how you are going to ever make a point here.

I think there was a little scandal a few years ago where some old telco corp wasbitching that SpaceX was hiring their ex employees who were circuit  / hf / chip designers. This would suggest that SpaceX does at least some of this in house ( although I think the personell in question were for the sat business )
That was for the sat business, probably designing phased arrays for home use, so high quantity and more benefit from buying their own manufacturing equipment for it. (But even then hiring design engineers does not mean they would necessarily do the manufacturing themselves. )

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #15 on: 03/01/2017 05:50 AM »
I think for the US government this mus have been the main purpose for the space program throughout most of Constellation and SLS, otherwise they would have never put up with the inefficiency. It has been allowed to continue on because it secures jobs, lots of them, not because SLS is such a great and innovative rocket. (It's 40 year old tech given a multi billion polish)

Just a point of clarification.

The Constellation program was not started with a particular transportation architecture defined by Congress.  The mission was defined (return to the Moon), but it wasn't until Michael Griffin became NASA Administrator that he threw out the studies that had been done and declared that studies he had done were going to be used.  That is where the Ares I & V came from.  Of course we learned later on that the Ares I was needed in order to pay for part of the Ares V, and the Ares I could only be justified by lying about Atlas V and Delta IV Heavy blackout zones.

The SLS was created by usurping the Constellation budget for the Ares V program and reprogramming it for a smaller launcher.  However there was no program the SLS was going to support, so it was purely a jobs program at that point (and still is).

Quote
I think one has to look at a bigger picture to see the purpose and benefit of this program. It secures not just jobs but also expertise in the workforce nation wide. Without this "rocket manufacturing legacy" even SpaceX might not have had the skilled "old school experts" they hired to get where they are now.

SpaceX owes nothing to the SLS, and really nothing to the Constellation program either.  The core technologies that they are leveraging came from Apollo, and some of the R&D work NASA did after Apollo.

Quote
Further, I'm putting up for debate if the way SpaceX is doing it has the same scale of economic impact.

At the beginning of the "Space Race" only governments could afford to build space transportation systems.  Fast forward to today and our aerospace sector has become more than capable enough to take on this task in the private sector.  The need for government-owned transportation systems, at least for the U.S. Government, has now ended.  The U.S. aerospace sector is far more capable than NASA is, and more cost effective for U.S. Taxpayers.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #16 on: 03/01/2017 09:11 AM »

At the beginning of the "Space Race" only governments could afford to build space transportation systems.  Fast forward to today and our aerospace sector has become more than capable enough to take on this task in the private sector.  The need for government-owned transportation systems, at least for the U.S. Government, has now ended.  The U.S. aerospace sector is far more capable than NASA is, and more cost effective for U.S. Taxpayers.

I think SpaceX wouldn't have made it without Gov incentives through NASA (specifically in 2008, after they just launched their first payload to orbit but were essentially depleted their funds)

On the other even Apollo was built by private contractors (although to specs by NASA, as opposed to SpaceX who is doing their own designs) so it was never ONLY gov. If you simplify enough, the only really new thing in COTS is "fixed price contracts" (although SpaceX had relatively free reign with their designs, NASA did help with expertise and technology input - from PICA to scientific data)

Only now that the private sector has matured can it take up this task on its own. (As such one could say though that the COTS money was likely far better spent than any SLS dollars - as far as US capabilities go - since that didn't advance a thing except keeping jobs   Edit: In order to not contradict myself here, I should note that I see capability not the same as economic effect. As SpaceX shows capability can be provided in a much leaner way.)

« Last Edit: 03/01/2017 09:18 AM by CorvusCorax »

Offline CorvusCorax

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #17 on: 03/01/2017 09:27 AM »

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

I had a look at your source paper. Those numbers are based on 1987 spendings. I would argue that these numbers do not apply equally to SpaceX expenses in the 2010s. Especially these 500 Million expense on electronic components with an economic multiplyer of 5.9 creating almost 8000 jobs, can't possibly apply. This is obviously related to development and production of newly developed space rated custom electronics at the 1990 tech level. SpaceX emphasized that one of their main cost savings is using "of the shelf electronics" and achieving space rate reliability through redundance instead of component hardening. We don't have access to their number but I'd say in no way are SpaceX electronic component expenses anywhere near that number nor would that high multiplicator still apply, if they use of the shelf hardware for avionics and control.

Despite that, awesome link, that alone made this entire thread worth it :-)
« Last Edit: 03/01/2017 09:27 AM by CorvusCorax »

Offline meberbs

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #18 on: 03/01/2017 02:12 PM »
I am glad you liked the paper (I don't actually have access to the full paper myself, just excerpts from another source.) I know that the numbers in the paper don't directly apply (to NASA or SpaceX) today, but wanted to provide some examples from actual research. I doubt SpaceX or NASAwould have anything near the 5.9 multiplier on electronics today. A similar good source of multiplier for SpaceX may be some of what they spend their "profit" on such as hiring a company to build the largest all composite pressure vessel ever. I'd bet that resulted in a good multiplier through equipment purchase, etc.

I don't have access to anything near the data required to actually guess at the multiplier, so I won't try, but I don't see a reason Spacex and NASA should have significantly different ones overall. Things SpaceX does to reduce costs to them reduces both the numerator and denominator of the equation, to a net questionable effect.

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #19 on: 03/01/2017 09:30 PM »
I think SpaceX wouldn't have made it without Gov incentives through NASA (specifically in 2008, after they just launched their first payload to orbit but were essentially depleted their funds)

You're not highlighting anything new here.  This topic has been throughly debated for years.

And you ignore the obverse, which is that NASA would have been able to support as cost effectively without the private sector, which is why this was a WIN-WIN for all.

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On the other even Apollo was built by private contractors (although to specs by NASA, as opposed to SpaceX who is doing their own designs) so it was never ONLY gov.

Again, this may be news to you, but it's not to most of us.  NASA spends about 85% of it's budget on contractors, so quite a bit of the innovation NASA needs has always come from the private sector.  What the government provides is the R&D money to prove out the new ideas the private sector has, and most of those only have a single customer, the U.S. Government, so it makes sense for the USG to fund the R&D.

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If you simplify enough, the only really new thing in COTS is "fixed price contracts" (although SpaceX had relatively free reign with their designs, NASA did help with expertise and technology input - from PICA to scientific data)

The top innovation was that NASA was purchasing services, instead of building it's own transportation systems.  Fixed price contracts were important in order to ensure the program stayed affordable, but it was buying services vs building hardware that was the innovation.

As to who designed what, NASA specifically did not have input on the designs, since the companies came up with their own designs and submitted them via proposals.  If NASA didn't like them, then they didn't select them.  Pretty standard contracting stuff.  As to PICA, per U.S. law NASA has to share their IP with U.S. companies and individuals, and EVERY NASA contractor has access to NASA innovations.

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Only now that the private sector has matured can it take up this task on its own.

A point I've been making for many years.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Online AncientU

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #20 on: 03/01/2017 10:22 PM »
As such one could argue that, if  for SLS for every govermnent dollar spent, 8 cent pay for the vehicle/ mission , 92 cent become a general economy subsidy, securing jobs and economic growth in entire regions or states.
While for SpaceX, although cheaper by factor 10, 80 cent pay for the actual rocket, and only 20 cent trickle back into the economy.
This statement is really what your entire argument rests on, and the numbers are obviously completely made up.

The SpaceX number is obviously wrong, because you are basically claiming that 80% of money paid to SpaceX goes to aluminum imports and similar, which is completely untrue.

Also, because of multiple stages of trickle down the total increase can be greater than 100%, but your description is incomplete and ignores this. As an example, NASA spending in 1987 overall had a multiplier effect of 2.1, and some specific industries were higher such as electronic components with a multiplier of 5.9. (Your .92 of "general economy for SLS" would mean a multiplier of 1.92) Source.

SpaceX/EM has stated that raw materials (aluminum mostly) constitute 1% of the price of a launch -- the other 99% is people and machines, plus other raw materials, some parts, etc.
"If we shared everything [we are working on] people would think we are insane!"
-- SpaceX friend of mlindner

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #21 on: 04/05/2017 02:22 PM »
America has Bauxite to make aluminum.  Most aluminum in America is from recycled material, not imported.  Bauxite is still mined to make up the difference.  We actually have more aluminum than iron for steel making.  Also, most steel in America is made from recycled cars. 

When I was in economics, for every dollar you spent, it went around about 7 times before it got back to you.  If you buy a foreign made product, that dollar may not come back.  If you buy a grill made in China, that Chinese may not buy something American, but buy something made in Germany.  Money didn't come back to create jobs. 

If SpaceX (made in America) can launch payloads cheaper than SLS, then NASA, instead of spending $1 billion per SLS launch to put up 100 ton $500 million dollar payload, just buy 4 Falcon heavy's to put up 200 tons for for the same price.  They spend the savings on the components to launch and have say a moon station in a couple of years instead of a little outpost in 4 years.  Spend the money on SEP space tug, a reusable moon lander, a moon space station, a fuel depot.  All of these things have to be made somewhere on earth to be launched. 

Offline edkyle99

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #22 on: 04/05/2017 04:58 PM »
Dare I mention, in context to the previous post, that the SLS core stage panels are being fabricated in Germany?  That the ICPS LH2 tank comes from Japan?  That the RL10 extension comes from Europe?

 - Ed Kyle
« Last Edit: 04/05/2017 05:00 PM by edkyle99 »

Offline woods170

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #23 on: 04/05/2017 06:01 PM »
Dare I mention, in context to the previous post, that the SLS core stage panels are being fabricated in Germany?  That the ICPS LH2 tank comes from Japan?  That the RL10 extension comes from Europe?

 - Ed Kyle
There is no such thing as an all-American rocket. That applies to Falcon 9, Delta IV(H) and Antares as well. Much like Ariane 5 is not an all-Europe rocket (and Ariane 6 won't be an all-Europe rocket either).

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #24 on: 04/06/2017 03:58 PM »
Assuming we are talking about economic impact to the U.S. economy, and not global economic impact, an important point that's being missed here is that launch vehicles that are commercially successful on the global launch market have a near term economic impact that U.S. government-only used vehicles do not.  Specifically, successfully commercial launchers bring "new" money to the U.S. economy when a foreign government or company buys a launch on the commercial vehicle that otherwise would have gone to an overseas provider.  Arguably, a similar principle applies when a U.S. launch company wins a competitive contract for a domestic commercial launch that may have otherwise gone overseas.

Since SpaceX claims to have secured at least one commercial launch contract for FH, you could argue that FH will/may have a larger economic impact on the U.S. economy in the near term.   

In the longer term, it gets much, much harder to estimate.  There is no demonstrated commercial market for a launch vehicle in the class of SLS. The arguments that some markets may evolve for such a class of launcher are highly speculative and not (purely in my opinion) particularly compelling.   

Now without turning this into an SLS vs FH thread (of which there are far too many already), it's arguable that there is a (potentially very large) long term economic return from investing in technologies and capabilities that are useful for public policy reasons and do not yet have a commercial use but that may open up new markets and commercial opportunities in the future.  An example is the space domain is the ISS.  The ISS is providing (among other things) an initial market for crewed transportation services to and from LEO, and a test bed for pursuing research areas and technologies that may prove to have commercial value later.  The ISS will almost certainly never be commercially viable, but a commercial follow on could be, and research findings could lead to huge returns far down the road that are impossible to predict now, and perhaps commercial human spaceflight opportunities will open up in LEO because starliner and dragon have been developed and are available.  Over decades, the economic returns could far exceed the substantial investment in ISS. 

So there is an argument that a super heavy lift vehicle like SLS could play a similar role in establishing new markets and capabilities in deep space.  It's of course arguable that FH could as well, but I would strongly suggest, or even beg, leaving the discussion of the extent to which an SLS class vehicle vs a FH class vehicle is needed for such an endeavour to the other threads where it has already been beaten to death.

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #25 on: 04/06/2017 09:35 PM »
Since SpaceX claims to have secured at least one commercial launch contract for FH, you could argue that FH will/may have a larger economic impact on the U.S. economy in the near term.

Future Falcon Heavy missions (paying customers), in alphabetical order:

ARABSAT (ARABSAT 6A)
INMARSAT
INTELSAT
US AIR FORCE (STP-2)
VIASAT

So three foreign companies, one U.S. Government, and one U.S. company.
 
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In the longer term, it gets much, much harder to estimate.  There is no demonstrated commercial market for a launch vehicle in the class of SLS. The arguments that some markets may evolve for such a class of launcher are highly speculative and not (purely in my opinion) particularly compelling.

No demonstrated market, and even if there was NASA could not, by law, compete against the private sector.

Plus, no company is going to willingly risk committing to using the SLS.  There is a reason the USAF won't depend on NASA, and it applies to private sector too - NASA doesn't control it's own destiny, and operating a transportation system is not one of it's core strengths.

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Now without turning this into an SLS vs FH thread (of which there are far too many already), it's arguable that there is a (potentially very large) long term economic return from investing in technologies and capabilities that are useful for public policy reasons and do not yet have a commercial use but that may open up new markets and commercial opportunities in the future.

If the SLS will only be used for U.S. Government use, and specifically for only NASA use, then that means it won't be an efficient use of taxpayer money, especially if there are alternative solutions that could use the private sector to achieve the same result but at a lower overall cost.

In other words, that the same money being used for the SLS could have a higher ROI being spent in some other part of the government (i.e. DoD, NIH, DoE, etc.).

I agree that there is a place for the U.S. Government to spend money to either support an existing market, or to help create a future market.  However the SLS and Orion do not help to achieve either of those goals, since they don't leave behind any durable infrastructure in space for the private sector to leverage, nor are they paving the way for private sector spinoffs in the future.  The SLS and Orion are, if anything, competitors to the private sector, not partners.

Also, for the private sector to benefit from what the government is spending money on, or to leverage government capabilities, there needs to be clarity of purpose and direction from the government.  The private sector needs dependability, especially since the lead times for anything space related are so long, both for the building of space hardware and the operational lifetimes.  And our government has not had a cohesive plan for either the SLS or the Orion.

Bottom line is that spending on the SLS today is basically equivalent to spending the money anywhere else in the government, with possibly a less than average ROI overall.  And this is based on the lack of an overall plan for how the SLS can help grow U.S. GDP in the future, whereas what SpaceX is doing is already growing U.S. GDP and looks to only increase that in the future.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #26 on: 04/12/2017 02:07 PM »
I agree that there is a place for the U.S. Government to spend money to either support an existing market, or to help create a future market.  However the SLS and Orion do not help to achieve either of those goals, since they don't leave behind any durable infrastructure in space for the private sector to leverage, nor are they paving the way for private sector spinoffs in the future.

Unsurprisingly, I disagree completely. Regardless of what launch system you use to put the outpost up there, establishing a small outpost in cislunar space creates a market for deep space logistics in much the same way as ISS did for LEO.

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #27 on: 04/12/2017 02:31 PM »
I agree that there is a place for the U.S. Government to spend money to either support an existing market, or to help create a future market.  However the SLS and Orion do not help to achieve either of those goals, since they don't leave behind any durable infrastructure in space for the private sector to leverage, nor are they paving the way for private sector spinoffs in the future.

Unsurprisingly, I disagree completely. Regardless of what launch system you use to put the outpost up there, establishing a small outpost in cislunar space creates a market for deep space logistics in much the same way as ISS did for LEO.

This post for about economic trickle-down of the SLS vs Falcon Heavy, not about small outposts in cis-lunar space.

You are responding to a topic on a different thread.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #28 on: 04/12/2017 03:31 PM »
I agree that there is a place for the U.S. Government to spend money to either support an existing market, or to help create a future market.  However the SLS and Orion do not help to achieve either of those goals, since they don't leave behind any durable infrastructure in space for the private sector to leverage, nor are they paving the way for private sector spinoffs in the future.

Unsurprisingly, I disagree completely. Regardless of what launch system you use to put the outpost up there, establishing a small outpost in cislunar space creates a market for deep space logistics in much the same way as ISS did for LEO.

This post for about economic trickle-down of the SLS vs Falcon Heavy, not about small outposts in cis-lunar space.

You are responding to a topic on a different thread.

I know what thread i'm responding to. the point you were arguing in THIS thread is that SLS is not being planned to be used in a way that creates markets for commercial opportunities.  That isn't true. 

Offline Rocket Science

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #29 on: 04/12/2017 03:50 PM »
The dollar spent on SpaceX may have the same trickle down effect as a dollar spent on SLS, but you get far more bang for the buck. 

Also, Because Europe went into depression BEFORE America and therefore didn't buy American products.  This helped cause the Great Depression.  Germany went in to depression by 1924, bringing down Europe. 

Domestically produced products create more jobs.  For every manufacturing factory, it helps create at least 4 support jobs.  SpaceX gets a better handle on things producing them in house and in America.  Chinese products are crap compared to former American made by the same companies.  I've older and have been around longer.  In my opinion, America, Japan, Germany, and usually most European countries make better products.  We make the best Rockets, hands down.  Falcon 9, Atlas V, Delta IV, previously the shuttle, Titan, and Saturn IB and Saturn V.
If you are "that old" then you should remember when "made in Japan" meant as you say "crap"... Product quality is "not static" regardless of the nation..
"The laws of physics are unforgiving"

Online Coastal Ron

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Re: spaceflight economic trickle-down - SLS vs. FH
« Reply #30 on: 04/12/2017 08:52 PM »
I agree that there is a place for the U.S. Government to spend money to either support an existing market, or to help create a future market.  However the SLS and Orion do not help to achieve either of those goals, since they don't leave behind any durable infrastructure in space for the private sector to leverage, nor are they paving the way for private sector spinoffs in the future.

Unsurprisingly, I disagree completely. Regardless of what launch system you use to put the outpost up there, establishing a small outpost in cislunar space creates a market for deep space logistics in much the same way as ISS did for LEO.

This post for about economic trickle-down of the SLS vs Falcon Heavy, not about small outposts in cis-lunar space.

You are responding to a topic on a different thread.

I know what thread i'm responding to. the point you were arguing in THIS thread is that SLS is not being planned to be used in a way that creates markets for commercial opportunities.  That isn't true.

Let's remember that the SLS is only a transportation system, and in this example the SLS transports the DSG and it's elements to space, and will be used to support the DSG by also transporting the Orion spacecraft to space (which itself is also only a transportation system).

So really what you are stating is that the DSG has the potential to create a market, not the SLS.

But since the DSG could be created without the SLS using commercial or private sector contracting services, the NASA-owned SLS is, if anything, removing work from the commercial marketplace.

If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

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