Tom’s Tidbits- Space… The Fiscal Frontier

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Greetings!

Most people don’t pay attention to our military space program.  If you’re like me, you didn’t even know we had one!  I certainly assumed the military had a presence in space, but on the rare occasions I thought about it at all I imagined they piggybacked on NASA flights.  Not even close… we’ve forked over A MINIMUM of $37 BILLION dollars over the past 10 years for military launches alone! For WHAT?  We as citizens aren’t in the loop, so in most cases it’s hard to know if the money is wasted or not.  Not always, though. The story that caught my eye gives a glimpse into one area of the program, but the price tag isn’t the headline.  It’s a story of bureaucracy, big government, corporate cronyism, small business squeeze, and how all this combines to endanger the access to space it was supposed to ensure to begin with…RestOfNewsletter

Lockheed and Boeing’s Space Age roots begin in the 1950’s when they developed the boosters that are the workhorses of our current space program. In 2005 they decided to combine their launch services into the United Launch Alliance (ULA).  The merger was criticized at the time by the Federal Trade Commission (FTC) and the Department of Defense (DoD) among others.  The FTC even intervened to stop the merger but eventually relented and in 2006 ULA was born.

Fast forward to today.  ULA has performed 106 launches with a 100% success rate, which is a very good thing.  But they also charge over $350 million per launch, plus an additional “readiness fee” of $800 million annually.  ULA’s recent uncontested contract for $11 billion is currently under investigation by the DoD.  Their monopoly has eliminated the incentive to innovate, so even though they’ve promised for years to develop a domestically-manufactured replacement, ULA’s rocket fleet is now dependent on engines made only in Russia.  That’s right… our space program now depends on the good will of Vladimir Putin.

Now ULA is facing challenges to their monopoly, but rather than make changes they’re fighting back.  Elon Musk’s SpaceX says they can launch for as little as $80 million per flight, and aren’t dependent on Russian engines to do it.  SpaceX filed suit to block the $11 billion no-bid deal, which resulted in a settlement that would open more missions to competitive bid.  Neither SpaceX nor the many other growing private space companies can yet do everything ULA can, but there shouldn’t be a bloated monopoly standing in the way of their attempts.

In my fantasy world, I’d shrink the Pentagon and cut our “defense” budget in half over the next 10 or 20 years.   I’d prefer going even lower, perhaps to 25% of current levels, but even that major change still wouldn’t honor the Founder’s goal of “no standing army”. We either need to fight the congressional-military-industrial complex or accept endless war and waste as the new normal.  But that’s my fantasy world… in this world, the Pentagon is an economic black hole. We just accept the trillion dollar annual spending and the trillions of dollars that have gone missing in their care.  For some disastrous mystery the Pentagon can’t be audited, but companies like ULA, Halliburton, Blackwater, and a thousand others are sterling examples of why they should be.  Every dollar spent for planes, boats and bombs is a dollar that could have been invested in a better society.

Take Care and Make a Great Day!

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Digging Deeper…

How Elon Musk Exposed Billions In Questionable Pentagon Spending, Matthew Nusbaum on Politico, May 2016

ULA: Failure of Merger and Monopoly, Tim Kyger in SpaceNews, Oct, 2015

SpaceX Breaks Boeing-Lockheed Monopoly On Military Space Launches, Irene Klotz on Reuters, Apr 2016

Military Access to Space at Risk, Thompson and Baroudos, on Real Clear Defense, May 2016

 

 

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