Mars, no really; again

[Viking]

This is what NASA's deputy administrator between 2009-2013 is saying:

NASA has spent more than $15 billion to try and develop their own heavy lift rocket, the Space Launch System (SLS), with a first flight planned in roughly two years — assuming all goes according to plan.

Once operational, SLS will cost NASA over $1 billion per launch. The Falcon Heavy, developed at zero cost to the taxpayer, would charge NASA approximately $100M per launch. In other words, NASA could buy 10 Falcon Heavy launches for the coat of one SLS launch — and invest the remainder in truly revolutionary and meaningful missions that advance science and exploration.

It is understandable that government employees, contractors and their elected officials want to keep this expensive rocket development program going. A large share of NASA’s roughly $19billion budget has been spent on this constituency, and in turn is protected by them. We have come to accept this “tax” on the agency, but It is time for the nation to decide if we want a space program — or a jobs program.

I haven't checked the numbers presented here, but the sentiment isn't exactly uncommon among people who might know what they are talking about.

[Montmorency]

?

I'm not saying that Musk shouldn't receive any various subsidies, or that he shouldn't re-invest subsidy-driven profits from his business elsewhere into a venture like SpaceX - just that claims of SpaceX showing how private enterprise can offer cheaper options than public orgs like NASA are highly misleading.

https://arstechnica.com/science/2017...e-exploration/

It looks like private will be the top option in the foreseeable future for high-payload launches, but we should keep in mind the impact of subsidies is easily disguised once a degree removed, while inputs and outputs are highly transparent with NASA. Don't get captured. (Let's be honest, they always get captured.)

[Viking]

As your own article points out, and which should be correct, SpaceX has received very little subsidies (and Tesla isn't fairing all that well economically; so I don't know that there's much money to invest in SpaceX originating from there):

On a smaller scale, SpaceX, Musk's rocket company, cut a deal for about $20 million in economic development subsidies from Texas to construct a launch facility there. (Separate from incentives, SpaceX has won more than $5.5 billion in government contracts from NASA and the U.S. Air Force.)

[...]

SpaceX, though it depends far more on government contracts than subsidies, received an incentive package in Texas for a commercial rocket launch facility. The state put up more than $15 million in subsidies and infrastructure spending to help SpaceX build a launch pad in rural Cameron County at the southern tip of Texas. Local governments contributed an additional $5 million.

If Musk had a fortune that was <$5.5 billion greater than what it were, he would have had enough money to develop his Falcon rockets without government money in any shape or form. That's more or less the story with Jeff Bezo's Blue Origin (the company does appear to have at least received smaller sums, but with Bezos' wealth, these certainly aren't needed).

I would say that it is correct that it is not simply 'the private market' that are driving the prices down, but very wealthy people like Musk and Bezos that have their own highly ambitious and futuristic visions (yes, Bezos too). The cost of entry for this market is very high, so it makes sense that great pre-existing wealth is a requirement.

It is true that a very large share of launches globally (including for SpaceX) have state entities as their primary customer(s), but the relevance of that is, of course, heavily dependent on the precise argument being made.

[Seamus Fermanagh]

Directly or indirectly, the subsidies Musk has had access to have certainly been part of the SpaceX effort. Monty is clearly correct on this. I'm not necessarily saying that that is a bad thing.

Government funding underpinning a private effort may be the best model for improving space development. Then cut the taxpayer in on the backside for any direct and indirect payoffs (asteroid mining, tech licensing for consumer goods etc.) at a reasonable percentage. Industry does things to build towards success, so take advantage of it and (to a reasonable degree) subsidize it. This isn't paying corporate farms to plow corn under, it's providing a support framework for R&D.

Government run/government funded efforts seem to get too bureaucratized. The space program worked pretty well during its crusade phase, but following Buzz and Neil's triumph it had a lot more clunkiness and limited successes. It became a long running science project and, while shuttles did contribute to our satellite connected world, they didn't prove cost effective when compared with simpler techs.

I think NASA does have a role in space exploration, but unless it is a crusade-mode effort I think the private with government support model is likely better.

[Montmorency]

As your own article points out, and which should be correct, SpaceX has received very little subsidies (and Tesla isn't fairing all that well economically; so I don't know that there's much money to invest in SpaceX originating from there):



If Musk had a fortune that was <$5.5 billion greater than what it were, he would have had enough money to develop his Falcon rockets without government money in any shape or form. That's more or less the story with Jeff Bezo's Blue Origin (the company does appear to have at least received smaller sums, but with Bezos' wealth, these certainly aren't needed).

I would say that it is correct that it is not simply 'the private market' that are driving the prices down, but very wealthy people like Musk and Bezos that have their own highly ambitious and futuristic visions (yes, Bezos too). The cost of entry for this market is very high, so it makes sense that great pre-existing wealth is a requirement.

It is true that a very large share of launches globally (including for SpaceX) have state entities as their primary customer(s), but the relevance of that is, of course, heavily dependent on the precise argument being made.

With nascent commercialization of space, state organizations are necessarily the biggest costumers. Eventually that might change, but it remains in the realm of science fiction.

So that said, of course government contracts make up more toward the capitalization than subsidies - one can hardly get by with subsidies but no contracts. That would be more like a money laundering front.

Subsidies, like in other fields such as renewable energy (which as noted in linkies Musk is a player in), provide seed money and the necessary capitalization to even be in a position to receive or pursue contracts. You let slip there, the implication that Tesla would probably not be solvent without various subsidies and tax credits and breaks (including on the demand side).

Bezos, without further inquiry, appears to genuinely be self-funding his vision. But still you see, there are no pristine billionaires: that money came from somewhere (Amazon operations > stock/income), and the same questions apply.

I think NASA does have a role in space exploration, but unless it is a crusade-mode effort I think the private with government support model is likely better.

NASA will continue to be the top player in scientific missions and exploration, as well as space tech and research (meaning applicable to life in space).

[Viking]

Directly or indirectly, the subsidies Musk has had access to have certainly been part of the SpaceX effort. Monty is clearly correct on this. I'm not necessarily saying that that is a bad thing.

The point is that the subsidies do not appear to have been a factor that made the rockets possible. Compared to $5.5 billion in contracts, $20 million in subsidies is pocket change. SpaceX also charges around $60 million per Falcon 9 launch, meaning that the profit of a single launch should be a large fraction of, or even equal to or greater than, the amount the the company received in subsidies. It is also not clear that these subsidies were even received before the Falcon 9 rocket was flying.

So that said, of course government contracts make up more toward the capitalization than subsidies - one can hardly get by with subsidies but no contracts. That would be more like a money laundering front.

That is a bit of an oversimplification. If the government needs the services of a company with very high irregularity and where private customers are far and few between, large amounts of subsidies in some shape or form could be necessary for the company to stay afloat in a useful form.

On the other hand, if the government wants to break a monopoly, it could find it to be worth it to pay significant sums to prevent a new and promising, but struggling, company from collapsing.

But still you see, there are no pristine billionaires: that money came from somewhere (Amazon operations > stock/income), and the same questions apply.

This seems to be moving the debate to a very different landscape (and I don't see what the point is supposed to be). Where do governments get their resources from? From private individuals. Where do private individuals get their resources from?

[Montmorency]

The point is that the subsidies do not appear to have been a factor that made the rockets possible.

I'm emphasizing the indirect subsidies to SpaceX through direct subsidies to Tesla.

https://en.wikipedia.org/wiki/Elon_Musk

Elon Musk made his early career from selling startups and stock. Before the last few years, SpaceX was mostly about building confidence and valuation to secure long-term contracts.

As of May 2012, SpaceX had operated on total funding of approximately $1 billion in its first ten years of operation. Of this, private equity provided about $200M, with Musk investing approximately $100M and other investors having put in about $100M (Founders Fund, Draper Fisher Jurvetson, …).[88] The remainder has come from progress payments on long-term launch contracts and development contracts. As of April 2012, NASA had put in about $400–500M of this amount, with most of that as progress payments on launch contracts.[83] By May 2012, SpaceX had contracts for 40 launch missions, and each of those contracts provide down payments at contract signing, plus many are paying progress payments as launch vehicle components are built in advance of mission launch, driven in part by US accounting rules for recognizing long-term revenue.[83]

With the new millenium, Musk had however many millions to invest from his previous success; most conservatively he could have put everything in financial instruments and settled down. Tesla and SpaceX were both launched around the same time, in 2002-3, with Musk a cofounder of Tesla.

The company enjoys various forms of federal and state subsidy, which it was estimated in 2015 amounted to at least $30,000 for each vehicle sold, or cumulatively $4.9 billion

The Tesla products were (still are?) sold at a loss, and that was only sustainable with subsidies. When Musk assumed full control in 2008, Tesla was nearing bankruptcy. The Obama admin and the states (more troubling since state subsidy is basically just a euphemism for corruption) swept in to save the day.

By January 2009, Tesla had raised US$187 million and delivered 147 cars. Musk himself had invested US$70 million.[48][51] In May 2009, Daimler AG acquired an equity stake of less than 10% of Tesla for a reported US$50 million,[52][53] again saving Tesla.[54] Toyota provided a similar amount in 2010.[53]

In June 2009, Tesla was approved to receive US$465 million in low-interest loans from the 2007 US$8 billion Advanced Technology Vehicles Manufacturing Loan Program by the United States Department of Energy.[55] The funding came in 2010 and supported engineering and production of the Model S, as well as the development of commercial powertrain technology.[55]
[...]
In May 2013, Tesla raised $1.02 billion ($660m from bonds) partially to repay the DOE loans (early[66]) after their first profitable quarter.[67][68] In February 2014 the company sold $2 billion in bonds (to build GigaFactory 1).[68] In August 2015 Tesla sold $738 million in stock (for the Model X)[69] and in May 2016, $1.46 billion in stock ($1.26 billion for the Model 3).[70] As of January 29, 2016, Musk owned about 28.9 million Tesla shares, or about 22% of the total.[71][72]

Tesla stated that its automotive branch had a gross margin of 23.1% as of 2Q2016, and has generally been above 20%.[73] However, expenditures[74][75] for expanding future production (such as Gigafactory 1[76] and Model 3[77]) are bigger than product profit, resulting in a net loss.[78]

Look at the graph for production and sales. This is what Musk has succeeded at, offering a promise and keeping it afloat long enough to draw widespread attention.

Musk famously draws no salary; his continuing income from his companies is dependent entirely on his stock options and performance bonuses. In other words, the more hype, the more value and investor interest it attracts, which directly contributes to his cash flow. Without the success of Tesla over the past decade, almpst certainly predicated on subsidies, it's arguable that SpaceX would have trouble demonstrating ability to fulfill contract milestones, thus impairing its long-term viability as a productive enterprise. You could always speculate otherwise. Maybe an expert analysis could show Musk could have lifted not one finger after 2001 and generated all necessary capital from financial instruments and investments alone, but I don't know how to do that. Maybe in the event of Tesla's failure he would have been willing to sacrifice more of his own wealth, or take on more debt to finance his passion, but that's still detrimental to corporate viability and damaging to confidence in his ability and leadership. Ultimately, subsidies count as a material contribution to the success of Tesla directly and therefore SpaceX indirectly. None of this is meant to demean Musk or the technology (his philosophy is another subject entirely); the petrochemical/automobile industries have received many orders of magnitude more over the past century.

[Viking]

Ultimately, subsidies count as a material contribution to the success of Tesla directly and therefore SpaceX indirectly.

Tesla subsidies contributing to the success of SpaceX is of course very different from these subsidies being necessary for that success. For the former, I don't have much of an opinion. For the latter, the evidence provided thus far is indirect and incomplete.


Without more information on Musk's finances, we can't really tell where the money he invested 'ultimately' came from; likewise with other investors. Without more details on the early funding history of SpaceX, we can't really tell how important different factors were for the company's success there. Such information may be easily accessible on the web, but I am not inclined to go look for it for the time being..

[HopAlongBunny]

Overlooked has been the failure of Elon to deliver his payload to a proper orbit.
Earth-Mars orbit? Nah, missed that.
Somewhere around the asteroid belt? Closer...
Collision course with the Earth!!! Maybe :

http://www.cbc.ca/news/technology/mu...arth-1.4537407

[Gregoshi]

My son stumbled upon the video below which focuses on the sound of the Falcon launch. It is meant to be watched with headphones which will give you a surround sound like experience. Pretty cool stuff.