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AP Macroeconomics - SpaceX Final Project


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Final project for AP Macroeconomics course in which the impact of private space exploration companies such as SpaceX on the US Economy is analyzed.

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AP Macroeconomics - SpaceX Final Project

  1. 1. What is SpaceX? Private Space Company founded by Elon Musk Already did 2 Shuttle Missions for NASA Short Term Goal: Reducing the Cost of Space Travel Long Term Goal: Colonizing Mars Competitors include: United Launch Alliance (Boeing and Lockheed Martin) Orbital Science Corporation Bigelow Aerospace Blue Origin Virgin Galactic
  2. 2. Musk claims that he can cut Space Exploration Tasks by 60% Uses current technology Reusable Space Ships Capitalist Competition ULA vs. SpaceX vs (some others) Reduce costs for Access to Space for Government and other companies Reduce Government Spending Allows NASA to perform more missions Reduces Dependance on Foreign Manufacturers Decrease Imports Reduce Cost of Flight
  3. 3. SRAS2 SRAS1 AD REAL GDP PRICELEVEL y1 p1 y2 p2
  4. 4. SRAS AD1 REAL GDP PRICELEVEL y1 p1 y2 p2 AD2
  5. 5. New Launch Site in Texas Stimulate Local Economy Increase AD due Spending Multiplier’s effect on Consumer Spending Benefit local businesses of South Texas Create ~500 Jobs
  7. 7. The Impact Imports from Russia decrease Decrease Costs for Space Travel Increase Access to Space for Other Companies Allow for an increase in Gov.t Spending Increasing Competition in Oligopolistic Industry Stimulate Local Economy of South Texas
  8. 8. Jeff Foust, editor of the Space Review argues: “Even dramatically lower launch costs will do little to change the economics of the industry, at least for the governments and firms that make up almost all of its current customers. Launch costs are but a small part of the total cost of developing, building and running a satellite network” Response: Mike Gold, an executive at Bigelow Aerospace, a firm that makes inflatable space stations—and which has an agreement with SpaceX to launch its products—thinks that most of the interest will come from people and organisations so far denied access to space. “Putting a big rocket like the Falcon in range of mid-size companies, research institutions and even wealthy private individuals, that’s a game-changer, When the laser was first invented, no one had any idea what it might be used for. Today they’re everywhere. We’re still at that early stage with cheap rockets.” Opposing Viewpoints
  9. 9. Robert Stevens, CEO of Lockheed Martin: “I’m hugely pleased with 66 in a row from ULA, and I don’t know the record of SpaceX yet,’’ he said. “Two in a row?’...You can thrift on cost. You can take cost out of a rocket. But I will guarantee you, in my experience, when you start pulling a lot of costs out of a rocket, your quality and your probability of success in delivering a payload to orbit diminishes.’’ Response: Elon Musk, CEO of SpaceX: “The fundamental reason SpaceX’s rockets are lower cost and more powerful is that our technology is significantly more advanced than that of the Lockheed-Boeing rockets, which were designed last century.” Opposing Viewpoints cont.
  10. 10. A New Launch Site in Southern Texas will severely disrupt local wildlife. Neil DeGrasse Tyson: “Space is a long-term investment”: “It’s an investment that private enterprise cannot lead. It’s hard to predict the risk and return on investment on doing anything big and expensive first.” Tyson went on to point out that the first Europeans to come to America were not the Dutch East India Company, but Christopher Columbus and his crew, whose expedition was paid for by Spain. After the initial exploration, there will be opportunities for private companies but governments have to lead the way. Private Space Companies’ roles will be providing services for governments like space taxiing and transport missions while governments work on the real challenges. Opposing Viewpoints cont.
  11. 11. Quiz Questions What are the two companies that make up the United Launch Alliance? Where is SpaceX building a new launch site? Which country does NASA currently depend on to launch our astronauts to space? Will the Private Space Industry ever eclipse Public Space Programs? If not, what kind of role will Private Space Companies have in the future? Discussion
  12. 12. Burnett, John. "SpaceX Could Give Struggling Texas City A Boost." NPR. NPR, 30 Jan. 2014. Web. 08 June 2014. Chen, Cathleen Q. "In South Texas, Hopes Rocket Site Will Launch the Local Economy, by Cathaleen Qiao Chen." The Texas Tribune. 04 June 2014. Web. 07 June 2014. McGarry, Brendan, and Tony Capaccio. "SpaceX’s Entry into $70 Billion U.S. Launch Market Draws Lockheed Jab." Washington Post. The Washington Post, 24 Dec. 2012. Web. 08 June 2014. "Up and down and up Again." The Economist. The Economist Works Cited