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

2. 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

3. 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

6. SRAS2
SRAS1
AD
REAL GDP
PRICELEVEL
y1
p1
y2
p2

8. SRAS
AD1
REAL GDP
PRICELEVEL
y1
p1
y2
p2
AD2

9. 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

10. LRAS
SRAS
AD1
REAL GDP
PRICELEVEL
y1
p1
y2
p2
AD2

11. 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

12. 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

13. 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.

14. 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.

17. 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

18. 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