Does NASA's Budget Have An Effect On GDP Growth?

Jan 23, 2020

11 min read

Updated: Feb 7, 2020

NASA is a diverse and robust organization that is admired by the public and benefits the growth of our nation. Many of the technologies we use in industry, business, and our everyday lives are based on NASA technologies. The research and development that NASA conducts has proven to produce a reliable return on investment and is more profitable than other similar enterprises. Moreover, the technological capital that NASA develops is the pride of most of the world.

The enthusiasm for space exploration is high and many are excited about future missions to the moon and to Mars. “Roughly seven-in-ten Americans (72%) say it is essential for the U.S. to continue to be a world leader in space exploration, and eight-in-ten (80%) say the space station has been a good investment for the country, according to a new Pew Research Center survey conducted March 27-April 9, 2018.” (Pewresearch.org, Majority of Americans…) The overwhelming support that NASA receives from the community is bipartisan and diverse, however, around 20% of the population believe that private companies should be doing most of the research, in return asking to defund these areas of the national budget.

The proposed fiscal year 2020 budget request for NASA was $21 billion dollars with a $1.6 billion amendment. This budget request is $2B higher than the 2019 request and accelerated NASA directives that specifically benefit a lunar landing by 2024, increasing the Deep Space Exploration Systems directive by an additional $1.4 billion. This current request also completely removed funding for the office of STEM Engagement (formerly the Education Division) and heavily reduced funding of the Science directive, including earth science, planetary science, astrophysics, and heliophysics and also cutting funding for the WFIRST space telescope.

The House Appropriations Committee denied the request stating “The Committee rejects these proposals and has included an additional $881,100,000 above the request to support these critical programs, including additional funding to increase the availability of competitive research grants within Earth Science and a nearly twelve percent increase over the FY2019 level for Science, Technology, Engineering and Mathematics Engagement.” (HAC, Commerce, Justice, Science…)This leaves the currently approved budget for $22.315 billion instead.

In a study done by Chase Econometric in 1976 they find that“ within the range of modifications likely to be made to the NASA R & D budget during the next few years, we find that the economic impact is proportional to the size of the budget change.” (Chase Econometric analysis 1976 ) NASA’s mission is to drive advances in science, technology, and exploration to enhance knowledge, education, innovation, economic vitality, and stewardship of Earth. Established in 1958, a half-century ago, President Eisenhower signed the National Aeronautics and Space Act, bringing NASA to life and unifying much of the research the United States was doing at the time. Since its inception, NASA has always pushed what was capable; breaking speed records, developing state-of-the-art computer technology, and landing humans on the moon. NASA also has impacted the development of our modern resources, introduced innovative ways to manufacture, and increased our intellectual capital. “NASA invests in economically valuable technologies that help the nation maintain its competitive advantage. NASA spends nearly half its budget on U.S. manufacturing industries; the White House identifies manufacturing as vital to reinvigorating the economy” (Tauri Group, NASA Socio-Economic Impacts)

With the ongoing concerns about infrastructure and national debt, many citizens of the United States think that our hard-earned tax dollars should be spent on programs that benefit them directly. Congress allocates a budget for all of the government’s programs based on what is beneficial for the country and what their constituents value. NASA’s programs have impacted the growth of our economy in extremely significant ways, and the funding that they receive affects the technology and return on investments that we all benefit from. Increasing NASA’s budget has a positive effect on the GDP growth of the United States.

Most Americans would be surprised to find NASA’s budget is only 0.6% of the total federal budget. “Arguably, this relatively small investment provides a greater dollar-for-dollar economic and strategic return than any other civilian government program.” (The Hill, Increased Funding of NASA...) The research NASA does benefits many sectors of our economy, produces many skilled jobs, stimulates breakthroughs in manufacturing, and defends our nation and planet. However, the growth of our GDP relative to NASA’s budget cannot be based on any one number, much of the innovations are not readily usable by the public and may take years to see a return if any. The Chase study “found that an increase in NASA R & D spending increases the rate of technological change and reduces the rate of inflation for two reasons. First, in the short run it redistributes demand in the direction of the high-technology industries, thus improving aggregate productivity in the economy. More stabilizing than general government spending during a period of recovery. Second, in the long run, increased NASA R & D spending expands the production possibility frontier of the economy by increasing the rate of technological progress. This improves labor productivity at a faster rate.” (Chase) These extra jobs are usually in high demand and workers earn on average $14,000 more each year than other jobs with the same education requirements.

Electronics dominate the landscape today, fully integrated into our businesses and institutions. Many people carry a portable computer with them in their pocket or bag. “The urge to miniaturize (electronics) was motivated by NASA’s need to shave weight off of the payloads. Because every extra ounce you have to take, you pay a huge cost in fuel. Right now it’s like $10,000/pound to get something to low-Earth orbit.” (Tyson, Neil. Invest in NASA…)And because of this our electronics have become smaller, more powerful, and cheaper. Many of these technologies are called Spinoffs, and NASA has created so many of these spinoffs they publish an annual report highlighting breakthroughs and applications of their technology in various industries. In a study done by The Tauri Group,“116 (companies) provided estimates of revenue related to NASA spinoff activity. Of those, 39 respondents’ data could be used to derive annual estimates. Analysis of these data indicate the median annual revenue per spinoff per year is $1 million.” (Tauri Group)

In the 1960s, the US Airforce launched the first GPS satellite , at first it was inaccurate and unresponsive. NASA engineers then wrote the software that increased the accuracy in these devices which paved the way for our modern GPS apps. “ Between the mid-1990s and the mid-2010s, GDGPS (GPS Software) technology and data were at the heart of three technological revolutions with broad societal benefits... This was followed by the broad industrial application of corrected GPS, especially for precision agriculture. ‘And finally came its widespread usage to enhance the safety and utility of geolocation for mobile wireless users.’” (NASA. Spinoff 2019) GPS is essential in our modern infrastructure and many businesses rely on it heavily, including transportation, surveying, and weather forecasting. Most Americans no longer carry maps with them, opting for apps they can download. Moreover, emergency responders can now trace a 911 call to a caller’s precise location, which will follow them as they move.

The people who develop these technologies and work at NASA are usually in a science, technology, engineering, or a math-related field. Also called STEM, these are workers who drive competitiveness and advance our nation. Engineering is the most prominent STEM field, around 13.5 million jobs, requiring highly-skilled and knowledgeable workers; science is next at 12 million jobs. Also, “the STEM workforce is projected to grow by at least 2.5 million workers by 2026.” (Joint Economic Committee Democrats, Ten Ways STEM…) In addition, “computer-based occupations are projected to increase by 12.5 percent from 2014 to 2024, resulting in nearly half a million new jobs. “ (JEC) These jobs are all in addition to replacing an aging workforce. STEM engagement is a great campaign to encourage youth to become involved in the sciences, and also to empower women, minority groups, and other underrepresented people to pursue careers in these industries.

“Women in STEM earn 33 percent more than women in non-STEM jobs. But despite filling nearly half of all jobs in the United States, women hold less than one-fourth of all STEM jobs.”(JEC) NASA’s STEM engagement program tries to reach out to women and minorities specifically to spark interest in these fields. NASA’s mission back to the moon, Artemis, the sister of Apollo, is going to have a female commander who will be the first person since the last Apollo mission to walk on the surface. It was only “thirty-five years ago, Russian cosmonaut Svetlana Savitskaya became the first woman to perform a spacewalk in July 1984. Shortly after breaking that cosmic “glass ceiling,” in October 1984, NASA astronaut Kathryn Sullivan did the same. Over the years, 65 women have had the opportunity to fly in space, forever influencing human space exploration.” (Ramji, Nilufar. Women in STEM) And also inspiring countless young women to reach for the stars and follow their dreams.

This 2020 original budget request for NASA “ regarding returning United States astronauts to the surface of the Moon by 2024” (Trump, Donald. Budget Amendment 2019) also “proposes termination of funding for NASA’s Office of STEM Engagement, including its portfolio of grants and cooperative agreements and redirects funds to NASA’s core mission of exploration.” (NASA, FY 2020 Budget Estimates Briefing...) This proposal was denied by the House Appropriations Committee, who then increased funding for the offices of STEM and Science. NASA Administrator Jim Bridenstien said in a recent congressional hearing “We have a broad STEM agenda that is funded in a whole lot of different ways”(Bridenstien, Jim. Testifies on FY2020 Request) when pressed on STEM funding, also commenting on a recent NASA sponsored competition. “That is an amazing program that has paid dividends for NASA and, in fact, for the country” (Bridenstine)

NASA has provided hundreds of eligible students with grants and scholarships, and through their engagement with communities retain higher than usual returns. “A review of the H-1B training grant program found that almost all enrollees were in STEM fields and that the number who dropped out before completing training was very low (1,238) compared with the number that completed training (7,646).” (Rothwell, Jonathan. The Hidden STEM Economy) Space and rockets are gateway sciences that get young people interested and NASA, a widely respected source of scientific information, should be a brand that promotes education and curiosity.

Many STEM jobs are in the heavy industry and manufacturing sectors of our economy and most jobs in those sectors require some STEM knowledge to perform. And “30 percent of today’s high-STEM jobs are actually blue-collar positions.“ (Rothwell) But, NASA not only inspires, it innovates, and has tremendously benefited industry and manufacturing. By developing and researching technologies in robotics, 3-D printing, and off-world mining, NASA is leading in revolutionizing our future and building the foundation for space businesses to thrive.

Most NASA space missions require the use of robotics, and have developed countless robotic devices to perform specific tasks. NASA has launched small probes to the far reaches of our solar system and also constructed humanoid robots that interact with astronauts on the International Space Station. The Curiosity Rover currently operating on Mars, is a SUV-sized fully programmable multi-function robot, which has hundreds of servos, motors, and tools, that allow it to sample, test, analyze, and transmit data back to Earth. The electronics have to be durable enough to withstand the harsh environment and powerful enough to maintain all of its systems. NASA engineers have to develop these systems for the reliability of the mission, but once added to the market, the various applications start to unfold.

In 2015, NASA’s Jet Propulsion Lab (JPL) made the license of their RoboSimian utility robot available as part of a package deal. A company called Motiv licensed the deal to further develop the product for commercial use. And according to NASA’s Spinoff , “Motiv’s target clientele for the robot is any company or organization that does work in hazardous environments— from disaster relief to the oil and gas industry—where it can stand in for a human… The company’s engineers are developing tools like a power-washing attachment for the robot arms, according to the needs they hear from potential users. Military applications like bomb disposal represent another possibility” (Spinoff) Needless to say that the robotic technologies NASA has helped produce also have many applications for manufacturing, automation, and safety.

3-D printing is another innovation that is revolutionizing manufacturing and building technology. NASA is currently interested in 3-D printing structures on the moon and on Mars, using materials locally available in those areas, also called in situ resource utilization. Building these livable structures requires a vast amount of research and testing, which leaves valuable data that can be used by both private and public companies. NASA is also using this technology to 3-D print tissue for organs in microgravity and is currently the only organization able to do so. Gravity, on Earth, causes the bottom layer of the skin to flatten; deforming the structure. This also opens up new possibilities for food production in space and on earth. Where “unflavored macronutrients like protein and starch would be stored as dry powders and fed directly to the 3D printer, where oil or water would be mixed in at the printhead. The micronutrients and flavors, stored in packets as liquids or pastes, would then be delivered by inkjet.” (Spinoff) These technologies are already percolating in our society and are ultimately enhancing our economic potential.

“The financial motivation to mine space is much like the motivation that existed to mine the Western Frontier in the 1800s. ‘Modern industry relies on natural resources to perpetuate and grow.’ Discovery of resources, such as oil and natural gas, created wealth not only for those who extracted the resources but also for the many industries who could use the resources.” (Shaw, Lauren. Asteroids, the New Western Frontier…) Many experts believe that the first trillionaires will be those who mine asteroids and comets. But, NASA been there all ready, having visited many objects that are found in our solar system and surveying their composition. This catalog of information about near earth objects (NEOs) and what they are made of will be vital for anyone looking to extract ores from their surfaces. Many of these objects contain platinum group metals, like gold, which are rare or difficult to harvest on Earth but can be abundant in the cosmos. There is now access to resources that are practically non-existent on our planet, such as helium-3, which can produce low-cost efficient energy. Water ice is another commodity that will be highly valued in space economies. “Water is not only necessary to sustain life, but it contains that other necessity, oxygen, which along with water’s other ingredient, hydrogen, can be turned into a common rocket fuel: liquid hydrogen oxidized by liquid oxygen.” (Spinoff) Of course, NASA with their experience will be the ones to likely fund the first expeditions and then pass the knowledge to industry and business.

Many companies are trying to get ahead of this difficult game,“Stone Aerospace, which was the recipient of a $4 million, four-year NASA contract to develop an ice-drilling robotic probe that would be used to obtain samples from Jupiter's moon, Europa.”(Shaw) Planetary Resources Inc has made large strides towards mining asteroids and seeks to "fuel the in-space economy" with water ice while increasing Earth’s GDP. Shackleton Energy company, wants to be the first to harvest ice on the Moon to produce propellant. Moreover, Space X’s “developments in reusable spacecraft, in tools used for gathering data on the material compositions of space bodies, and in alternative means of obtaining fuels, such as the ability to refuel at orbital propellant depots, are all presently multiplying, thereby driving down the costs of exploring and commercializing space.” (Shaw) NASA helps accelerate these business providing an infrastructure to launch vehicles into space, and having done the research and calculations to reach these valuable destinations.

“An input/output analysis using IMPLAN (a widely used input-output modeling software) shows that every dollar NASA spends on employees, businesses, universities, and others generates $2.60 of output in the economy, as compared to the federal non-military average of $2.30 and the federal military average of $2.00” (Tauri) Buzz Aldrin notes in his book, Mission to Mars that the space industry has been growing at a rate of “12.2 percent and five-year growth of 41 percent in a global economy that has been suppressed in many other sectors… The 12.2 percent increase is calculated on a 2010 total of $258.21 billion.”(Aldrin, Buzz. Mission to Mars) Buzz also notes that governmental space spending grew at 6% globally which is comparable to the Tauri Group analysis.

“For pennies on the dollar, the space program has improved our lives, advanced our society, strengthened our economy, and inspired generations of Americans. And I have no doubt that NASA can continue to fulfill this role.” (President Barack Obama April 15, 2010, Kennedy Space Center) Going above and beyond the call of duty, NASA impacts the lives of millions, and drives technology, science, and education forward. It’s positive influence of the United States GDP is a result from all of the sectors in our society that its technology benefits. Many companies would never do the things NASA does because they either have no funding or they see no ROI, but NASA researches and innovates pushing the bar of human potential higher and higher.