Monday, September 14, 2009

The Economics of NASA?

Wow, it appears I am not the only engineer interested in economics. Nate, where have you been all my life?

I worked for one of my professors this summer, technically under the auspices of the Alaska Space Grant Program, designing a ground control station for satellite tracking. Sounds very technological and impressive, doesn't it? Let me put it in more simple terms: I spent NASA's money this summer. Antennas, rotators, radios, LNA's, a computer etc.

Apparently the Alaska Space Grant has "left-over" money from a previous grant that needs to be spent or it "disappears" (reverts back to NASA). Because of this I was told not to skimp on equipment. I shelled out some hard cash for quality components.

What does this have to do with incentives, or even economics? Well, being a student I am in the permanent college saving mode. I frequently would try to figure out ways to save costs on equipment but was told to go ahead and spend the extra money because it was in the budget. There was no incentive to save money because it was grant money that had to be spent. This was good news for my project, but got me thinking about government spending.

It's easy to think that it's not a big deal because it's NASA's money and they have a LOT of money. But where does NASA get their money from? The government. Who gets it from taxpayers...hmmm. Starts to get closer to home.

This seems pretty typical for government spending, it's not the most conservative or efficient system out there. How could incentives be provided to make government spending more efficient? (Hint: privatize!) Could NASA be sold to a private company? Should the government contract out it's space program?

Anyway, this is what I've been thinking about in response to the reading. I'm looking forward to the discussion on Thursday!

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