NASA Space Loan Guarantees are “Dead on Arrival”

NASA Space Loan Guarantees are “Dead on Arrival”

Los Angeles, CA, June 10, 1998 – The Space Frontier Foundation today pronounced the idea of the National Aeronautics and Space Administration (NASA) providing government-backed loans to builders of space vehicles “Dead On Arrival” with the American taxpayer. The space agency has publicly proposed using taxpayer funds to underwrite what could end up being billions of dollars in loans to firms building new space launch vehicles. This is one of the many proposals that are aimed at speeding the transition from today’s government-owned Space Shuttles to the era of commercially owned and operated space fleets.

“Federal loan guarantees sound nice, but they are a bad idea that will wreck the embryonic reusable space transportation industry by warping the market and stifling innovation,” says Foundation President Rick Tumlinson.

Although loan guarantees are being proposed by some at NASA as a way to help all companies, the Foundation believes that this subsidy will actually serve to prop up bad projects and could unfairly stack the deck against smaller and more innovative firms.

“The government has no business picking winners and losers in this new industry, and that is exactly what this plan does,” stated Tumlinson. “If Wall Street looks at a company’s business plan and says ‘No,’ then why should the taxpayers be asked to change that to a ‘Yes’?”

Currently, taxpayers spend over $10,000 per pound of payload launched into space on the Space Shuttles and other traditional vehicles. The Foundation firmly believes that the transition of all space transportation to the private sector is the only way to radically reduce the cost of access to space, and it is currently working with several space transportation firms to develop government catalysts and incentives that will support the rapid development of this new industry at no cost to the taxpayers.

“Federal loan guarantees are a bad idea because of what will happen to the firms who don’t get any support,” continued Tumlinson. “There are several privately-financed U.S. companies currently developing new space ships out there, and most are opposed to this idea. For them the rule is fair and open competition. And that is good for America.”