Inflation, NASA’s budget, and ambition

Inflation is a hot topic in the news of late. This is to be expected when daily experience brings a far-off abstraction home for a visit. Also unsurprisingly, this phenom happens more so when the news is terrible. A price dropping is fodder for a moment of amazement, good company with a happy grin about what things may come. The cocktail party chatter passes quickly about the beautiful new TV picture, the terabytes in the cloud, or the music service with every song ever sung. Soon, it wraps with a joke about the robot folding your clothes or the AI that will declare us obsolete in a nanosec. It’s coming soon (or 10 years away, for the last 50 years). Yet the same conversation around the steak, that car or the gas, when prices shoot up, goes on with no end. As the idiom goes – or Amazon reviews – treat me well, and I’ll tell 10 people, but treat me poorly, and I’ll tell 100. And inflation has been mistreating many people. In all this, not making the list of goods and services in some imaginary basket, lies space exploration.

No, not that inflation after the big bang when space expanded exponentially. Fascinating as this is. Instead, the other inflation, where NASA’s yearly budget is, in reality, dropping because of prices increasing. Credit: NASA

There’s a price for space exploration, even if we have trouble seeing it and tracking it like a dozen large Grade A eggs. Making matters worse, space exploration is many things, from robotic probes, to human spaceflight, from low Earth orbit, to our local planetary system, all mixed and matched. If inflation is a change in the price of something, imagine getting a handle on it when it’s for something moving faster and further by orders of magnitude than nearly anyone will ever experience. Add in an ample dose of ambition because whatever we did or explored last guarantees advocacy for something different next time. After all, who wants the same cellphone they had before or the same telescope.

A few weeks ago, Congress finally approved NASA’s budget for 2022, nearly six months into the fiscal year (better late than never?) It’s easy to imagine a few cheers over the added three-quarter billion dollars compared to 2021. That’s a billion, with a “b,” hardly money to sneeze at. Like going as fast as a probe to Jupiter or as far as Pluto, nearly a billion dollars is also unimaginable. But that’s only a 3.3% budget increase for NASA in 2022 vs. 2021. Except, enough to pop anyone’s bubble, it’s expected inflation in the broad economy will run at least two to three times that. Inflation for 2022 is now on target toward 8%. Lest we forget, NASA also got a nice budget increase in partial-maybe-post pandemic year 2021, 2.6%. Yet again, inflation in the broader economy for 2021 ran around 7%. Now, the NASA Inflation Indices usually track the overall US economy’s measure of inflation relatively close (but not exactly.) What will we make of 2021 and 2022?

The NASA Budget since 1995. For 2021 and 2022 inflation adjustments of 7% and 8% are applied to calculate NASA’s purchase power. This will likely prove closer to the mark than the official NASA Inflation Indices for these years which are still at 2.3% and 2.4%, and identical to pre-pandemic estimates. This NASA Budget chart will see regular updates – here. Credit: Edgar Zapata, zapatatalksnasa.com

It’s enough to say upward adjustments in the NASA Inflation Index will likely follow, or if they don’t, convincing explanations must follow instead. Basically, by this indirect logic about recent inflationary trends, NASA’s budget was cut quite a lot in the last two years. Not that inflation estimates ever make too much sense. But they are helpful – with the correct dose of salt. For example, it’s well established that car with a bazillion airbags and gizmos gets its inflation-adjusted price moved way downward before comparing to a car 25 years ago. Why after this, there is hardly any inflation there! Even if you can’t buy a car without those features, this is so. (Seemingly not yet explored by economists is adjusting the price of that car 25 years ago way upwards for all the pollution it generated, a cost to the environment and our healthcare.) The more well-honed critique is just how divorced the indices become from practical experience, the cost of living. As well, it seems no one at the Bureau of Labor Statistics is in a rush to adjust the price of air travel upwards for everything that’s been subtracted from the travel experience today vs. 25 years ago. But, at least towelettes of a sort made a momentary return – for the worse reason – before disappearing again.

This is an incomplete and overly wonkish talk, suitable for a few yawns, without mention of ambition. It’s a cliché of NASA projects, mentioned in audits as if to get the topic out of the way before moving to new problems, that projects over-promise results and under-estimate costs. What can we say? We engineers are optimists. Given a problem, we will find a solution, or at least make a career out of trying every possibility. (Final Report Conclusion: This is an inter-generational task.) 

Ambition is natural. It costs nothing in the near term to say we will go farther than before or to fudge a little about how it can be done for less. This is, in a sense, deflation – a rare bird once thought on the verge of extinction until recently. There were occasional sightings, even high-resolution pictures, only it turned out these projects merely tossed out the kitchen sink they promised early on. But, of course, reductions in scope, the science instruments deleted from your cart, are not the same as deflation. (The International Space Station, when it was Space Station Freedom, showed a version of this syndrome. Nonetheless, sometimes reality can still inspire as much as any dreams of yesteryear.)

Deflation is not only another abstraction talked about more than understood. It may be the saving grace when looking at NASA’s seemingly ever declining purchasing power.

This brings us to real deflation. Not doing less for less, but instead doing ever more for less. As the Red Queen told Alice, – “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” Deflation is not only another abstraction talked about more than understood. It may be the saving grace when looking at NASA’s seemingly ever declining purchasing power. This is so, as inflation adjustments are telling us, every year, NASA seems to have less money than before, more or less. Recently, NASA again announced additional firm-fixed-price contracts, this time to get crew to the International Space Station.

Considering that NASA had no appreciable commercial spaceflight contracts driving prices down fourteen years ago, it’s worth highlighting that these are now the trend. Multiple layers of NASA’s budget (above), from cargo and crew to the ISS, to lunar landers, to parts of a Gateway at the Moon, to launches for multiple purposes, are now firm-fixed-price. These are commercial, genuinely competitive, and far below the costs anyone would predict based on history and business as usual.

If your purchase power is in decline, it would seem the advice of the Red Queen is being taken to heart. Adapt, evolve, and maybe you can run fast enough to hold your ground. Do this twice as fast, and you might even go anywhere.

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