SpaceX Rocket Failure Cost NASA $110 Million

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SpaceX Rocket Failure Cost NASA $110 Million

Posted by Soulskill on Friday July 10, 2015 @07:15AM from the switch-to-Crazy-Eddie's-Discount-Rockets dept.

An anonymous reader writes: On June 28th, a SpaceX Falcon 9 rocket exploded just over two minutes into its attempt to reach the International Space Station. It was a contracted mission from NASA to resupply the astronauts living there. Today, NASA associate administrator William Gerstenmaier said the price tag to taxpayers for that failed launch is $110 million. SpaceX is leading the investigation into the cause of the failure, and NASA officials faced tough questions about whether private companies should be allowed to direct investigations into their own failed launches. A similar inquiry is underway at Orbital ATK. NASA inspector general Paul Martin said his office is looking into the matter. Gerstenmaier added that NASA is thinking about making these companies take out insurance policies that would cover the cost to taxpayers in the event of another failure.

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as always.... by Anonymous Coward · 2015-07-10 07:19 · Score: 5, Insightful

"Privatize the profits, socialize the risks."
That's how big business works in the USA.
1. Re:as always.... by w1zz4 · 2015-07-10 07:30 · Score: 1
  
  God dammit I do not have any mod point left! I can tell you this is the same thing in Canada eh! And then they privatize walfare services because you know, we can't afford that...
2. Re: as always.... by Anonymous Coward · 2015-07-10 07:32 · Score: 1
  
  My thoughts exactly. Doesn't matter if it was Space X, Lockheed, or Boeing. They'd all make it like bandits.
3. Re:as always.... by Anonymous Coward · 2015-07-10 08:03 · Score: 1
  
  People seem to forget that insurance money come from somewhere. The cost of insurance is PROFIT to private insurance organisation + the cost of the risk of what is insured !
  So, insured rocket launch and take payer might pay double the price for every launch in case one fail and insurance have to pay for it !
  So instead of losing that money into a lost launch, we would spend EVEN MORE money to an insurance so we can make people happy that we didn't 'lose' the money for that launch... Even if we did wasted much more money overall !
4. Re:as always.... by fnj · 2015-07-10 08:04 · Score: 1, Informative
  
  STFU, anonymous cipher. You amount to nothing because you don't have a backbone.
5. Re:as always.... by Joce640k · 2015-07-10 08:05 · Score: 1
  
  How many F35 test flights is $110 million?
  
  --
  No sig today...
6. Re:as always.... by Coren22 · 2015-07-10 08:11 · Score: 3, Insightful
  
  My curiosity is who at NASA is responsible for the insurance not being bought. Does a private company hold NASA responsible for failed launches (when they were launching), or is it the private company's responsibility to buy launch insurance?
  
  --
  APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
7. Re:as always.... by suutar · 2015-07-10 08:13 · Score: 1
  
  I wonder what the cost to taxpayers would be if NASA were doing their own development and had a similar explosion.
8. Re:as always.... by NoNonAlphaCharsHere · 2015-07-10 08:20 · Score: 5, Insightful
  
  Nonsense. Utter bullshit. Blaming "big government: we need to cut it back" is exactly what got us into this mess. Ronald Reagan is the FATHER of the disaster that confronts us
  
  Big businesses have no way of socializing risk by themselves.
  
  Go tell that to the belching smokestacks, the carcinogen-laced groundwater, the deteriorating climate, the poisoned oceans. Tell it to the minimum wage workers who have to go on food stamps, the students with crushing loans and no job prospects, the retirees who've lost their savings to yet another bankster stock swindle. Tell it to the vanishing middle class, whose wages have been flat for forty years while productivity and the wealth of the 0.01% has soared.
  
  Big businesses can socialize risk only in collusion with big government.
  
  If you mean by corrupting government to avoid regulation of evil behavior, then I agree with you completely.
  
  "Privatize the profits, socialize the risks."
  That's how big government works in the USA and elsewhere.
  (emphasis mine)
  
  I would be FASCINATED to hear your logic as to why government would seek to privatize (i.e. lose money) profits in order to socialize (i.e. lose money) the risks.
  
  And the solution to this problem isn't to regulate big businesses more (that only makes the problem worse) but to cut back the culprit, big and powerful government.
  
  So you're saying the solution to this problem is to allow MORE of this kind of behavior.
  
  My god, you are so utterly delusional, there are no words to describe it. You would have more intellectual integrity if you posted in rabid favor of aroma therapy and woodland elves.
9. Re:as always.... by rwa2 · 2015-07-10 08:27 · Score: 4, Insightful
  
  I don't think NASA does insurance because it's a business decision and NASA isn't a business.
  The DSCVR launch was delayed because the Air Force (which is run more like a business) insisted on taking out an insurance policy on the SpaceX launch. They were involved because they were paying for it, since DSCVR was sort of an odd collaboration between NOAA, NASA, and the USAF.
  Spacecraft insurance is expensive since the insurance actuaries actually want comprehensive statistical data on each launch vehicle, and that's simply not available on new launch vehicles with less than ~21 (remember the threshold for statistical significance?) launches.
10. Re:as always.... by Anonymous Coward · 2015-07-10 08:45 · Score: 1
  
  I think the logic goes something like this: lobbyist shows up with suitcases full of cash, government decides to privatize profits and socialize risks.
11. Re:as always.... by njnnja · 2015-07-10 09:03 · Score: 1
  
  I'm not sure that is what is happening here. It seems reasonable that a rocket owner will refuse to take liability for the stuff on the rocket, since a rocket blowing up is not uncommon. So they basically say, "you can send stuff on our rocket at your own risk." Maybe the satellite owner should go out and buy insurance, but if it was up to the rocket owner to buy the insurance they would just pass that exact cost on to the payload owner (making the payload owner pay for the insurance indirectly).
  
  So the question is, if a Boeing (or whatever) satellite was destroyed on a NASA rocket that blew up, did NASA reimburse Boeing for the damages, or was it the same as here? And then, if it is always the payload owner who bears the risk, should the US government buy insurance? I think the answer to that is no, since the cost of insurance will have to be greater than the expected cost of actual losses in the long run, and the government can afford to self-insure in this case.
12. Re:as always.... by Anonymous Coward · 2015-07-10 09:22 · Score: 1
  
  That has to be the most ludicrous statement I have heard. Big business regularly tramples on the rights of individuals, like the rights to a clean environment, privacy, free speech, fair pay and work conditions. The only way individuals can defend against such organizations is to form organizations themselves with their own representatives, which is called government or should be. The problem America has is government is formed not on the will of the people, but the desires of those that control the most money, a select few and with them big business.
13. Re:as always.... by MightyYar · 2015-07-10 09:29 · Score: 5, Insightful
  
  How would insurance save money? Another middle man to pay. The only justification for insurance is when you need to smooth out the bumps in your spending - an individual may not have $30,000 sitting around to replace their crashed car. NASA can almost always slip a schedule; self insurance makes a lot of sense for them.
  
  --
  W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
14. Re:as always.... by Loopy · 2015-07-10 09:33 · Score: 1
  
  Your insinuation that it doesn't work that way everywhere else (just with less transparency and less ability to say anything about the people doing it) is illuminating.
15. Re:as always.... by NostalgiaForInfinity · 2015-07-10 09:35 · Score: 1
  
  I would be FASCINATED to hear your logic as to why government would seek to privatize (i.e. lose money) profits in order to socialize (i.e. lose money) the risks.
  Simple: because politicians and government employees aren't selfless saints. Instead, they are corruptible, limited human beings primarily concerned with their own careers, reputation, and financial success. Among other things, they respond very well to lobbying.
  
  Go tell that to the belching smokestacks, the carcinogen-laced groundwater, the deteriorating climate, the poisoned oceans. Tell it to the minimum wage workers who have to go on food stamps, the students with crushing loans and no job prospects, the retirees who've lost their savings to yet another bankster stock swindle. Tell it to the vanishing middle class, whose wages have been flat for forty years while productivity and the wealth of the 0.01% has soared. [...] My god, you are so utterly delusional, there are no words to describe it.
  So, after decades of federal student loan programs, vastly expanding welfare and retirement programs, the war on poverty, numerous programs purported to help the middle class, all the kind of big government programs you favor, you yourself observe that people are worse off than before.
  The conclusion any reasonable person would draw is that these programs don't work. You have to be completely delusional to think that after such colossal failures, the right policy is to expand those programs even further.
16. Re:as always.... by NostalgiaForInfinity · 2015-07-10 09:41 · Score: 2
  
  The federal government frequently self-insures. If the federal government were a business and made rational business decisions, that would make financial sense, and that's how it's usual justified. In reality, though, probably it mainly self-insures because it makes the costs of various programs appear lower than it actually is.
  In any case, SpaceX's record doesn't seem to be that bad. I think a reasonable insurance premium based on their record might be 10-20% of launch cost.
17. Re:as always.... by Nethemas+the+Great · 2015-07-10 09:48 · Score: 2
  
  NASA negotiated the terms. There was no reason they could not have included an insurance requirement as commercial customers do. NASA should have. I'm not sure why they didn't but this isn't a SpaceX problem, nor a problem with commercial launch. If NASA was using their own vehicle (assuming they had one), not only would it have cost more for the launch, but the tax payer would have still been on the hook.
  These shameless attempts to discredit commercial launch providers and go back to status-quo, where the traditional MIC players provided everything are really getting wearisome.
  
  --
  Two of my imaginary friends reproduced once ... with negative results.
18. Re:as always.... by Paradise+Pete · 2015-07-10 09:53 · Score: 4, Insightful
  
  My curiosity is who at NASA is responsible for the insurance not being bought.
  
  Insurance is not magic. As the entity selling the insurance is making a profit, obviously purchasing insurance is a money-losing proposition, so its only function should be to mitigate disaster. Losing $110M is not a disaster, and therefore *not* buying insurance is the more responsible use of the taxpayer money.
19. Re:as always.... by msauve · 2015-07-10 09:57 · Score: 4, Insightful
  
  "NASA is thinking about making these companies take out insurance policies"
  
  Who do you think can make a better actuarial judgment of the risk, NASA or an insurance company? The government is certainly large enough to be self insured, which is in the long run cheaper than paying an insurance company which intends to make a profit to assume the risk.
  
  And, forcing the private launch service companies to take out insurance adds even more cost, by adding another level of administration to pass the money through.
  
  --
  "National Security is the chief cause of national insecurity." - Celine's First Law
20. Re:as always.... by sphealey · 2015-07-10 11:25 · Score: 3, Informative
  
  Just about every organization over $1 billion USD self-insures most risks, although this is not always apparent because they often use the processing division of full service insurance companies to analyze and process their transactions. True insurance policies from 3rd parties don't come free and beyond a certain size the universe of risk is the same for the organization as the insurance company.
  sPh
21. Re:as always.... by sphealey · 2015-07-10 11:31 · Score: 1
  
  = = = I would be FASCINATED to hear your logic as to why government would seek to privatize (i.e. lose money) profits in order to socialize (i.e. lose money) the risks = = =
  
  Consider the financial system meltdown in 2008. From 1990-2007 the large financial entities took trillions of dollars of profit for themselves. Part of the deal of capitalism is that when you have profit opportunities that big you willingly accept the concomitant risk including the possibility that should the risk actualize you will go broke and might go to jail. The risk actualized. The USG stepped in (along with the EU and UK), paid off the losses, and did not require the financial services firm and their executives to take any penalty at all; instead the government passed the cost on to the median taxpayer (43k/year income). That is allowing a supposedly capitalist/free enterprise to privatize profits (i.e. squeeze them out of the polity) while socializing risk (paying off huge private losses with tax money).
  sPh
22. Re:as always.... by sphealey · 2015-07-10 11:35 · Score: 1
  
  = = = vastly expanding welfare and retirement programs = = =
  
  The "welfare" programs that were in place from 1934-1996 no long exist, but even taking the succeeding limited programs under as successors "welfare" has been cut continuously from 1981 through to this day, including during the Obama Administration. Not sure where this breitbart myth of the luxurious "welfare" benefit and the t-bone steaks comes from but it has no basis in factual reality where PRWORA was passed in 1996 representing the ultimate capitulation of the neoliberals to Reaganism.
  sPh
23. Re:as always.... by kenai_alpenglow · 2015-07-10 11:54 · Score: 1
  
  Reported cost is $32K/hour. If a mission is 6 hours (sounds a little long, but let's go with it), that would be 573 missions.
24. Re:as always.... by NostalgiaForInfinity · 2015-07-10 12:15 · Score: 1
  
  As I was saying: If the federal government were a business and made rational business decisions, that would make financial sense, and that's how it's usual justified
  You seem to have missed the second part: the federal government isn't a business, NASA expenditures are subject to lobbying and crony capitalism, and hence third party insurance may be worth the cost, because a third party has a compelling interest to safeguard their own money. "Using the processing division" of an insurance company is not the same.
25. Re:as always.... by NostalgiaForInfinity · 2015-07-10 12:25 · Score: 1
  
  That's nonsense. Welfare spending has increased pretty steadily since the 1920's, from a fraction of 1% of GDP to 5% of GDP. You can also look at it on a per capita basis or in constant dollars, same result.
  The Heritage foundation has a pretty good article on the failure of the war on poverty:
  http://www.heritage.org/resear...
26. Re:as always.... by queazocotal · 2015-07-10 15:13 · Score: 1
  
  Likely well north of half a billion.
27. Re:as always.... by NoNonAlphaCharsHere · 2015-07-10 16:28 · Score: 1
  
  Oh noes!!! He "foe"ed me on Slashdot for calling out his bullshit!
  
  I would be FASCINATED to hear your logic as to why government would seek to privatize (i.e. lose money) profits in order to socialize (i.e. lose money) the risks.
  
  Simple: because politicians and government employees aren't selfless saints. Instead, they are corruptible, limited human beings primarily concerned with their own careers, reputation, and financial success. Among other things, they respond very well to lobbying.
  
  So you're agreeing with me when I said:
  
  Big businesses can socialize risk only in collusion with big government.
  
  If you mean by corrupting government to avoid regulation of evil behavior, then I agree with you completely.
  
  So it's not the big, bad gubment enforcing the regulations that's the problem, it's the corruption of those regulations.
  
  So, after decades of federal student loan programs, vastly expanding welfare and retirement programs, the war on poverty, numerous programs purported to help the middle class, all the kind of big government programs you favor, you yourself observe that people are worse off than before.
  
  The conclusion any reasonable person would draw is that these programs don't work. You have to be completely delusional to think that after such colossal failures, the right policy is to expand those programs even further.
  
  The conversation is about DE-REGULATION. The fact that you conflate
  de-regulation == Big Bad Government spending
  really isn't my problem. Meanwhile, if you'll recall, at the same time he was unfettering corporate greed and malfeasance, Reagan gutted all the programs you so bemoan. If you want to picture a world without government regulations, I suggest you look at Mexico or China or pre-USSR-collapse East Germany.
  
  I've read your other responses in this thread, and the conclusion that any reasonable person would draw is that you're a fool and/or a shill for the 0.01%, and not worth any further time.
28. Re:as always.... by electrosoccertux · 2015-07-10 17:05 · Score: 1
  
  "NASA is thinking about making these companies take out insurance policies"
  Who do you think can make a better actuarial judgment of the risk, NASA or an insurance company? The government is certainly large enough to be self insured, which is in the long run cheaper than paying an insurance company which intends to make a profit to assume the risk.
  And, forcing the private launch service companies to take out insurance adds even more cost, by adding another level of administration to pass the money through.
  but that's the whole point!!! pushing money through the stratosphere, not just into it. money is often refered to as liquidity because you can practically burn it like rocket fuel when
  eh, ideas stopped there
29. Re:as always.... by NostalgiaForInfinity · 2015-07-10 17:16 · Score: 1
  
  [You:] If you mean by corrupting government to avoid regulation of evil behavior, then I agree with you completely. [You again:] So it's not the big, bad gubment enforcing the regulations that's the problem, it's the corruption of those regulations.
  No, neither. The problem is that the regulations themselves are corrupt; that is what "regulatory capture" means.
  
  The conversation is about DE-REGULATION.
  No, the conversation is about who is responsible for "privatizing profits and socializing risks". It's a simple, obvious fact that private businesses cannot socialize risk by themselves; they simply don't have the legal means for doing it. The only way that tax payer dollars can be used to insure companies against loss (socialize their risk) is through the action of politicians or government bureaucrats.
  You tried to turn this into an argument about regulation in general, and you got that wrong too.
  
  I've read your other responses in this thread, and the conclusion that any reasonable person would draw is that you're a fool and/or a shill for the 0.01%, and not worth any further time.
  Your delusions are common among a sizable number of Americans, the biggest constituency being progressives. I know exactly where you are coming from because I used to be a progressive myself.
  
  I suggest you look at Mexico or China or pre-USSR-collapse East Germany.
  
  I used to live in pre-USSR-collapse East Germany. It was one of the most highly regulated nations in the world.
  
  Oh noes!!! He "foe"ed me on Slashdot for calling out his bullshit!
  Don't flatter yourself. I use the "foe" tag just to mark people with your kind of views, mostly to follow what the latest talking points and delusions are in the progressive political sphere, and to have to stop wondering whether you are being serious or sarcastic.
30. Re:as always.... by KGIII · 2015-07-10 18:45 · Score: 1
  
  I do not spend my mod points. Not very often and not in a long time. I just do not give a shit. Browse at -1. Filter the trash in your head.
  
  --
  "So long and thanks for all the fish."
31. Re:as always.... by Pikoro · 2015-07-10 22:14 · Score: 1
  
  Off topic but:
  You do realize that the point of the moderation system is not to reward people with good posts and punish people who post badly, but to bring the most relevant, interesting, and insightful posts to the forefront. Basically to cut out the crap.
  So by not modding up ACs who make good points, you are not helping the discussion at all. You are hindering it.
  
  --
  "Freedom in the USA is not the ability to do what you want. It is the ability to stop others from doing what THEY want"
32. Re:as always.... by Demonoid-Penguin · 2015-07-10 22:46 · Score: 1
  
  I browse at -1 and I mod by quality and relevance of comments. If you're moderating by username, AC or otherwise, you're effectively performing a continuous ad hominem.
  I read and moderate at -1. Gold, like the truth, is where you find it. i.e. plenty of stupid and just plain wrong gets moderated up, likewise facts, insights, and interesting posts can be found at below 1. Sometimes the most insightful is moderated down as a troll or overrated, by those with a warped agenda (and more than one account).
  I'm all in favour of removing the troll tag - let other readers provide context to indicate a troll (or stupid) posts. Tags and ratings aren't reliable - just useful for those the want to censor, and they're no substitute for clear thinking and fact checking.
  As for ad hominem - it's a frequently misused term. It's a form of argument that attacks the arguer instead of the argument.
  Not moderating someone on the basis of username is not an "ad hominem" attack. Which is not what you said - but it is what the OP you're replying to said. There are plenty of occasions when the character of someone is relevant. Even when it's not relevant the merits of an argument should be based on the argument - not the opinion of the arguer. Or all arguments will be won by honey-tongued sophists.
  If someone posts something ignorant or stupid - they are ignorant and stupid, it's the context of ad hominem that determines whether it's wrong (a bad argument) or not. e.g. if someone argues that they make the sun come up, and you call them an idiot and challenge them to make it come up at noon tomorrow - it's not an ad hominem. Just calling them an idiot is.
  There are two forms of ad hominem argument: a cowardly form - the fallacious analogy e.g. "Smith has proposed we should go on a sailing holiday, though he knows as much about ships as an Armenian bandleader does." (Perhaps you do not need to know all that much for a sailing holiday. Smith can always learn. The point here is that the comparison is deliberately drawn to make him look ridiculous. There may even be several Armenian bandleaders who are highly competent seamen.); and the less subtle abusive analogy - as a direct attack in lieu of facts to support and argument, e.g. "Dr Green argues very plausibly for fluoridation. What he doesn't say is that he is the same Dr Green who ten years ago published in favour of both euthanasia and infanticide". (Unless his argument is that fluoride will kill off the old people and infants more effectively, it is hard to see how this bears on the arguments for or against fluoride.)".
33. Re:as always.... by Demonoid-Penguin · 2015-07-10 22:49 · Score: 1
  
  Big business by itself doesn't work that way. Big businesses have no way of socializing risk by themselves.
  Big businesses can socialize risk only in collusion with big government. So, the determining factor of socializing risk isn't whether a business is big, but whether government is big and whether government has the power to socialize risk.
  So, your statement would be more accurate as:
  
  "Privatize the profits, socialize the risks."
  That's how big government works in the USA and elsewhere.
  And the solution to this problem isn't to regulate big businesses more (that only makes the problem worse) but to cut back the culprit, big and powerful government.
  And for this some arse clowns have moderated you troll... which speaks volumes of their intelligence and integrity. And just reinforces my (earlier stated) reasons for reading at -1 and wanting to see the removal of the troll tag.
34. Re:as always.... by Demonoid-Penguin · 2015-07-10 23:03 · Score: 1
  
  That's nonsense. Welfare spending has increased pretty steadily since the 1920's, from a fraction of 1% of GDP to 5% of GDP. You can also look at it on a per capita basis or in constant dollars, same result.
  The Heritage foundation has a pretty good article on the failure of the war on poverty:
  http://www.heritage.org/resear...
  I'd be curious to see how much of that money actually gets to the recipients. The cost of unemployment welfare is often touted by our government (Oz) as reason for cutting it - while deceitfully hiding the true unemployment figures (work for the dole and/or "training" is compulsory - and "participants" are not counted as unemployed) and failing to mention that the bill for "administration" (much of which winds up in private enterprise) is a much larger cost. Failing to consider the costs if welfare didn't exist is another barrel of rotten fish.
  I'm unconvinced by the rising level of people on welfare and welfare as a cause. But I admit to being biased by the number of times I've been stiffed by business that went (profitably, through sleight of hand) bankrupt (*cough* Geoff "back again" Hewatt *cough* and *cough* Urban Contractors *cough*) due to "unforseen circumstances" that a blind man could have seen coming.
35. Re:as always.... by findoutmoretoday · 2015-07-10 23:08 · Score: 1
  
  Insurance saves money when you know that 20% of the effort gives 80% of the result. Another 20% to pay the insurance and with 40% of the cost you get 100% revenues (in theory).
36. Re:as always.... by onthemightofprinces · 2015-07-11 00:54 · Score: 1
  
  Please, they have some class. It's more like elected official does exactly what the lobbyists want; two weeks after leaving government, former official is mysteriously appointed to a highly paid position in the company that lobbyist worked for.
37. Re:as always.... by rch7 · 2015-07-11 01:11 · Score: 1
  
  Insurance is not charity. In the end you pay the same money you can actually loose plus hefty extra for profit. There is no point to pay for insurance if you can handle potential loss on your own.
38. Re:as always.... by MightyYar · 2015-07-11 01:49 · Score: 1
  
  The original bids almost certainly would have been higher if insurance was required. It's also not clear that insurance would be available (at a reasonable price) for such a new spacecraft. There is no way that one can save money by purchasing insurance unless they aren't in the game long enough to average out the catastrophic events. NASA should be in the space game for a while, I think.
  
  --
  W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
39. Re:as always.... by MightyYar · 2015-07-11 01:55 · Score: 1
  
  I have both liability and collision.
  
  --
  W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
40. Re:as always.... by NostalgiaForInfinity · 2015-07-11 04:02 · Score: 1
  
  I'd be curious to see how much of that money actually gets to the recipients.
  That sounds as if you think that somehow invalidates the analysis; actually, it strengthens it: the fact that a lot of that money does not reach the recipients is not only an unavoidable consequence of these programs, it's what drives much of the increase in welfare and its failures in the first place.
  Roughly, a lot of the money intended to help people goes into financing government departments and private non-profits. These organizations then create programs that by and large are not very effective or even harmful. But you now have a large number of people whose livelihood depends on this funding, and who have a strong incentive to expand their organizations. Since their programs aren't working well, they then go back to Congress and ask for more funding, and since they are considered the experts, they often get it.
  
  I'm unconvinced by the rising level of people on welfare and welfare as a cause.
  Well, notice that "on welfare" is a shifting target: people "on welfare" these days receive a lot more than they did 50 years ago. So the rising level of people on welfare is in part simply due to changes in who we consider needy. If we applied the same criteria as half a century ago (or the same criteria as many others), a lot fewer people would receive welfare, and those that did would get a lot less of it. And, of course, a lot of the people whose work is related to welfare are lobbying for these increases.
  The increase in welfare spending has many causes. The harm that welfare spending does to its recipients is only one part, but it is probably the worst of it. As a society, wasting a few percent of our GDP on useless government programs isn't such a big deal; but using those programs to create a permanent underclass is morally wrong and economically destructive.
  (If you're asking for an alternative, I think German-style welfare or a basic income would be better choices.)
41. Re:as always.... by Demonoid-Penguin · 2015-07-11 04:58 · Score: 1
  
  I'd be curious to see how much of that money actually gets to the recipients.
  That sounds as if you think that somehow invalidates the analysis;
  No. I have no opinion on the subject. I'm curious as to what the percentage is - there doesn't seem to be a publicly available figure for this country. Just opinions. I'll wait until I have figures until I form an opinion.
  
  ... actually, it strengthens it: the fact that a lot of that money does not reach the recipients is not only an unavoidable consequence of these programs, it's what drives much of the increase in welfare and its failures in the first place.
  Roughly, a lot of the money intended to help people goes into financing government departments and private non-profits. These organizations then create programs that by and large are not very effective or even harmful. But you now have a large number of people whose livelihood depends on this funding, and who have a strong incentive to expand their organizations. Since their programs aren't working well, they then go back to Congress and ask for more funding, and since they are considered the experts, they often get it.
  That's my suspicion. Based on my experience with organisations. I can't think of any that finished the financial year with unspent budgets. Few that don't return to the government every year asking for more money, and none that don't find ways of spending an increased percentage on administration and "programs" - both of which don't increase the percentage received by the intended recipients. Worse is the thing called "work for the dole" - where taxpayers fund government departments to administer funding for private (prosperous) "non-profits" to run programs that provide welfare recipients to "for-profit" companies as unpaid staff - supposedly to create "work opportunities". The cost to administer those programs, the cost to competing businesses that pay legal wages, and the cost to the economy don't seem to be available to the public.
  
  I'm unconvinced by the rising level of people on welfare and welfare as a cause.
  Well, notice that "on welfare" is a shifting target: people "on welfare" these days receive a lot more than they did 50 years ago.
  I guess that applies here to - it's pegged to the CPI.
  
  So the rising level of people on welfare is in part simply due to changes in who we consider needy. If we applied the same criteria as half a century ago (or the same criteria as many others), a lot fewer people would receive welfare, and those that did would get a lot less of it. And, of course, a lot of the people whose work is related to welfare are lobbying for these increases.
  That happens here - but the lobbying from the social welfare sector is largely ineffective.
  
  The increase in welfare spending has many causes. The harm that welfare spending does to its recipients is only one part, but it is probably the worst of it. As a society, wasting a few percent of our GDP on useless government programs isn't such a big deal; but using those programs to create a permanent underclass is morally wrong and economically destructive.
  No disagreement there - though I find the late trend of saying that poverty is a choice morally offensive. Particularly to when considering those that wear their underpants on the outside. I don't know of a solution but I suspect that education and integrated public housing may help reduce problems in the future. Improved funding for public schools and re-examination of the education system is an unpopular view given the "demand" for more people willing to work lower paid jobs.
  
  (If you're asking for an alternative, I think German-style welfare or a basic income would be better choices.)
  I'm not familiar with either of those systems.
  We have some differences to the USA her
42. Re:as always.... by NostalgiaForInfinity · 2015-07-11 05:49 · Score: 1
  
  I guess that applies here to - it's pegged to the CPI.
  Note that the CPI in reality isn't a constant basket of goods and services, it's an expanding basket. But the US keeps adding on new benefits on top of the basic welfare system: food, health care, housing, phone service, Internet service, etc.
  
  No disagreement there - though I find the late trend of saying that poverty is a choice morally offensive.
  The problem is that welfare isn't poverty:
  http://blogs.wsj.com/economics...
  In fact, "poverty" in the US (and Australia I imagine) has largely been eliminated. The term "poverty" these days is defined as "relative poverty"; it has little to do with lack of material resources, it's just another measure of the spread of the income distribution.
  
  I don't know of a solution but I suspect that education and integrated public housing may help reduce problems in the future.
  I don't think so. Since poverty is defined in relative terms, raising the general level of education doesn't affect poverty rates at all, even if it makes everybody more productive. Public housing has been a failure, and you can't force people to live next to people they don't want to live next to.
  
  Welfare increases are pegged to the CPI. It's financed by an old piece of legislation that takes the money from income taxes. Welfare is soley the domain of the federal government (no food stamps).
  Here's an interesting report on social expenditures in the OECD:
  http://www.oecd.org/els/soc/OE...
  The US is pretty middle of the road, and actually a bit more on the side of supporting low income people (a lot of social spending in places like France and Germany goes to people who don't need it).
  Anyway, I think empirically, spending more on public education or other programs doesn't work. I think the real problem is massively regressive taxation, combined with massive regulations due to rent seeking, that greatly increase the cost of simply existing as a breathing human being.
43. Re:as always.... by sphealey · 2015-07-11 08:05 · Score: 1
  
  = = =
  http://krugman.blogs.nytimes.c...
  But I think it’s also important to understand where this is coming from. Partly it’s Bush trying to defend his foolish 4 percent growth claim; but it’s also, I’m almost certain, coming out of the “nation of takers” dogma that completely dominates America’s right wing.
  At my adventure in Las Vegas, one of the questions posed by the moderator was, if I remember it correctly, “What would you do about America’s growing underclass living off welfare?” When I said that the premise was wrong, that this isn’t actually happening, there was general incredulity — this is part of what the right knows is happening. When Jeb Bush — who is a known admirer of Charles Murray — talks about more hours, he’s probably thinking largely about getting the bums on welfare out there working.
  As I asked a few months ago, where are these welfare programs people are supposedly living off? TANF is tiny; what’s left are EITC, food stamps, and unemployment benefits. Spending on food stamps and UI soared during the slump, but came down quickly; overall spending on “income security” has shown no trend at all as a share of GDP, with all the supposed growth in means-tested programs coming from Medicaid: [graphs follow] = = =
44. Re:as always.... by NostalgiaForInfinity · 2015-07-11 10:17 · Score: 1
  
  You wrote:
  
  The "welfare" programs that were in place from 1934-1996 no long exist, but even taking the succeeding limited programs under as successors "welfare" has been cut continuously from 1981 through to this day,
  Krugman's own data shows a rise in 2% of GDP in Social Security between 1965 and 1983; succeeding programs weren't "limited" and they haven't been "cut continuously". In addition, another rise in 1-2% of GDP spending on income security between 1963 and today. But those two programs are only a small part of overall US social welfare spending, which has risen pretty much without interruption since the 1920's, as percentage of GDP, in constant dollars, and in constant dollars per capita. So, your statement is wrong no matter which kind of "welfare" we are talking about, whether Social Security specifically or social welfare programs in general.
  Furthermore, instead of accelerating the decline in poverty rates in the US, poverty rates in the US actually stopped declining around 1967, three years after the war on poverty began. Clearly, the War on Poverty was ineffective, and arguably, it was the cause of the stagnation.
  In addition, the idea that a "War on Poverty" should show up as steadily increasing spending on Social Security as a percentage of GDP is ludicrous and backwards. A successful War on Poverty should start off with high social welfare spending and high poverty rates, and have both of them decline. What we actually see is that poverty rates stopped declining when the War on Poverty started, while social welfare spending increased.
45. Re:as always.... by Demonoid-Penguin · 2015-07-11 15:27 · Score: 1
  
  I guess that applies here to - it's pegged to the CPI.
  Note that the CPI in reality isn't a constant basket of goods and services, it's an expanding basket.
  Maybe in the USA (?)
  "The CPI measures the change in the cost of purchasing a fixed basket of goods and services." Source Australian Bureau of Statistics. Those figures are calculated from costs in capital cities. Costs in regional areas are much higher (and that's where most of "poverty" is).
  
  But the US keeps adding on new benefits on top of the basic welfare system: food, health care, housing, phone service, Internet service, etc.
  
  No disagreement there - though I find the late trend of saying that poverty is a choice morally offensive.
  The problem is that welfare isn't poverty:
  http://blogs.wsj.com/economics...
  Interesting (thanks). It's defined differently here (we currently use an international standard). i.e. welfare is actually below the defined level of poverty. Labor (left) wants to use "relative" poverty, the Liberals (right, currently in power) disagree.
  
  In fact, "poverty" in the US (and Australia I imagine) has largely been eliminated. The term "poverty" these days is defined as "relative poverty"; it has little to do with lack of material resources, it's just another measure of the spread of the income distribution.
  I've covered our use of relative poverty (see above). As to whether it's largley (1 in 7) been eliminated here, I'd go with "less visible in the capital cities".
  This article is based on the fairly recent ACCOS report.
  
  I don't know of a solution but I suspect that education and integrated public housing may help reduce problems in the future.
  I don't think so. Since poverty is defined in relative terms [sic in the USA], raising the general level of education doesn't affect poverty rates at all, even if it makes everybody more productive. Public housing has been a failure, and you can't force people to live next to people they don't want to live next to.
  Raising the level of education could change the number of people who qualify for jobs for which there are few or no candidates. We (Australia) can put public housing anywhere - and do. I don't know that it's been declared a general failure (here). Certainly when it's segregated high density it's a failure - people tend to be more likely to change when shown how to do things differently as opposed to told. When all the people you "know" (your neighbours) sleep all day, drink all night, and spend their waking hours trying to work out how to get by without working, and how to get "things" without paying - there's little to contradict the belief that you can't change how you live. Especially when it's institutionalised i.e. public schools in low income areas cater to the perceived outcomes - lifestyle subjects, little or no preparation for higher education, and what's called "vegie" subject (math and english for the unemployed - not for the workplace).
  As an example of proposed measures to "solve" the problem (which seem unlikely to work) one proposed plan is: to relocate large numbers of people from a Southern NSW housing estate - to a high density, low income estate in Canberra (yet to be built). Canberra is a relatively small place, not on a port or with a major river from the sea. Not only is the local market small - it's economy is based almost entirely on a trickle down from Federal government expenditure. The "idea" is that this move will somehow create a manufacturing industry by providing a large workfo
46. Re:as always.... by NostalgiaForInfinity · 2015-07-11 16:57 · Score: 1
  
  "The CPI measures the change in the cost of purchasing a fixed basket of goods and services." Source Australian Bureau of Statistics.
  It is supposed to be fixed, but that's a dubious proposition. Products that are nominally the same over time aren't in reality.
  
  I've covered our use of relative poverty (see above).
  Everybody uses relative poverty because it's what the UN and OECD use. I'm pointing out that it makes no sense. For example, if everybody in the US had their income and wealth multiplied by 10, the poverty rate would remain the same. On the other hand, eliminating relative poverty can be done quite easily: just make everybody equally poor. Another way of looking at it is that the US federal poverty threshold for a family is about at the median family income in places like Japan, Spain, or Israel.
  
  Raising the level of education could change the number of people who qualify for jobs for which there are few or no candidates.
  You can't realistically raise the level of education by government action and spending beyond a certain minimum. The US has tried and failed.
  
  As an example of proposed measures to "solve" the problem (which seem unlikely to work) one proposed plan is: to relocate large numbers of people from a Southern NSW housing estate - to a high density, low income estate in Canberra (yet to be built).
  Yes, I remember that kind of planning from East Germany. It sends shivers down my spine that any Western democracy would degrade its citizens to this degree by moving them around like pawns on a chessboard. How would you like people telling you "you must now move to ... because that's what government planners think will be best for eliminating poverty"?
  
  Our economic indicator, bizarely, is based on the number of new buildings constructed.
  Nothing bizarre about it: politicians love indicators, in particular indicators they can manipulate, to justify their interference in private lives.
  
  Is private education subsidised by the taxpayer in the US? (it is in Australia).
  Not really. People are trying to get school voucher programs going in some places.
47. Re:as always.... by Demonoid-Penguin · 2015-07-11 23:53 · Score: 1
  
  "The CPI measures the change in the cost of purchasing a fixed basket of goods and services." Source Australian Bureau of Statistics.
  It is supposed to be fixed, but that's a dubious proposition. Products that are nominally the same over time aren't in reality.
  
  I've covered our use of relative poverty (see above).
  Everybody uses relative poverty because it's what the UN and OECD use.
  What should I conclude? That you haven't read the sources I provided? That they are wrong? Or that Australia isn't "everybody"? Labour would like to use "relative poverty" - but they're not in power. The Liberals are, and they don't use "relative poverty".
  
  I'm pointing out that it makes no sense.
  Agreed. Poverty shouldn't mean you can't afford a new car, or wine, or cigarettes. It should mean you can't afford the basic for a minimally healthy lifestyle. Which would include those things necessary to elevate your economic position is you so desire (avoid the poverty trap). .e.g. a car license, the ability to save enough so that if you do get a job you can bridge the gap between cessation of welfare (which use accrual to determine eligibility) and your first pay check. There are some measures that help but the best would be to change to cash accounting to determine payment eligibility.
  Minimal dental care etc. We already have a good "universal" healthcare (which rarely covers dental) and pharmaceutical benefits scheme. Likewise housing is not too terrible - waiting lists for accomodation in Dept. of Housing properties is long, but welfare does provide a rental assistance, and most states have a rental bond assistance program - so welfare support for housing isn't limited to public housing. Public transport (except taxis) provides concession fares. If you live in a capital city and only spend on the basics welfare is not too terrible. But if you live outside the capital cities, or a stuck on welfare for extended periods - it is a trap that is difficult, or impossible to climb out of. I didn't always believe that was the case until I tried assisting a few people to do so (put my money where my mouth was).
  
  Raising the level of education could change the number of people who qualify for jobs for which there are few or no candidates.
  You can't realistically raise the level of education by government action and spending beyond a certain minimum. The US has tried and failed.
  I don't know what the US has tried, or why it's failed. I often hear the opinion that increased education won't change things because people don't want to learn - it's part of the current "poverty is a choice" mentality. And wrong because it fails to recognise that many do want to have a better education, but can't afford it (because it's not on offer in their location as part of public education). To which the response is often - then move (which also ignores the problem that creates, even if possible).
  I gave you one example of why the education system in Australia has failed in some locations - there are more reasons, but they're the ones I come across locally. I asked myself why are all these people from particular areas funtionally illiterate - and even, illiterate? The problems in those cases was not shortage of teachers, but of different implementations of the national education curriculum. The conclusion based on working with these schools, and the teachers was that it required a change in mentality (why teach them things they will never use - they will be unskilled labour or unemployed) and of application of curriculum. That doesn't require more resources. As a member of the business community (and a previous member of business associations) I also see the other pressures that ensure that some areas fail - "we need more people who are willing to work for low wages", "we need to ensure that our childr
48. Re:as always.... by Anonymous Coward · 2015-07-12 01:18 · Score: 1
  
  The purpose of insurance is to spread the risk, and insurance companies are for-profit businesses that also need to take a cut to cover their running expenses and make some profit. NASA probably does enough launches that spreading the risk with insurance payments isn't a worthwhile proposition, they just need to factor it into their launch costs. Making SpaceX take out insurance would likely have increased the launch costs above what it would cost for NASA to bear the risk themselves spread over all their launches.
49. Re:as always.... by sphealey · 2015-07-12 04:01 · Score: 1
  
  = = = Krugman's own data shows a rise in 2% of GDP in Social Security between 1965 and 1983; succeeding programs weren't "limited" and they haven't been "cut continuously". = = =
  
  If you and your political party are going to classify Social Security as "welfare" rather than (a) a decent thing for an extremely wealthy society to do (b) an incredibly successful program of alleviating poverty among the elderly (c) a good method of moving people through the employment system and opening slots at the top so young people can get jobs at the bottom (d) one of a basket of preventative measures against a communist revolution [as envisioned by that flaming liberal Bismark and used by Roosevelt and Hopkins for the same purpose] then you are welcome to do so.
  However, if you and your political ilk want do do that you need to stand up and say so explicitly to the entire nation. Including not shirking from explaining to the heroic {yeoman farmers} ranchers of the suburban/exurban range that they too are taking "welfare" when they apply for "their" Social Security. To date the hard Radical Right has been successful in using half-truths and dog whistles to imply that they will somehow manage to chop Social Security for the "undeserving" while leaving it in place for the "deserving". This time I think you're going to be forced to show you work on that bit of legerdemain
  sPh.
50. Re:as always.... by NostalgiaForInfinity · 2015-07-12 12:27 · Score: 1
  
  If you and your political party
  I used to be a registered Democrat, now an independent.
  
  classify Social Security as "welfare" rather than (a) a decent thing for an extremely wealthy society
  I consider a regressive taxation and unsustainable and financially unsound intergenerational transfers to be a rather indecent and immoral thing to do.
  
  (b) an incredibly successful program of alleviating poverty among the elderly
  Social Security is a piss-poor way of alleviating poverty, since most of its payments go to people who are not in poverty and because it amounts to regressive taxation and poor return on investment.
  
  (c) a good method of moving people through the employment system and opening slots at the top so young people can get jobs at the bottom
  Huh?
  
  To date the hard Radical Right has been successful in using half-truths and dog whistles to imply that they will somehow manage to chop Social Security for the "undeserving" while leaving it in place for the "deserving".
  I have no idea what that is supposed to mean. While I think the American Right gets a lot of things wrong, generally they want to cut all government handouts, whether to individuals or corporations.
  http://www.heritage.org/resear...
  In fact, crony capitalism is much more of a policy of the American "left", aka, progressives.
  
  (d) one of a basket of preventative measures against a communist revolution [as envisioned by that flaming liberal Bismark and used by Roosevelt and Hopkins for the same purpose]
  Yes, and look at how well that worked out for Germany: instead of a communist revolution, it got WWI, the Weimar Republic, and Hitler. And, of course, Hitler's party program was a combination of Bismarck's authoritarianism and US-style progressivism.
  But unlike the US, Germans actually have gotten their fiscal act together: they cut welfare in a big way, and their approach to retirement benefits and medical insurance is far more fiscally sound than ours. So, by all means, let's adopt a German style welfare system, including the elimination of all in-kind benefits, as well as the budget and benefit cuts to make it possible while paying down our national debt. You know, like the Germans.
  http://static.quest-trendmagaz...
They don't already? by Anonymous Coward · 2015-07-10 07:19 · Score: 1

What contract did they decide on instead? "Here's a bunch of money, no worries if the rocket fails"?
1. Re:They don't already? by bill_mcgonigle · 2015-07-10 07:38 · Score: 1, Interesting
  
  What contract did they decide on instead? "Here's a bunch of money, no worries if the rocket fails"?
  When I toured Kennedy in the 80's, they said the Shuttle launches were insured by Lloyd's of London for $2B.
  If there's no insurance on the SpaceX launch it's not because they never thought of it before. They may be self-insuring (getting lower launch costs by not requiring insurance - maybe the launch is $150M insured). They may be be incompetent. They may be lying in spirit if not technically to try to benefit ULA because of cronyism.
  [choose one or more]
  
  --
  My God, it's Full of Source!
  OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
2. Re:They don't already? by Firethorn · 2015-07-10 08:17 · Score: 4, Interesting
  
  They may be self-insuring (getting lower launch costs by not requiring insurance - maybe the launch is $150M insured).
  
  This was my thought. Rocket launches are risky, so any insurance is going to be expensive.
  So let's say they require commercial insurance to be bought, and the insurance company correctly predicts a 5% failure rate. But they have expenses to cover, the insurance is 'unusual' and highly variable, it's a small market, etc....
  Just to break even, they would have to charge 1/20th the cost per launch, but that's not the end of it. They have expenses and profit to worry about. For something like rocket launches? 20% overhead wouldn't be out of line, I think.
  So rather than the 'insurance' cost per launch being 5%, it's now 6%. For a $100M launch, that means self covering costs, on average, $5M. Commercial insurance would increase that to $6M.
  
  --
  I don't read AC A human right
3. Re:They don't already? by Chalnoth · 2015-07-10 11:24 · Score: 1
  
  That's certainly what it sounds like. Requiring insurance should be an absolute no-brainer here. There is no sense in which NASA should be on the hook for launch failures by private companies.
Blew up one of our instruments, too by Anonymous Coward · 2015-07-10 07:19 · Score: 3, Interesting

Painful, but we'll live. There hasn't been a rocket yet that has a perfect operational record.
1. Re:Blew up one of our instruments, too by bobbied · 2015-07-10 07:26 · Score: 1
  
  Painful, but we'll live. There hasn't been a rocket yet that has a perfect operational record.
  Oh sure there is... We've just not tried to launch it yet.... ;)
  
  --
  "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
2. Re:Blew up one of our instruments, too by thrich81 · 2015-07-10 07:33 · Score: 5, Informative
  
  Saturn I -- 10 launches from 1961 to 1965, 10 operational successes. And that was using clustered engines and liquid hydrogen engines in the EARLY 60s.
3. Re:Blew up one of our instruments, too by sycodon · 2015-07-10 07:39 · Score: 1, Interesting
  
  And designed largely with pencils and slide rules.
  A feat that I highly doubt today's politically correct NASA could repeat today.
  
  --
  When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
4. Re:Blew up one of our instruments, too by Anonymous Coward · 2015-07-10 07:41 · Score: 1
  
  Apollo 13 lost an engine on launch. So it wasn't perfect.
5. Re:Blew up one of our instruments, too by Anonymous Coward · 2015-07-10 07:45 · Score: 1
  
  Apollo 6 - Saturn V third stage failed ignition, SPS engine had to be used to reach orbit.
6. Re:Blew up one of our instruments, too by bobbied · 2015-07-10 08:13 · Score: 1
  
  Saturn I -- 10 launches from 1961 to 1965, 10 operational successes. And that was using clustered engines and liquid hydrogen engines in the EARLY 60s.
  Successful, but not totally a clean record... SA-1 and 3 had issues related to improper fuel loads. AS-101 had an unexpected engine failure and AS-103 sand SA-104 had some minor failures. They all achieved their mission objectives, but the vehicle wasn't flawless.
  
  --
  "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
7. Re:Blew up one of our instruments, too by Firethorn · 2015-07-10 08:20 · Score: 1
  
  Statistics wise, with only 10 launches the system could really have up to a 10% failure rate and 0 failures in 10 would be a perfectly reasonable result.
  
  --
  I don't read AC A human right
8. Re:Blew up one of our instruments, too by Anonymous Coward · 2015-07-10 08:36 · Score: 1
  
  Why? Are slide rules considered phallic or something?
  
  .
9. Re:Blew up one of our instruments, too by bobbied · 2015-07-10 08:41 · Score: 2
  
  Yea, it apparently had a similar failure rate to the Saturn V. Operationally it lost one engine in flight, had fueling issues for two flights and a whole host of minor issues and glitches both on the launch pad and in flight. Where it was successful at meeting it's objectives for each mission, it did not have a perfect record.
  
  --
  "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
10. Re:Blew up one of our instruments, too by sphealey · 2015-07-10 11:39 · Score: 1
  
  = = = hey all achieved their mission objectives, but the vehicle wasn't flawless. = = =
  
  Was the design spec "get payload to correct orbit safely" or was it "get payload to orbit with zero subsystem failures"? Maybe there was a reason the designers chose to use five smaller engines and an control system that could compensate for the loss of one or two.
  sPh
11. Re:Blew up one of our instruments, too by khallow · 2015-07-10 12:28 · Score: 2
  
  Was the design spec "get payload to correct orbit safely" or was it "get payload to orbit with zero subsystem failures"?
  Yes.
12. Re:Blew up one of our instruments, too by KGIII · 2015-07-10 19:09 · Score: 1
  
  You'll pry my dispstick from my cold dead hands!
  
  --
  "So long and thanks for all the fish."
13. Re:Blew up one of our instruments, too by KGIII · 2015-07-10 19:10 · Score: 1
  
  Slipstick even. Now you know why I do not usually smoke much pot.
  
  --
  "So long and thanks for all the fish."
The SpaceX advantage? by Applehu+Akbar · 2015-07-10 07:21 · Score: 2, Interesting

SpaceX policy seems to be to collect rich telemetry from each launch, so that fault investigation can proceed from the data, rather than the old approach of fishing for wreckage and piecing it together to determine the cause. Does NASA do things this way too now, or is it still using the old style of forensics?
1. Re:The SpaceX advantage? by Anonymous Coward · 2015-07-10 07:28 · Score: 2, Interesting
  
  NASA pays them to launch the rocket without taking into account the cost of a failure investigation, their process for how to proceed will be based on what data they have available, if rich telemetry is available they will use it, but in practice most don't have it because NASA wont pay for it. SpaceX spends extra to get that extra data, so they have it.
2. Re:The SpaceX advantage? by Anonymous Coward · 2015-07-10 07:35 · Score: 1
  
  NASA collected telemetry on every launch too.
3. Re:The SpaceX advantage? by Anonymous Coward · 2015-07-10 07:39 · Score: 1
  
  Can someone explain to me why this was modded Troll?
  I don't see how this is troll worthy. Snarky, maybe, but not trolling.
  NASA uses telemetry too, just as SpaceX does. I think the difference is that SpaceX just does it in flashier ways (cameras inside the fuel tanks).
4. Re:The SpaceX advantage? by mbone · 2015-07-10 07:46 · Score: 2
  
  SpaceX policy seems to be to collect rich telemetry from each launch
  And you think ULA, Orbital and Boeing don't?
  And, by the way, if you find any debris washed up on the beach (any beach) they want it - call the SpaceX debris recovery hotline, 866-392-0035.
5. Re:The SpaceX advantage? by taiwanjohn · 2015-07-10 16:53 · Score: 2
  
  Also, they immediately sent all the surface assets they had in the area to search for debris. I don't know where the GP got the notion that they aren't interested.
  
  --
  XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Insurance? by Anonymous Coward · 2015-07-10 07:24 · Score: 4, Insightful

If I ship something, it is up to me to pay insurance if I wish to do so. Otherwise, I take my chances on something happening to the cargo or it getting completely lost.
Why should the rocket manufacturer pay the insurance. That should be NASA's/the taxpayer's responsibility just like any other package delivery system. Let the insurance companies figure out a premium based on the success/failure rate of each rocket launching company and price accordingly.
1. Re:Insurance? by Anonymous Coward · 2015-07-10 07:28 · Score: 1
  
  Why should the rocket manufacturer pay the insurance? That should be NASA's/the taxpayer's responsibility...
  The taxpayer is paying for it either way.
2. Re:Insurance? by Lab+Rat+Jason · 2015-07-10 07:38 · Score: 4, Insightful
  
  I came here to say exactly this... if SpaceX has to buy a policy, you don't think they're going to pass that cost through to NASA anyways? Pft!
  
  --
  Which has more power: the hammer, or the anvil?
3. Re:Insurance? by misnohmer · 2015-07-10 08:00 · Score: 2
  
  Insurance companies don't lose money in the long run. If NASA insists on SpaceX taking out an insurance policy, that cost will be passed right onto customers (oh wait, NASA being the main one). This is a new and evolving industry, so say the insurance companies determine 1 in 10 launches will fail. So the insurance will cost $25M for every $100M in coverage, add 10% for SpaceX administration, $27.5M. Every $275M of taxpayers money, the insurance industry will pay out $100M. And every time they pay out, the premiums go up too. Subtract 10% if NASA pays their own insurance - either way it's a losing proposition.
  Insurance is meant for catastrophic events that would break the insurance holder. If $110M will break NASA, they should not be in space business in its current stage of development (one day it may become as routine as trucking, but not today).
4. Re:Insurance? by DickBreath · 2015-07-10 08:01 · Score: 1
  
  Yes, that is what I came to say. Not only does SpaceX pass the cost of insurance on to the taxpayers, but the insurance company passes the cost of failure through to SpaceX as high premiums. So ultimately the shipper (NASA, therefore taxpayer) pays for failed launches.
  
  But making SpaceX get insurance means you're "doing something". (eg, Creating more paperwork, and adding the inefficiency of the insurance industry getting its fingers in the pie. Insurers also make a profit.) Ultimately this hurts the taxpayer, not helps.
  
  --
  
  I'll see your senator, and I'll raise you two judges.
5. Re:Insurance? by DickBreath · 2015-07-10 08:06 · Score: 5, Insightful
  
  This will cost the taxpayers no matter how you slice it. Either the taxpayer eats it, like now. Or NASA gets insurance, which costs the taxpayer. The insurer WILL make a profit and will pass the cost of failure to the policy holder through increased premiums. So NASA could make SpaceX get the insurance. All that does is mean that SpaceX will increase its prices to NASA to account for the cost of insurance (eg, the cost of inevitable failures).
  
  By making either NASA or SpaceX get insurance, you add in another greedy industry (insurance) that get their fingers in the pie and make a profit. Great way to save the taxpayer money.
  
  --
  
  I'll see your senator, and I'll raise you two judges.
6. Re:Insurance? by Anonymous Coward · 2015-07-10 09:16 · Score: 1
  
  There's no right answer to this. The deal that they signed is supposedly the deal they were both happy with and this is how it paid off.
7. Re:Insurance? by DRJlaw · 2015-07-10 09:29 · Score: 1
  
  If I ship something, it is up to me to pay insurance if I wish to do so. Otherwise, I take my chances on something happening to the cargo or it getting completely lost.
  Utterly true. However, your shipper is not trying to develop safer delivery trucks or airplanes so as to reduce the frequency of accidents. Those are other entities (GMC, Boeing, etc.). Your shipping may be trying to reduce driver/pilot negligence or otherwise abate other people's negligence, but those are strategies that are either well-known and probably already in use or under-development and of low marginal utility. Most importantly, what you're shipping 99 times out of 100 isn't valuable enough to justify a lawsuit.
  These guys are building rockets. It is literally rocket science. While they obviously have incentives to avoid putting on impromptu fireworks shows, the government in this case is shipping items with limited immediate replacement capability (equipment, experiments, spacesuits) in addition to food, water, and the like. The government doesn't really care how much replacement would cost since it will pay for the risk one way or another -- the insurance simply becomes wrapped into the cost. It would really prefer that it not blow up. After all, ehen you have a large enough pile of cash, the smartest way to insure your risk is to self-insure.
  By putting the risk of loss on the launch company, NASA would be giving them an extra incentive to become more reliable. The launch company can reduce their cost and increase profits (since they're usually bidding fixed cost to provide a package of launches, savings on insurance costs would go to the launch company). The reason for requiring insurance is that otherwise you either audit the hell out of the company, require a bond which ties up capital, or hope that they remain solvent after something goes *blam* without racking up an uncollectable debt. It'd be the Solyndra controversy in a somewhat different form.
8. Re:Insurance? by Martin+Blank · 2015-07-10 09:40 · Score: 1
  
  Without buying extra insurance, you're limited to what the carrier is willing to pay out as specified in the contract agreed to at the time of purchase. In the US, both UPS and FedEx cap their payout at $100 unless additional insurance is purchased.
  
  --
  You can never go home again... but I guess you can shop there.
9. Re:Insurance? by fiftyfly · 2015-07-10 09:42 · Score: 3, Informative
  
  Why should the rocket manufacturer pay the insurance
  Wait what? In many industries bonding is a prerequisite for simply submitting a bid and being bondable a prerequisite for being employed. Hell try getting a mortgage without insurance. This is so dumb I had to login to comment for the first time in years.
  
  --
  "Sanity is not statistical", George Orwell, "1984"
10. Re:Insurance? by Martin+Blank · 2015-07-10 09:46 · Score: 1
  
  UPS and FedEx don't manufacture their trucks, but they're heavily involved in the development of the vehicles they use (other than perhaps the tractor-trailers). They have engineers that work directly with manufacturers on the layouts, materials, aerodynamics, and powerplants to find a mix of cost, fuel efficiency, security, and even safety.
  SpaceX is trying to break into a business with a completely new cost model, and a relatively new rocket model (mix of some proven technologies with some new ones and even some completely experimental items. They have every incentive already to become more reliable, especially since the goal is reuse of at least Stage 1. If NASA wants them to buy insurance to cover future failures, that's NASA's call, but it will ultimately come out of NASA's pocket and won't change the push for highest possibility reliability all that much.
  
  --
  You can never go home again... but I guess you can shop there.
11. Re:Insurance? by tompaulco · 2015-07-10 09:51 · Score: 1
  
  Without buying extra insurance, you're limited to what the carrier is willing to pay out as specified in the contract agreed to at the time of purchase. In the US, both UPS and FedEx cap their payout at $100 unless additional insurance is purchased.
  I'm sure that every launch has its own contract that probably takes as much time to hammer out as preparing the rocket for launch does. I'm sure NASA could get SpaceX to insure delivery for X or just make a good faith effort of delivery for X-Y.
  
  --
  If you are not allowed to question your government then the government has answered your question.
12. Re:Insurance? by MasseKid · 2015-07-10 10:47 · Score: 1
  
  While a good argument, it's entirely moot. SpaceX is not going to eat the cost of insurance. They'll simply buy the insurance for NASA and add the cost of the insurance (and the costs involved with hiring someone to deal with the insurance) to the cost of the launch. NASA can buy insurance direct or it can use a middleman (SpaceX), in the end, NASA is paying for it either way.
13. Re:Insurance? by DickBreath · 2015-07-13 03:36 · Score: 1
  
  I think that NASA contracting for a fixed number of deliveries and certain amount of payload weight effectively does that.
  
  --
  
  I'll see your senator, and I'll raise you two judges.
SpaceX too good to be true? by xfizik · 2015-07-10 07:25 · Score: 1, Interesting

Well, maybe more expensive Russian rockets cost what they do for a reason? Maybe promising 2-3 times cheaper price for the same (or better) service was a little too good to be true?
1. Re:SpaceX too good to be true? by Geoffrey.landis · 2015-07-10 07:44 · Score: 5, Informative
  
  Well, maybe more expensive Russian rockets cost what they do for a reason?
  
  Well, that reason is certainly not reliability-- Russian rockets have been pretty failure prone lately.
  http://spacenews.com/proton-fa...
  http://spacenews.com/progress-...
  http://spacenews.com/russian-s...
  Atlas-V and Delta-IV been doing pretty good, though: so far both have had a 100% record for reaching orbit, although each one has had one launch with an underperforming upper stage that put it into lower-than-planned orbits.
  
  --
  http://www.geoffreylandis.com
2. Re:SpaceX too good to be true? by xfizik · 2015-07-10 08:29 · Score: 2
  
  You're missing the point. I'm commenting on the expectations of significantly lower price for the same service promised by SpaceX, not on the reliability. A failure rate is factored in the price of Russian rockets.
What they don't tell you... by Anonymous Coward · 2015-07-10 07:25 · Score: 1

If this had been NASA's work instead, the cost to taxpayers would have been $770 million.
1. Re:What they don't tell you... by thinkwaitfast · 2015-07-10 08:34 · Score: 1
  
  NASA contracts everything. They don't build anything. I've never understood why people don't understand this. They don't even perform the launches. They're like someone who decides to act as a prime contractor and 'build their own house'. Hire a grader, hire an architect, framers, hire plumbers, electricians, roofers, etc.
Re:yes thats it, pander to another industry by Daemonik · 2015-07-10 07:28 · Score: 3, Insightful

You act like NASA has a choice and isn't caught between corporate funded Libertarian/TeaParty/NeoCon PACS paying off congresscritters and senators to strong arm them into these deals by holding their budget hostage.
We should have hired them to build the F-35 by Mike+Buddha · 2015-07-10 07:30 · Score: 1

We should have hired SpaceX to build the Joint Strike Fighter. $110M for one capsule is nothing!

--
by Mike Buddha -- Someday the mountain might get him, but the law never will.
Better than the shuttle by Bugler412 · 2015-07-10 07:34 · Score: 4, Interesting

Better than multiple billions and astronaut lives lost for a cargo run. Hell, a shuttle launch that succeeded cost over a billion per launch.
No Insurance?? by foxalopex · 2015-07-10 07:38 · Score: 1, Interesting

Seeing how space travel isn't exactly safe and virtually all launch systems have at some point blown up, why wouldn't this be insured? You would think NASA or SpaceX would have some sort of insurance to cover for damages. Most of us have car insurance for example because statistically at some point virtually everyone has one car accident in their lifespan. As much as I find SpaceX a nifty company and a good idea. (It's so far had a pretty good track record for cost of launches) making it the most cost effective launch system, there should be some insurance you would think.
1. Re:No Insurance?? by Lab+Rat+Jason · 2015-07-10 08:06 · Score: 4, Insightful
  
  All insurance schemes are designed to amortize the risk... in this case, amortize the cost of a failure over the previous, and subsequent successes... and the middleman skims a little off the top. So I look at this and think buying insurance is actually just a waste of money.
  To anyone who would disagree: If the only insurance you've ever bought is for your car... you probably don't know shit about insurance.
  
  --
  Which has more power: the hammer, or the anvil?
2. Re:No Insurance?? by fnj · 2015-07-10 08:21 · Score: 4, Insightful
  
  Correct me if I'm wrong, but you seem to think that somehow insurance will lower the cost of the accidents. But it's perfectly obvious that, in the long term, that can't possibly be true. The insurance company has to make a profit - PLUS its own overhead costs. - plus of course covering the payouts.
  The reason an individual (unless very wealthy) doesn't self-insure is because the things he is insuring against are very low-runner risks, but if/when they do occur, he would be instantly bankrupt. That's not the case for the US government. $110 million is pin money. Petty cash. Pocket change. Rounding error. They can save money by self insuring.
  Now, if they didn't build in a cushion to the program to cover such boo-boos, that is entirely a different thing. Then they would be stupid. That doesn't change the equation that in the long run it is always cheaper to self insure.
3. Re:No Insurance?? by penguinoid · 2015-07-10 13:48 · Score: 1
  
  I'm not convinced that it's cheaper for the government to pay for failures rather than buy insurance. The reason is that I believe it is easier to convince a government worker that the risks are lower than they really are, than an insurance company. So the government might make better informed decisions if an insurance company made their independent risk estimates.
  
  --
  Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
doesn't matter what you call it by NostalgiaForInfinity · 2015-07-10 07:39 · Score: 4, Insightful

Gerstenmaier added that NASA is thinking about making these companies take out insurance policies that would cover the cost to taxpayers in the event of another failure.
I think this is a good idea, but not for the reason Gerstenmaier says. What it will do is get another private entity to look at the risks of these launches and price them accurately. This will make it clearer in the budget how costly these launches actually are.
However, the cost for insurance will simply be added on top of the contract, so the tax payer pays for it either way. In fact, with insurance, the tax payer will pay more on average than without insurance.
1. Re:doesn't matter what you call it by felipou · 2015-07-10 08:11 · Score: 1
  
  In fact, with insurance, the tax payer will pay more on average than without insurance.
  It's wonderful how insurance works on a greater scale.
2. Re:doesn't matter what you call it by fiftyfly · 2015-07-10 09:47 · Score: 1
  True - the last customer in the supply chain always pays everyone's costs and margins or the product dies. What bonding-on-bid does though is force suppliers to get insurance before signing on contractual commitments thereby achieving two aims:
  
  A) levelling the playing field between those who pre-emptively had their backsides covered and those who don't
  
  B) filtering out all potential players for whom the market can not find a palatable cost at which to price their risk
  
  Insurance is important in most trades.
  --
  "Sanity is not statistical", George Orwell, "1984"
3. Re:doesn't matter what you call it by NostalgiaForInfinity · 2015-07-10 09:52 · Score: 1
  
  Insurance always works that way; that's pretty much the definition of insurance: you pay someone a premium to reduce your risk.
4. Re:doesn't matter what you call it by NostalgiaForInfinity · 2015-07-10 09:56 · Score: 1
  
  Yes, that's pretty much what I meant by "this will make it clearer in the budget how costly these launches actually are."
  Part of the problem is that NASA is probably not very good at estimating the risks of suppliers, and it isn't motivated to do so anyway because understating the risk and self-insuring is a good way of getting funding for programs that wouldn't pass if the budget had to include risk.
5. Re:doesn't matter what you call it by Solandri · 2015-07-10 15:17 · Score: 1
  
  I just finished explaining this to my parents (regarding life insurance). Insurance is for when you can't afford a failure. If my mom couldn't afford living expenses if my dad (the breadwinner) died, then it makes sense for him to get life insurance. But since they have adequate passive income to maintain their lifestyle even if one of them were to die, insurance isn't necessary.
  
  In the case of the government and space launches, the government can afford to pay for failures. So it makes no sense to insure them. The cost of failures is automatically built into the cost of the launches. With a 5% failure rate, you pay for 20 launches and only 19 of them succeed. It makes no sense to pay a third party to insure all the launches - they will price it so they can make a little money to cover overhead and profits (else there is no reason for them to offer insurance), so you effectively end up paying the equivalent of 20.5 launches if you buy insurance for them. If the failures would bankrupt you, then yes the prudent thing is to get the insurance. But the government has much deeper pockets which can withstand launch failures, so it makes more sense to self-insure and eat the cost of failures.
  
  However, the cost for insurance will simply be added on top of the contract, so the tax payer pays for it either way. In fact, with insurance, the tax payer will pay more on average than without insurance.
  And that is why it makes no sense to require launch companies to guarantee their launches. Their pockets are not as deep as the government's, so if you require them to pay back the cost of the payload should a launch fail, they will simply buy insurance and raise the price they charge for a launch. And the government will again be paying the equivalent price of 20.5 launches for 20 actual launches and 19 successes (on average).
6. Re:doesn't matter what you call it by NostalgiaForInfinity · 2015-07-10 15:51 · Score: 1
  
  I just finished explaining this to my parents (regarding life insurance). Insurance is for when you can't afford a failure.
  
  Well, good that you understand at least the basics of insurance. As I was saying, though, the point of insurance here is not that the government can't absorb the risk, it is to get accurate pricing:
  
  What it will do is get another private entity to look at the risks of these launches and price them accurately. This will make it clearer in the budget how costly these launches actually are.
  
  That is, if there is a $90 million dollar bid and a $100 million dollar bid, you don't know which bid is the better bid unless you know the risk; for example if the first bid has a 1:5 risk and the second bid has a 1:20 risk, the second bid is better. If you get bids that include insurance, you then can compare the bids.
  Furthermore, by getting insurance, you not only have someone who knows what they are doing and is motivated to get it right estimate the risk, you also don't have to worry about what happens if they get it wrong. That is well worth the insurance premium the government ends up paying.
Also for the Pad. by mbone · 2015-07-10 07:40 · Score: 5, Informative

The Orbital failure took out the pad, which was owned by the Commonwealth of Virginia, which had neither insurance nor reserve cash to pay for a new one. That caused a scramble to find the bucks to repair the pad.
1. Re:Also for the Pad. by penguinoid · 2015-07-10 13:50 · Score: 1
  
  fryPad?
  
  --
  Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
Insurance by jratcliffe · 2015-07-10 07:40 · Score: 3, Informative

Practically every commercial satellite launch is insured. Typically runs $20-30 million for a $250-350 million satellite.
1. Re:Insurance by atticus9 · 2015-07-10 08:25 · Score: 1
  
  Surely SpaceX would pass the cost on to it's customers if has to insure, I don't think they're making a profit on launches as-is. If ~10% is accurate NASA would be paying for the an extra payload every year or two, so it might actually be cheaper to have an occasional failure (this was their 7th supply mission), in particular since there's a risk the insurance company will find a way not to pay after an accident.
Re:yes thats it, pander to another industry by Anonymous Coward · 2015-07-10 07:42 · Score: 1

A Democrat Congress killed the Apollo Program and eviscerated NASA's intellectual capital.
Re:Insurance??? by mbone · 2015-07-10 07:43 · Score: 2

The government is always self-insured. I believe that the private launch companies have to have some basic insurance to get a launch license. Commercial satellites are routinely insured, but that is a business move, not a requirement.
Re:wait, who's paying for this cock-up? by nedlohs · 2015-07-10 07:46 · Score: 3, Informative

No they are not.
Lockhead PR is all over this by rio517 · 2015-07-10 07:49 · Score: 2

I can only imagine that Lockheed and United Launch Alliance's teams are all over this launch trying to discredit SpaceX. They cannot compete on price since SpaceX's ground-up engineering is so much cheaper than the Russian rockets they mark up. Last year they decided "We're going to cut our costs by half" - should have done that a long time ago. Seems like they're still struggilng to sort it out: https://en.wikipedia.org/wiki/...

Honestly, it blows my mind that NASA didn't buy insurance in the first place. I agree with the other poster that pointed out, if "I ship something I buy the insurance if I need it." However, just like other types of delivery companies, those costs eventually get passed on to the consumer. It's probably cheaper for if NASA just pays for coverage as they need it, rather than having SpaceX insure every launch for X millions of dollars.
1. Re:Lockhead PR is all over this by bondsbw · 2015-07-10 08:14 · Score: 1
  
  Insurance reduces immediate risk by spreading out the costs, for the price of a bit of overhead.
  But it's hard to spread out the cost of space launches. There aren't that many. And if you have enough money in the bank to pay for the crash, you shouldn't get insurance. In total you would be paying more for insurance (via overhead) than if you were uninsured.
  
  --
  All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Record [Re:Blew up one of our instruments, too] by Geoffrey.landis · 2015-07-10 08:02 · Score: 1

Apollo 6 had two engines shut down early, but the upper stage burned longer to compensate, so the vehicle still made orbit.
The S-IVB didn't restart in orbit-- but since that was after it already made orbit, that counts as an in-space propulsion failure, not a launch vehicle failure.
Apollo 13 had a second-stage engine shut down early, but, again, the other engines burned longer to compensate, and the launch was a success. Launch wasn't the problem with Apollo 13.
So, I'd rate Saturn-V at 100% success rate as a launch vehicle, if the criteria for success is "getting the payload successfully into orbit".
Of course, with only 13 launches, it's not had as long a record as many other vehicles.
Nice video here: http://gizmodo.com/watch-all-1...

--
http://www.geoffreylandis.com
He may be mistaken by kf6spf · 2015-07-10 08:02 · Score: 3, Informative

I'm not sure how he came up with $110 million in losses the taxpayer has to cover. The launch, part of SpaceX's CRS contract, is their cost. The contract says they have to deliver X number of supply runs. They lose a rocket, they still have to make X number of DELIVERIES. That means SpaceX has to eat the cost of a failed launch - part of the incentive to get it right. What the government (and tax payers) are on the hook for is the lost contents of the flight. I'm just surprised there was $110 million worth of food, fuel, oxygen and experiments. Seems a bit high.
1. Re:He may be mistaken by Anonymous Coward · 2015-07-10 08:32 · Score: 1
  
  It is definitely a high number and I suspect somewhat bogus.
  A space suit was lost, estimated $10 million by third parties.
  IDA #1 (a docking adapter) was lost. Some estimated it to have cost $30 million
  The rest of the supplies should no way total to 70 million
2. Re:He may be mistaken by Xylantiel · 2015-07-10 08:36 · Score: 1
  
  I also thought the CRS contracts were for deliveries, not launches. Maybe he has included the cost of schedule changes for other launches that were already more expensive? But I guess saying that it is almost as expensive to reschedule a non-spaceX launch that it is to do a spaceX one doesn't come off as good in a headline. The CRS contract to SpaceX, according to the wikipedia page, is $1.6 billion for 12 launches, or $133 million per launch.
3. Re:He may be mistaken by guruevi · 2015-07-10 09:09 · Score: 2
  
  You're forgetting the pork attached to the thing. How much does freeze-dried food cost? How much does it cost when NASA buys it? A freeze dried yoghurt will require cows from Wisconsin to supply the milk to a yoghurt factory in Vermont after which it is shipped to a freeze drying place in Alabama and then it is shipped to a packing place in Texas before finally getting to the launch site in California, all transported by a New York transportation company.
  I've worked with government contractors, they typically charge 2-3x the price on commodity items (such as network switches and the like) simply because before the order is placed, there will be about 2 FTE working full time for at least 6 months to get through the bidding process, then there will be the delays and modifications to the contract before the final approval, finally the order will be delivered and installed for at least 1 year before the actual payment goes through.
  Many small companies simply do not have the capacity to keep their company running for about 1-2 years without seeing an actual payment, so it goes to the big ones that can absorb such cost and as a result not only do they retail at a much higher price, the final cost is even higher.
  
  --
  Custom electronics and digital signage for your business: www.evcircuits.com
Re:Insurance??? by PRMan · 2015-07-10 08:06 · Score: 1

I remember when DirecTV's new satellite blew up. For a minute, it was reported in the press that it might not be insured. That, of course, turned out to be false.

--
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Re:yes thats it, pander to another industry by fnj · 2015-07-10 08:07 · Score: 1

Mod parent up.
Re:yes thats it, pander to another industry by thinkwaitfast · 2015-07-10 08:15 · Score: 1

Neil deGrasse Tyson agrees with you.
Do you understand what Insurance actually is? by DickBreath · 2015-07-10 08:15 · Score: 3, Interesting

It spreads the risk. That's all. My house probably is not going to burn down this year. But SOMEBODY's house DEFINITELY will. Insurance spreads the risk among policy holders.

How many rocket launch policy holders are there to spread the risk among?

I suppose an insurance underwriter could spread the rocket launch risk (and cost) among their auto and home policy holders. That will make them uncompetitive in the auto and home insurance market. So they'll have to keep the risk amongst similar policy holders for rocket launches.

Ultimately, just like houses burning down, some rocket launches WILL fail.

If NASA is forced (maybe by ignorant Congress who must "do something!") to buy insurance, then the cost of failure is still passed to the policy holders (eg, mostly taxpayers). Plus now you've got another industry (insurance) getting their fingers in the pie and making a profit. If Congress or NASA forces SpaceX to get insurance, then SpaceX will pass the cost of insurance on to NASA and ultimately taxpayers in the form of higher launch prices.

No matter how you slice it, the customers of rocket launches WILL bear the costs of inevitable failure. There's not that many customers to spread the costs amongst like there are for homeowners.

--

I'll see your senator, and I'll raise you two judges.
Re:yes thats it, pander to another industry by Coren22 · 2015-07-10 08:25 · Score: 1

Did NASA ever truly launch rockets without private companies? Saturn was a partnership with Boeing, and the shuttle was Boeing/Lockheed and some others. So what is the difference now?

--
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
Re:yes thats it, pander to another industry by R3d+M3rcury · 2015-07-10 08:27 · Score: 1

maybe if nasa didnt stop its rocket development [...]
I assume you've never heard of the Space Launch System being developed by NASA.
Who would insure an experimental rocket? by ZeroWaiteState · 2015-07-10 08:40 · Score: 1

I mean, what are the actuarial tables on that?
1. Re: Who would insure an experimental rocket? by ZeroWaiteState · 2015-07-10 08:41 · Score: 1
  
  And what do you do with a risk pool of ONE?
$110 Million!? Dammit! by RevWaldo · 2015-07-10 08:41 · Score: 4, Funny

And we had our hearts set on getting that F-35 jet fighter!

Well, 3/4 of one anyway...

.

--
Prisencolinensinainciusol. Ol Rait!
Self-insure by Steve+Hamlin · 2015-07-10 08:44 · Score: 1

"However, the cost for insurance will simply be added on top of the contract, so the tax payer pays for it either way. In fact, with insurance, the tax payer will pay more on average than without insurance."
Exactly, and this is a good reason to NOT pay a third party for insurance.
Insurance exists for infrequent casualty events that you do not have the balance sheet or liquidity to manage on your own, so you contract out for someone to provide you that balance sheet / liquidity, at a cost to you. For Property & Casualty insurance, the underwriter is certainly NOT looking to pay more claims that they collect in premiums (although they might pay up to 95+% of premiums as claims; they make most of their income on investing the float), and thus the average policy holder pays more in premiums than their mere risk alone would indicate.
In this case, the government should either demand a discount from SpaceX in order to absorb the risk of launch loss, or require an indemnity from SpaceX to cover the cost of recreating (some of) the payload, or somewhere in between. But both SpaceX and the US Government have deep enough pockets that they do not need to assistance of a third party to manage the resulting cash flow, at a net cost to them both. Launch losses are a cost of doing business - pricing + negotiating power can shift those financial risks between the parties as needed, but self-insure the launch to keep as much money as possible from leaking outside the tent to third parties.
1. Re:Self-insure by NostalgiaForInfinity · 2015-07-10 09:19 · Score: 1
  
  In this case, the government should either demand a discount from SpaceX in order to absorb the risk of launch loss,
  The government can "demand" whatever it wants. But if this were a free market transaction, SpaceX would, in fact, be raising its prices by roughly the same amount as an insurer would.
  
  Launch losses are a cost of doing business - pricing + negotiating power
  In a free market, "negotiating power" has no influence on costs. Any rational business is simply going to want to make roughly a market return rate on their investment after all risks have been taken into account. Negotiating helps people to find the best of a number of otherwise fair deals, not to give one party a financial advantage.
  Of course, what your thinking reveals is the insight that this is not a free market transaction but crony capitalism. That is, the government forces tax payers to give up money that is then handed off to its favorite private companies. In those kinds of transactions, "negotiating power" does matter; that's the economics of corruption, lobbying, influence peddling, and political abuse of power.
2. Re:Self-insure by onthemightofprinces · 2015-07-11 01:10 · Score: 1
  
  It's not like a rocket exploding is an act of God or something, it's the result of shoddy work and/or testing. Therefore SpaceX should be the one to shoulder 100% of the cost of a failed launch. It's not like if you order a computer from a shop and it arrives in broken pieces, the shop can turn round and say 'oh well, whaddya say, you pay for 80% of it, we'll cover the rest!'
Re:Elon Musk traffic down by bobbied · 2015-07-10 08:55 · Score: 1

Check on the June 15, 2007 launch. Where the flight wasn't a total failure, the vehicle failed to reach the intended orbit due to a valve failure.
So not perfect reliability for even the Atlas V, which has one of the absolute best and longest records flying in rocket science.

--
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Re:yes thats it, pander to another industry by Daemonik · 2015-07-10 10:45 · Score: 1

There is quite a difference in companies partnering with NASA, and thus needing NASA to succeed for their own growth, and corporations actively competing with NASA for their profits, where NASA's success is a threat. Because that is the goal, make no mistake, for the corporations to carve out all of the profit from NASA, until NASA will be lucky if they have funding to launch a bottle rocket.
Re:Insurance??? by bobbied · 2015-07-10 10:59 · Score: 1

Are these things not insured anyways?

Well, when the insurance company says "Sure we will write insurance for that $110 million, just cut us a check for $110 Million.." you just don't do it. Besides, it's usually less expensive to "self insure" (i.e. take the risk yourself), especially if you know you will succeed.
I'm not sure if they could buy insurance for the vehicle, given their previous track record. I wouldn't bet they will succeed on the next launch myself and if nobody wants to write insurance at a reasonable rate, you just take the risk yourself.

--
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Re:Why are CEO's of companies losing money paid? by NostalgiaForInfinity · 2015-07-10 11:01 · Score: 1

Same argument goes for the government and the programs you denigrate.
No, the same argument doesn't work. Those programs were passed with the promise of actually improving things, not stemming a worse decline. And if you look at the data, the start of the decline coincides with the start of those programs. Public choice theory tells you why these programs don't work: they are subject to regulatory capture and rent seeking. Both economic theory and empirical data clearly tell you the same thing: these programs are harmful.
And if the economic examples don't convince you, look at other regulations and laws intended to safeguard and help the public: the fugitive slave act, eugenics and forced sterilizations, segregation, internment of Asian-Americans, and one of the worst killers, governmental agricultural and nutritional policies. And many of the people supporting those despicable programs are still the heroes of American progressives, the same people who are pushing a new generation of extremely harmful programs now.

Without them the robber barons
Do you know who the "robber barons" were in American history? Railroad and steel industrialists, who obtained their wealth through government handouts and government granted monopolies. The robbed the public by corrupting politics.

The answer is to reverse the corruption by corps and rich CEO's
Correct, corruption is the problem and reversing it is the answer.
If you try to pass more laws to fix the rent seeking and corruption of past laws, how do you imagine that works? Do you think there is a sudden outbreak of selflessness and competence in Congress? Of course not. If you pass more laws and regulations, you are going to get more of what we already have: more crony capitalism, more rent seeking, more regulatory capture.
To reverse the corruption, the only viable choice is to reduce the size of government and regulation. Government corruption, rent seeking, and crony capitalism are simply roughly proportional to the size of government.
Well there goes half the budget... by bobbied · 2015-07-10 11:03 · Score: 1

Didn't congress give them but $230 Million for this kid of thing just recently?
Dang, this is half the year's budget. It's going to hurt the commercial crew budget. I guess this just validates the position of congress then that Space X just isn't ready enough to get their stuff human rated and they apparently need some more time to work out the kinks... Shame they blew up almost a half of the budget though...

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"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
1. Re:Well there goes half the budget... by Mirar · 2015-07-10 19:52 · Score: 1
  
  Doesn't SpaceX so far have a much better track record of not blowing stuff up than NASA? Certainly better than the russians.
  If you find a magic solution that doesn't fail sometimes (used to be SpaceX) then I'm sure NASA is interested. ;)
Of coure private companies should be allowed to... by HiThere · 2015-07-10 11:43 · Score: 1

Of coure private companies should be allowed to investigate their failures. They just shouldn't have an exclusive right to do so. They pay for their investigation, the government pays for it's investigation, any other involved parties pay for their investigation. The data isn't kept secret. (Not being secret doesn't mean that what it means will be obvious, hence the plausibility of multiple investigations.)

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I think we've pushed this "anyone can grow up to be president" thing too far.
Re:yes thats it, pander to another industry by kenai_alpenglow · 2015-07-10 12:38 · Score: 1

My guess would be the amount of direct oversight. If you're working directly with the contractor you have a lot more surveillance activities you must do. If it's COTS (Commercial off-the-shelf), the required surveillance (& the cost associated with it) drops quite a bit.
Still Cheaper by BeemanIT · 2015-07-10 14:00 · Score: 1

All I'm going to say is it's still cheaper than NASA building one and it blowing up.
Re:yes thats it, pander to another industry by queazocotal · 2015-07-10 15:26 · Score: 1

NASA is _terrible_ at designing rockets.
They do it at great expense and time.
http://www.nasa.gov/pdf/586023...
Page 9 - Spacex tool ~440M to develop falcon 9. A more typical NASA approach might take 1.4 billion.
pogoing engines by electrosoccertux · 2015-07-10 17:07 · Score: 1

didn't do enough of them. there were design issues that would have surfaced . wikipedia on a friday night when you're bored
BS by samantha · 2015-07-10 17:51 · Score: 1

When did NASA pay for any of its failed launches? When did the big boys it usually contracts with pay? When did the Russians pay for their failures? This is bullshit.
Re:yes thats it, pander to another industry by KGIII · 2015-07-10 19:15 · Score: 1

I am pretty sure that the money had some conditions with it as well. That may not make it right but let us not pretend that NASA is not getting something for its money.
That being said, how much did it cost last time in inflated dollars? I do not know. I think that may be a good metric to start with and then realize what we may get from this. Then decide if you support it or not. You do not even have to justify it. Just do not like it.

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"So long and thanks for all the fish."
taxpayers or ... taxpayers! by Mirar · 2015-07-10 19:49 · Score: 2

So the risk instead would be spread out into a higher launch fee (taxpayers) and higher insurance fees for everyone (taxpayers).
The insurance would make the cost of the launch a lot higher, and NASA (taxpayers) would have to pay that.
Money doesn't grow in insurance companies either - they are re-insured and the cost is spread out to everyone.
But I guess it would look better for NASA?
(That said, I thought insurance was involved already. At least for individual projects blowing up?)
Re:Elon Musk traffic down by Mirar · 2015-07-10 19:55 · Score: 1

Also, isn't each launch with SpaceX a _lot_ cheaper than any Atlas V launch?
I haven't googled the figures, but a guess is that you can blow up 20% of the SpaceX launches and still be cheaper than if you did all the launches with Atlas V.
Re:Perfectly possible for insurance to lower costs by KGIII · 2015-07-10 20:08 · Score: 1

You know, NASA is not just handing this money to them, right?

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"So long and thanks for all the fish."
Re:Elon Musk traffic down by bobbied · 2015-07-13 12:00 · Score: 1

Well, unless you are riding in one of these, I suppose a 20% failure rate is great at half the cost..

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"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101