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That’s Quadrillion with a Q

Hyperinflation aside, real value creation has to be constrained at least partially by the boundary conditions of the economic system

There was a period in 2010-2011 when commentators would say, often in wide eyed voices, “That’s Trillion with a T.” They wanted to make sure the listener was fully aware we were entering new uncharted economic territory and would no longer be talking in such pedestrian amounts as billions or even hundreds of billions. Trillions have, in fact, become quite commonplace in our dialog. Almost nothing worth a vigorous national debate involves mere billions anymore. Our annual budget deficit is in trillions, we increase our debt ceiling in increments of a trillion or more, Quantitative Easing exceeded a trillion, the Iraq/Afghanistan War cost over a trillion, we owe China more than a trillion, and some believe that if only the Stimulus Plan had been a trillion we would have had a faster recovery. How silly of us to think we could stimulate our economy with mere billions. But, surely “Trillions” is as far as it goes – right? We won’t in a few decades hear commentators say “That’s Quadrillion with a Q” – will we? Hyperinflation aside, real value creation has to be constrained at least partially by the boundary conditions of the economic system; which in this case would be the finite surface area of the Earth, its limited extractable and recyclable resources, the amount of population such area and resources can support productively, and the ability to generate enough energy, alternative or otherwise, to power it all. Whatever our future, surely it cannot involve Quadrillions, can it? The United Nations predicts, under its medium fertility variant set of assumptions, that the Earth will reach a population of 10 billion around 2080 and enter a prolonged period of rough stabilization at that level. While this is a 10x gain from approximately 1 billion people in 1800, no one seems to be suggesting 100 billion people is doable in another 280 years, say by 2360. Our land, resources and energy sources may maintain modest economic growth rates for another century or so, but has anyone suggested 520 years of such growth (the period since Columbus) or even 386 years (the period from the Dutch “purchase” of Manhattan where our office sits)? Surely, we are heading toward an era of slower growth to, at best, the “Stabilization” the U.N. hopefully predicts.

What does a constrained future without growth even mean? Can the human psyche even handle that prospect?

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Asking why we should spend money exploring and colonizing space is like asking why we are human. We’re going to go.

Will “Trillions” be it then; the apogee of human economic value creation? What does a constrained future without growth even mean? Can the human psyche even handle that prospect? Just think about these dates. 2080 is only 68 years from now. Our grandchildren will experience this event; a maxed out Earth. Is this what we want to leave our grandchildren, double digit trillions of debt and underfunded entitlements and no growth? Let’s hope not. Growth with its creative destruction, business cycles and disproportionate allocations of wealth may at times be painful, and even seem unfair, but it is a heck of a lot better than decline, stagnation or even stabilization. What do you do when the land of opportunity stops having opportunities? To many of us in the space community, the answer is obvious. You look for new land. The problem is that humanity is “stuck” on Earth – its lovely, but oh so finite cradle. If you stop thinking about a “stabilized” Earth as the ultimate destiny of Humankind, then there are no limits to human progress. That has always been the promise of Space. It is our untapped reservoir of resources, growth and opportunity. We humans do not want boundary conditions constraining our growth. We want unlimited frontiers. Perhaps no one has put it better or more simply than Rick Tumlinson of the Space Frontier Foundation, “we are here, to go there.” Earth is just the cradle. Our DNA wants off planet. Not just for the survival of our species against some unpredictable cataclysm, not just to explore, but for long term growth and opportunity. Asking why we should spend money exploring and colonizing space is like asking why we are human. We’re going to go. We have to go. We just need to figure out the most economical and judicious path forward. That brings us back to billions and trillions. NASA’s 2013 budget is only $17.7 billion, roughly half of a penny of the U.S. tax dollar. Normally, debate over such a “tiny” amount would not make it onto the front pages of major media and into Presidential debates. No one’s talking about Trillions for Space. But somehow, spending money on Space becomes a supercharged debate of extremes and not necessarily along partisan lines. On the one extreme, NASA’s budget should be zeroed out entirely to flow more money to social welfare programs or at least limited only to national security interests. If an Earth-bound existence is our future, we might as well accept it and start funding the stabilization or defending our pile – right? Two missions to Mars were, in fact, recently cancelled. At the other extreme, are the proponents of humans on Mars ASAP, almost regardless of the cost and budgetary trade-offs. The

It is not too hard to actually get to Trillions when you add up satellite communications, GPS, and hundreds of other computer and healthcare technology spinoffs

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promised future of our childhood has already been delayed far too long for these people. Let’s get with it already! For these enthusiasts, hundreds of billions of expenditures are easily justified. Actually, these enthusiasts make a good point. The benefits have been extraordinary, if largely under reported. It is not too hard to actually get to Trillions when you add up satellite communications, GPS, and hundreds of other computer and healthcare technology spin-offs. A great summary of recent benefits is described each year by The Space Foundation in The Space Report – The Authoritative Guide to Global Space Activity. I highly recommend it. In the middle of the debate are those who argue the pros and cons of a status quo, federally lead space program versus a new commercially lead space industry and what the relative budget priority and role of government should be within “sane” levels of expenditure. My favorite new proposal within this middle ground of recommendations is a petition to increase NASA's Budget to 1% of the Federal Budget. As Dr. Neil deGrasse Tyson says, for “a penny on a dollar - we can transform the country from a sullen, dispirited nation, weary of economic struggle, to one where it has reclaimed its 20th century birthright to dream of tomorrow.” We would still only be talking $36 billion, or $0.036 Trillion. If Wall Street focuses on next quarter and private equity investors look at five year investment horizons, who is in charge of investing for the next century? Dr. Neil DeGrasse Tyson went on to ask the Senators at his Committee hearing, “how much would you pay for the universe?” That question hits right at the heart of the problem. If Wall Street focuses on next quarter and private equity investors look at five year investment horizons, who is in charge of investing for the next century? Who is in charge of making sure mankind doesn’t max out here on Earth in our grandchildren’s lifetime? Isn’t that something we want our national government to be doing? But nations and kings have historically been just as near sighted as investors. My favorite example of the inability of governments to appreciate long term value potential is the 1763 Treaty of Paris ending the Seven Years’ War. As part of the treaty, England gave France the choice of either keeping Guadelope, a Caribbean island with sugar plantations or what was then called New France, an area significantly larger than what the U.S. later acquired in the Louisiana Purchase. France chose the sugar (Note: this huge tract of land was so inconsequential that England later traded the NonCanadian part back to France under a subsequent treaty). 245 years later, from our 2012 perspective, that choice seems

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ludicrous. But for France, Guadelope had a larger European population, a higher GDP and was easier to defend. Think of the space corollary to that choice today. Earth orbit has hundreds of satellites, billions of dollars of commerce and is easier to get to than deep space, but is it really worth more than the rest of the universe? Will our descendants think so 245 years from now from their Martian timeshares or just laugh at the very idea? Isn’t NASA being stuck investing largely in low Earth orbit just such a situation; supporting the sugar plantations versus getting on with the hard work of frontier settlement and expansion? Wasn’t the United States supposed to be the first country to think grand and long-term? Jefferson did, after all, acquire New France from Napoleon, and we developed it. We understood manifest destiny – right? We even bought Alaska from Russia, even though by then such things were already labeled as “follies.” These prior US governments understood long term investment and the value of undeveloped frontiers. For small investments they created enormous potential for the nation. Well it’s 2012. Where’s the Manifest Destiny for this Millennium? Perhaps this petition for a penny on the dollar is our generation’s chance to start getting it right. It is still a small investment, but it may give NASA enough funds to start building frontiers again. Politicians can then stop fighting over which district loses which space program jobs and get on to the real work of pioneering space and helping commercial industry take over activities in Earth orbit. Let industry run the sugar plantations and build a more prosperous island community. Let NASA explore the frontier and then help industry colonize the new continent, because when you get right down to it – Trillions just aren’t going to be enough. There are Quadrillions out there and we want them. Penny for your thoughts - future?

Earth orbit has hundreds of satellites, billions of dollars of commerce and is easier to get to than deep space, but is it really worth more than the rest of the universe?

By Hoyt Davidson Near Earth LLC

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