NASA's balance sheet

Cecil's Columns/Staff Reports
1

While it is true that a look at the current balance sheet will show an operating deficit, it is important to remember that NASA, especially during the heydey of the space program, was essentially one big procurement agency. The money spent was (and, for all I know, still is) going right back into the economy, providing jobs at contractors like Lockheed and Boeing. So the profits went to private companies, not the agency.

And, of course, pretty much our entire modern medical system is critically dependent on technologies that came out of NASA telemetry. The systems that monitored the astronauts are now everyday fixtures in hospitals and ICUs.

2

When starting a thread to comment on one of Cecil’s columns, it’s helpful to other readers if you provide a link. Yes, the column is on the front page now, but in a week or so it will have fallen into Archives and be harder to locate. So, providing a link saves searching time, and ensures that we’re all on the same page.

In this case: Is NASA the only federal agency that makes a profit? - The Straight Dope

3

The modern day computer chip was also developed by NASA for the Apollo program. They had to have it to build the miniaturized computers on board. Intel and I believe Fairchild were involved in this. The initial failure rate was so high they would likely never have developed it because of the cost. However since Apollo had to have it NASA kept the funding going until it was finally produced. We might not have the modern PC if it weren’t for Apollo.

My understanding is that also, through development of the moon boot, Nike and Adidas used that information to develop their first specialized running shoes opening a new footware industry which seeded many billions of dollars back into our economy. Likewise, the all weather tire was based on data resulting from the moon rover’s tires that the astronauts drove around on the moon. Even though NASA itself may not be profitable many spin-offs from it’s R&D have created huge fortunes in the private sector. I find it curious that we don’t raise their budgets rather than tightening them.

4

The above claim is a combination of half-truth and nonsense. Robust and reliable microprocessor-on-a-chip integrated circuit and mass-production technology was developed for the D-37C DCS for the NS-17 Inertial Missile Guidance Set (MGS) for the LGM-30F ‘Minuteman II’ ICBM. This IC layout was developed and produced by Autonetics, and later adapted for use with the Apollo Guidance Computers (AGC) on the Command Module (CM) and Lunar Module (LM). There was also a less sophisticated Abort Guidance System (AGS) on the LM in case the AGC failed. Intel didn’t even come into being until the late 'Sixties and has never been involved in the production of specialty processors for the space program or military applications; Intel is strictly in the business of mass-produced consumer grade processors.

As far as the concern of the issue taken by the o.p., to wit that the value of NASA should include technology developed for the space program that has come in to common use, it is a point that is both overstated by space advocates and misses the point. The American space program is neither a profitable enterprise (by intention) nor it is intended to provide near-term benefit to the populace at large. The space program has two primary goals; one is scientific exploration, and the other is non-military symbolism of the status of the United States as a technologically dominant world power. Neither of these is a profitable endeavor, and the efficacy of NASA as an organization, whatever other flaws it may have, should not be judged on this basis.

Stranger

5

Perhaps that is true in the language of Mil-Spec, but most people do not regard the Xeon, for example, as “consumer grade”.

6

They’re not producing specialized microprocessors held to rigorous operating specifications required by the aerospace and military contractor industries; how about that? At any rate, Intel was not involved in the initial development of IC technology; they are a relatively late player come to the game.

Stranger

7

OK, I was partly incorrect in my earlier statement. Here’s the scoop as I know it according to Paul Saffo, Silicon Valley technology forecaster and a consulting associate professor in the engineering department at Stanford University. Responding to a question I had about this very issue on a radio program, he stated that in terms of integrated circuits and microprocessors, which NASA needed to be extremely reliable, NASA funded as much research as was needed in that area. This gave many of the early microprocessor companies a big start in this field including Intel and Fairchild. In turn, once they’d developed them, this allowed them to be able to produce them reasonably inexpensive which enabled hobbyists in the 1970’s to play with them. And we’ve seen where some of these hobbyists, such a Wozniak, Jobs, and others took it.

8

Regarding the original article, I’d like to toss out one other Government agency that is (currently) running a profit: The Social Security Administration.

Each year going back to 1983, the SSA has taken in more revenue than it has paid out in benefits. Current projections for the agency expect this to continue until roughly 2016. That will have been 33 years of continuous profits (obviously what they’ve done with those is a question for GD or the Pit), and may be worth mentioning on this list.

9

Do you have a cite for the tire data spin-off? The lunar rover’s tires were made of wire mesh with titanium strips riveted on in a chevron pattern similar to the standard off-road pattern already in use for several decades, and were designed for its expected travel surfaces of dust, gravel and rock. I can’t see how the rover’s tires had any effect on the development of rubber all-weather tires for use on dry, wet, and snowy pavement.

10

Here is one I found. Do a word search for tire among a number of other spin-offs.

11

Cash in greater than cash out doth not a profit make.

12

True. However, Revenue > Expenses kinda defines profit (in an overly simplified way). And by that more traditional definition of profit, the SSA certainly is profitable. Now, if you want to raise the bar and say profit should only be determined based on future revenues and future expenses, and you define the future as sometime after 2016, then sure - they won’t be profitable then. It just seems like a bit of an arbitrary height to raise that particular bar.

13

I’m no accountant, but I know that debt goes on the balance sheet as a liability.

14

Well - first of all, the balance sheet is not used to report profitability. That would be the Income Statement.

But aside from that - are you really saying that, when an organization reports profitability for a period in time, that it must include liabilities estimated indefinitely into the future? So when IBM, for example, reports profitability for FY08, that it must include liabilities indefinitely into the future, including through 2016, or 2020 or 2050? I can assure you that this is not the case - not only would it not be relevant for the current reporting period, but I don’t even know how an organization could do that. How, for example, could IBM be expected to anticipate it’s payroll obligations for FY2016, or it’s R&D budget for FY2020? The answer is: they can’t (not with any validity, anyway).

The bottom line is that profitability is reported for a period in time, typically a fiscal quarter or a fiscal year. Here, for example, is IBM’s Income Statement for the past 5 fiscal years. You’ll notice that they do not, in fact, try to estimate any and all liabilities indefinitely into the future.

As I noted, when any organization reports profitability, it’s for a specific period in time. For the SSA, they have shown that, for each fiscal year going back to 1983, they have in fact been profitable. And current projections show this continuing until roughly 2016. But hey - let’s look at actual numbers, shall we (link - sorry, it’s a PDF):

For FY08 Total Income to the SSA was $805 billion (a combination of contributions, taxation and interest). Contrast this with total expenditures of $625 billion (mostly in benefits, but with an administrative expense of less than 1% or $5 billion). This gives us a net INCREASE in assets for FY08 of $180 billion. That’s what I call profit.

Now again - if you wish to argue that at some point in the future, the SSA will no longer become profitable, then I could support that. IF current projections are valid, and IF nothing changes, then IN 2017, the SSA will no longer be running at a profit. But for right now, and using any generally accepted definition of profit, the SSA absolutely is profitable.

15

First, Nike got their first idea from a waffle iron. http://en.wikipedia.org/wiki/Nike,_Inc.#Origins_and_history

Second, what does the second half of your sentence mean? The bit about the economy?

16

The Apollo Lunar Rover did not have rubber tires. On the moon, it used metal mesh. However, in ground testing they did use rubber tires. I’m not aware if they had any special design characteristics for those.

17

So if I borrow a billion dollars, I can report it as profit?

18

Wow - I’m not even sure if this is a serious question or a woosh (I don’t think it can be serious since there is so much wrong in just 1 short sentence, but I’ll try to answer it anyway).

First - perhaps you can show me where the SSA is borrowing money. As I demonstrated (and linked to) - the SSA is doing the exact opposite. Because they have EXTRA money - they are actually lending it out - and making money on that as well. So IF you make a profit (in a specific reporting period), and then reinvest that profit to make more profit - then yes, you can report that as . . . . wait for it . . . . . profit.

But to specifically answer your question - NO. If you borrow a billion, you can’t report that as profit. Luckily this non-sequitor has NOTHING to do with the topic at hand.

Perhaps your confused about the notion that profits are reported for a specific period. So I can understand how much you know about this stuff, will you at least acknowledge that profits are reported for a specific period of past performance (typically a fiscal quarter or fiscal year)?

19

The point is that, every month that every person under (for simplicity’s sake) 65 lives, the SSA incurs debt.

20

Actually - no it doesn’t. It does have future liabilities - which it should account for. A pro forma, for example, would include this. However, the profit / loss (income) statement for FY08 most certainly does not include every possible debt that the SSA may incur indefinitely into the future. But of course, I’ve already discussed this.

Look - I’ve posted logical arguments, data, facts and cites all to support the fairly basic claim that the SSA is currently running at a profit. You have so far posted a number of 1-sentence driveby’s which seem to argue the opposite. Perhaps - rather then continue to bang my head against the wall, I could ask you for one simple thing. Could you please provide any kind of cite showing that for FY08 the SSA operated at a loss (FY08 is the last year for which there is data - and I’ve already posted a link to the SSA website, if that’ll help). Or, if that’s too high a bar, we could expand it to the last 25 years. How about any cite showing that the SSA operated at a loss, for any period of time, going back to 1983?

Otherwise, it appears that I can continue to craft a bunch of posts, complete with cites, supporting documentation and examples, and you can continue to ignore them completely.