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Taxpayers Need To Start Charging Elon Musk Rather Than Paying Him


Critics of the Apollo program argued it was extravagantly wasteful: the money spent sending men to the moon could have been put to better use here on Earth. Maybe so. But at least all those taxpayer dollars went toward putting men on the moon. And they did actually get to the moon.

Today, the National Aeronautics and Space Administration specializes in putting taxpayer dollars into the pockets of crony capitalist chieftains such as Elon Musk, whose SpaceX operation manages to get NASA to pay him to use its launch pads and other infrastructure—all provided at taxpayer expense. He also doesn’t cut NASA in when he uses its facilities—our facilities—to launch rockets carrying private cargo, meaning he effectively gets paid for it twice.

That’s once in the check he gets from the private business whose cargo his rocket is carrying; then again in the de facto subsidy he gets for the free use of NASA’s equipment at the Kennedy Space Center in Florida. Why isn’t Elon paying the freight, as opposed to blowing it up?

Incidentally, that happens a lot. Over the past five years alone, SpaceX has lost the same number of rockets as NASA did space shuttles over the 30 years it operated them. And the shuttle wasn’t a money-making machine for politically connected crony capitalists such as Musk. Taxpayers funded it, but no private citizens got a check from taxpayers.

The shuttle even made some money for taxpayers. Private businesses paid NASA to carry satellites into orbit, recovering some of the cost of building that infrastructure. The shuttle also did things useful for the public, like put the Hubble telescope in orbit. It has given humanity an unprecedented view of the universe, and not on pay-per-view.

Paying Private Organizations to Use Public Property

Musk turns that arrangement upside down. This is a major point of departure from previous practice. During the Apollo and Shuttle programs, private contractors made money, certainly. But the programs were for public rather than private benefit. The Saturn V rockets didn’t carry corporate cargo, with NASA paying the corporations for the privilege, and there was competitive bidding for the contracts to design and build the rockets, the command service module, and the lunar module.

Today, there are sketchy Space Act Agreements (SAAs) that allow NASA to disgorge money for “other transactions” to connected crony capitalists like Musk, with little oversight and very few strings attached. Originally, these SAAs were meant to “advance NASA mission and program objectives” by cutting red tape and opening the bidding for NASA contracts to smaller, more efficient companies.

But because of Musk’s media-confected star status, a number of SAA contracts have gone to him, largely behind closed doors, with little oversight or accounting. Often these activities have nothing to do with “NASA mission and program objectives,” including launching satellites for private businesses and even for foreign businesses. These aren’t by any means nefarious, but Musk ought to be doing them on his own dime.

SpaceX has pocketed an unprecedented $30 million in the form of a Space Act earmark that wasn’t open to competitive bidding, which is typical of these insider trading-esque, inherently shady deals. Also, each new cozy deal makes it harder for anyone else to even be considered for a future deal. You have to “know someone,” and they have to know you. NASA seems to know Musk and SpaceX entirely too well.

Public Cost for Private Benefit

Smaller companies without the political pull and media fawning a celebrity like Musk enjoys never get a shot and, once the money’s handed out, Musk does not have to account for how it was spent.

Nor has Musk ever been charged rent for using taxpayer-funded facilities such as launch pad 39A and the infrastructure at the Kennedy Space Center upon which his trouble-prone rockets depend. Musk uses these facilities—paid for by you and me—so he can make a buck (lots of bucks) launching his rockets and the stuff they carry, even when they carry government stuff.

When they don’t go up in smoke.

Speaking of which: Who pays for the damage done to NASA’s—to taxpayers’—property when they do go up in smoke? It isn’t SpaceX. Certainly not the billionaire king of crony capitalism. But why should any of this be? Where is the congressional oversight? NASA is an agency of the federal government, but it should not be able to spend taxpayer money at will on whatever it deems appropriate without giving a full review to taxpayers’ duly elected representatives, especially in cases like this, where there is lots of spending and not lots of evidence of public benefit.

Whether the activities of SpaceX have merit or not isn’t even the primary issue. It’s who gets to decide whether they have merit. Should it be Congress, and representatives accountable to taxpayers via the ballot box? Or should it be unelected apparatchiks within a federal agency, accountable to no one?

Musk hasn’t yet taken anyone to the moon, let alone Mars. But he is taking us all for a ride.