Ideas for (U.S.) Congress for supporting private space efforts

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l...@tour2space.com

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Jan 18, 1999, 3:00:00 AM1/18/99
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I composed the following for indirect submission to
Prospace and their upcoming legislative plans. I hope that
they will give some of the ideas serious consideration. But
I also believe that these ideas may be of general interest
to s.p.p. readers.

POTENTIAL ITEMS FOR LEGISLATIVE ACTION
IN SUPPORT OF PRIVATE SPACE ACTIVITIES DESIGNED
TO PRODUCE LOW-COST ACCESS TO SPACE

1) As long as we are stuck with the income tax, why not use the
tax code to provide some effective incentives for low-cost space
launch? One such incentive would be to allow investors in a space
launch company to deduct directly the R&D expenses incurred
by the space launch company for the development of a new
launch vehicle that promises to reduce the cost of access to
space. Investors could also be permitted to deduct directly any
R&D tax credits that might be available. This provision in
the tax code could help companies of all sizes. However, it
would likely be most useful to new companies that are
currently penalized by the tax code by not having any income
to offset R&D expenses and tax credits.

2) Restructure the IR&D (Independent Research and
Development) program. At the present time, IR&D is available
only to established companies with existing government
contracts, since IR&D expenses are charged as a line item
against contracts for purchasing items that are not necessarily
related to the IR&D. Under the proposed restructuring, part
of the IR&D program would become an INDIVIDUAL Research
and Development program, under which qualified individuals
would receive limited IR&D drawing rights sometime during
their lifetimes. As an initial, experimental pilot project, various
proposed space launch companies with proposed vehicles that
promise to lower the costs of access to space would be able
to designate a limited number of engineers, technicians,
manufacturing personnel, and other individuals that could
further the viability of the proposed launch vehicle. Since
the designated individuals would be expending their limited
IR&D rights, the designated individuals would likely provide
a meaningful peer review from the bottom up. Successful
commercial programs would reimburse the IR&D program,
thus providing a means for reinstating individual IR&D
drawing rights. Non-commercial projects might be
"reimbursed" either by a transfer of funds or by award
of limited (scarce) certificates of achievement by various
government agencies that would judge the results -- not
promises -- of a particular project. If the pilot project is
successful, then the concept might be extended to other,
or all, R&D projects.

3) Provide launch vouchers to university and other
appropriate investigators. These launch vouchers would
be for a stated dollar amount of launch services. The
individual university investigators would be free to make
their own risk versus cost tradeoffs.

4) Provide for three categories of government payloads:
a) payloads that are so essential that they must be launched
on proven launch vehicles; b) payloads, some of which
might be launched either on a proven launch vehicle, or
on a promising new launch vehicle; and c) a new category
of "opportunity payloads," that are not essential, but that
might quite beneficially take advantage of the very low-cost
access to space that might become available with a newer,
but high-risk launch system. Firm commitments for the
second and/or third class of payloads could be quite useful
for raising private capital -- even though no government
funds would be actually transferred unless the new launch
vehicle has successfully completed an appropriate test
program, has become operational, and still promises to
deliver the performance for the price that was the basis
for the original commitment.

5) Encourage unsolicited R&D proposals by providing
set-aside appropriations for unsolicited proposals. The
SBIR program has effectively killed the unsolicited proposal
program. Allow sequential contracts under the new
$100,000 streamlined procurement procedures -- thus
enabling a series of small-task contracts based upon
the results, not promises, of a series of tasks that
advance the viability of a new, high-risk R&D project.
This approach could be especially valuable for
initial investigation of promising new ideas proposed
by the newer and smaller companies. OMB A-109
singles out such newer and smaller as promising sources
of innovation. Present procurement practice -- as
distinguished from procurement policy -- essentially
precludes companies not currently capable of building
a proposed system from even studying such a system.
A series of unsolicited proposals, each of which would
be under the $100,000-limit might enable newer, smaller,
innovative companies to bring a new concept to a viable
stage of development for minimal engineering and
administrative costs.

6) Don't provide loan guarantees for specific projects
where the government tends to pick winners. This can
harm entrepreneurial companies. Loan guarantees for
a specific project may encourage an idea that does
not otherwise make good business sense. If
the idea is to help make desirable projects more
attractive from the economic sense, this can probably
be done better by initiating one or more of the five
ideas listed above. If loan guarantees are used at all,
they should be generally available, and not be limited
to projects specifically endorsed by NASA or any
other government agency. Moreover, loan guarantees
should only be used for enhancing projects that are capable
of attracting investors without loan guarantees.

7) Proposals to privatize the ISS and/or the Space Shuttle
may do more harm than good. The basic problem in the
first place is that NASA is heavily involved in operations,
rather basic research and basic technology support of the
aviation and space industry. NACA originally got the job as
NASA because NACA was superb at serving the aviation
community without getting involved in operations that
competed with industry and the military. The harm has
already been done. Let the ISS run its course. But
preclude NASA from any further, direct involvement
in operations that compete with what industry or the
military can do. Within that context, the X-38 is a
logical and useful part of the ISS. Privatizing is not
the answer, Precluding NASA from building a "Shuttle II"
or a new space station is part of the answer. In the future,
NASA should concentrate on aviation and space research
ala its NACA roots. Manned expeditions to Mars and other
planets may be justified. Further expeditions to the moon and
the asteroids may already be the proper domain of private
enterprise -- incentivized by NASA contingent commitments.
NASA projects related to the moon and asteroids should be
conducted in such a way as to encourage industry-led operations
-- such as transportation and "general-store" support for
lunar and deep-space operations.

I proposed most of the first five of the above points
while I was a reappointed charter member of COMSTAC,
DoT's Commerical Space Transportation Advisory
Committee. For the first four years of COMSTAC's
existence, I was the only member primarily interested
ir reusable launch vehicles (RLVs).

Len Cormier
Third Millennium Aerospace, Inc.
l...@tour2space.com ( http://www.tour2space.com )

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Kwr...@rockisland.com

unread,
Jan 18, 1999, 3:00:00 AM1/18/99
to
l...@tour2space.com wrote:

>I also believe that these ideas may be of general interest
>to s.p.p. readers.

Len,
It is refreshing to see a post that is actually about space policy.
You have some thoughtful and interesting ideas.
Lets consider the first one:

>1) As long as we are stuck with the income tax, why not use the
>tax code to provide some effective incentives for low-cost space
>launch?

The first reason why not is that tax breaks for special interest are
very much out of favor with politicians and the public. The tread is
towards a simplified tax code.
What benefit does low-cost space launch really give Joe six-pack ?
There are plenty of industries that directly benefit the public at
large. Pharmaceuticals, environmental cleanup,
any number would have a better case for a tax break.

> One such incentive would be to allow investors in a space
>launch company to deduct directly the R&D expenses incurred
>by the space launch company for the development of a new
>launch vehicle that promises to reduce the cost of access to
>space. Investors could also be permitted to deduct directly any
>R&D tax credits that might be available

I am unclear how this would work. If I invest in company X how do I
know how much money is spent on R and D and how much is spent on
other company activities ?
Who gets to deduct what exactly ?
The devil is in the details, do you have any specific language for a
bill ?

l...@tour2space.com

unread,
Jan 19, 1999, 3:00:00 AM1/19/99
to
In article <THPo2.32251$9S3....@nntpserver.swip.net>,
Kwr...@rockisland.com wrote:

> l...@tour2space.com wrote:
>
> >I also believe that these ideas may be of general interest
> >to s.p.p. readers.
> Len,
> It is refreshing to see a post that is actually about space policy.
> You have some thoughtful and interesting ideas.
> Lets consider the first one:
>
> >1) As long as we are stuck with the income tax, why not use the
> >tax code to provide some effective incentives for low-cost space
> >launch?
> The first reason why not is that tax breaks for special interest are
> very much out of favor with politicians and the public. The tread is
> towards a simplified tax code.
> What benefit does low-cost space launch really give Joe six-pack ?
> There are plenty of industries that directly benefit the public at
> large. Pharmaceuticals, environmental cleanup,
> any number would have a better case for a tax break.
>

Actually, if it were a choice between a simplified tax code
-- or even a consumption tax vs an income tax -- I would be
heavily in favor of the simplified tax (or consumption tax)
-- and getting rid of all special interest tax breaks. However,
given that things are otherwise, I think that this "special
interest" could be as salable as a lot of others -- most of
which probably don't benefit Joe six-pack.

> > One such incentive would be to allow investors in a space
> >launch company to deduct directly the R&D expenses incurred
> >by the space launch company for the development of a new
> >launch vehicle that promises to reduce the cost of access to
> >space. Investors could also be permitted to deduct directly any

> >R&D tax credits that might be available
> I am unclear how this would work. If I invest in company X how do I
> know how much money is spent on R and D and how much is spent on
> other company activities ?
> Who gets to deduct what exactly ?
> The devil is in the details, do you have any specific language for a
> bill ?

Good questions. Right now limited partnerships are excluded from
R&D tax credit pass throughs. However, a limited partnership
approach would result in a limited partner's knowing what goes on
and what the partner can deduct, etc. If the Schedule K's don't
jibe with what the IRS expects, the company conuducting the R&D
would have to provide the proper answers. Another approach would
be what I call "R&D bonds/debentures." Again, the purchaser of
such bonds/debentures would know exactly what he/she could deduct.
He/she could deduct the whole principle value of the bonds/debentures.
If the bonds/debentures aren't legitimate, the company issuing
them would have to answer to the IRS, SEC, etc.

Best regards,
Len (Cormier) for MMI

Kwr...@rockisland.com

unread,
Jan 19, 1999, 3:00:00 AM1/19/99
to
l...@tour2space.com wrote:

>Actually, if it were a choice between a simplified tax code
>-- or even a consumption tax vs an income tax -- I would be
>heavily in favor of the simplified tax (or consumption tax)
>-- and getting rid of all special interest tax breaks. However,
>given that things are otherwise,

A lot of progress has been made in simplifying the tax code.
You are fighting that trend. You want to be part of the problem, not
the solution. If your position is that a lot of corrupt people benefit
from this kind of tax break and you want to get in on the action, you
are not likely to get widespread support.


>I think that this "special
>interest" could be as salable as a lot of others -- most of
>which probably don't benefit Joe six-pack.

Well, Joe is willing to give tax breaks to keep his NFL team, what are
you offering ?
He is also likely to support a tax break for himself that offsets his
costs of keeping his parents in managed care. Just because ADM still
gets millions for the ethanol rip-off is not justification
for a new tax break that does not help the public.

>> > One such incentive would be to allow investors in a space
>> >launch company to deduct directly the R&D expenses incurred
>> >by the space launch company for the development of a new
>> >launch vehicle that promises to reduce the cost of access to
>> >space. Investors could also be permitted to deduct directly any

>> >R&D tax credits that might be available
>> I am unclear how this would work. If I invest in company X how do I
>> know how much money is spent on R and D and how much is spent on
>> other company activities ?
>> Who gets to deduct what exactly ?
>> The devil is in the details, do you have any specific language for a
>> bill ?

>Good questions. Right now limited partnerships are excluded from
>R&D tax credit pass throughs. However, a limited partnership
>approach would result in a limited partner's knowing what goes on
>and what the partner can deduct, etc. If the Schedule K's don't
>jibe with what the IRS expects

Yikes ! what company is going to want to be beholden to what the IRS
expects ?
If you wanted to rate government agencies that are incompetent and
senselessly malevolent the IRS comes out way ahead of NASA.


>, the company conuducting the R&D
>would have to provide the proper answers. Another approach would
>be what I call "R&D bonds/debentures." Again, the purchaser of
>such bonds/debentures would know exactly what he/she could deduct.
>He/she could deduct the whole principle value of the bonds/debentures.
>If the bonds/debentures aren't legitimate, the company issuing
>them would have to answer to the IRS, SEC, etc.

And the bond holders.
Do they have to pay back the tax ?
Who could buy a bond ?
How much would they cost ? I mean is this in effect, a tax break that
is only available to a person who can invest millions of dollars ?

There are 3 fundamental problems with any tax loophole.
1. The cost of administrating the law. These could be huge, much more
than the cost to the USG of the tax lost. You have put the IRS in a
position of evaluating R&D, something they are completely unprepared
to do.
2. Out right fraud. Just about every new tax loophole attracts all
kinds of criminals. This also compounds the cost of 1.
3. Huge windfalls for unintended beneficiaries. This has been a very
common result. A few years back the big winner on a loophole meant to
help family farms was the Sultan of Brunei.
You run the danger that the largest companies will benefit
the most and thereby increase there domination of the market.

l...@tour2space.com

unread,
Jan 20, 1999, 3:00:00 AM1/20/99
to
In article <_98p2.32840$9S3....@nntpserver.swip.net>,

Kwr...@rockisland.com wrote:
> l...@tour2space.com wrote:
>
> >Actually, if it were a choice between a simplified tax code
> >-- or even a consumption tax vs an income tax -- I would be
> >heavily in favor of the simplified tax (or consumption tax)
> >-- and getting rid of all special interest tax breaks. However,
> >given that things are otherwise,
> A lot of progress has been made in simplifying the tax code.
> You are fighting that trend. You want to be part of the problem, not
> the solution. If your position is that a lot of corrupt people benefit
> from this kind of tax break and you want to get in on the action, you
> are not likely to get widespread support.
> >I think that this "special
> >interest" could be as salable as a lot of others -- most of
> >which probably don't benefit Joe six-pack.
> Well, Joe is willing to give tax breaks to keep his NFL team, what are
> you offering ?

What is the Breaux bill offering Joe six-pack? It is
proceeding. The objections are not coming from Joe six-pack,
but from entreneurs like myself.

> He is also likely to support a tax break for himself that offsets his
> costs of keeping his parents in managed care. Just because ADM still
> gets millions for the ethanol rip-off is not justification
> for a new tax break that does not help the public.
>

You won't find me defending tax breaks or complicated tax
laws. My only point is that if this is the way the game
is played, why not try to get into the game? But, I have
mixed feelings over any tax breaks -- even the type that
I am suggesting. In fact, Kelly, I probably feel even more
strongly than you about special-interest tax breaks.

How about some of the other ideas: i.e. 1) restructured
IR&D, 2) payload vouchers, 3) new categories of payloads for
government commitment to low-cost "opportunity payloads,"
4) encouragement of unsolicited proposals, etc.?


> >> > One such incentive would be to allow investors in a space
> >> >launch company to deduct directly the R&D expenses incurred
> >> >by the space launch company for the development of a new
> >> >launch vehicle that promises to reduce the cost of access to
> >> >space. Investors could also be permitted to deduct directly any

> >> >R&D tax credits that might be available
> >> I am unclear how this would work. If I invest in company X how do I
> >> know how much money is spent on R and D and how much is spent on
> >> other company activities ?
> >> Who gets to deduct what exactly ?
> >> The devil is in the details, do you have any specific language for a
> >> bill ?
>
> >Good questions. Right now limited partnerships are excluded from
> >R&D tax credit pass throughs. However, a limited partnership
> >approach would result in a limited partner's knowing what goes on
> >and what the partner can deduct, etc. If the Schedule K's don't
> >jibe with what the IRS expects

> Yikes ! what company is going to want to be beholden to what the IRS
> expects ?

That's an existing problem, not a new one.

> If you wanted to rate government agencies that are incompetent and
> senselessly malevolent the IRS comes out way ahead of NASA.

You're right, Kelly. It would be at least a close race.

> >, the company conuducting the R&D
> >would have to provide the proper answers. Another approach would
> >be what I call "R&D bonds/debentures." Again, the purchaser of
> >such bonds/debentures would know exactly what he/she could deduct.
> >He/she could deduct the whole principle value of the bonds/debentures.
> >If the bonds/debentures aren't legitimate, the company issuing
> >them would have to answer to the IRS, SEC, etc.

> And the bond holders.
> Do they have to pay back the tax ?

Not if it is committed and expended for R&D purposes -- any
more that Boeing or LockMart would for launch vehicle R&D
that offsets otherwise taxable income.

> Who could buy a bond ?

Anyone, subject to securities laws that might be loosened up
a bit for legitimate high-risk R&D purposes.

> How much would they cost ? I mean is this in effect, a tax break that
> is only available to a person who can invest millions of dollars ?
>

No. I would hope that they would be available to ordinary
people -- even Joe six-pack. The size of the investment is
tied more to securities laws than to tax laws. Big investors
are automatically considered "sophisticated." Small investors
are protected from high-risk investments -- AND from high payoff
investments by our paternalistic government. Perhaps the
securities laws could be modified so that small investors would be
allowed to take limited small risks.

> There are 3 fundamental problems with any tax loophole.
> 1. The cost of administrating the law. These could be huge, much more
> than the cost to the USG of the tax lost. You have put the IRS in a
> position of evaluating R&D, something they are completely unprepared
> to do.

Why is this so? As far as I know, the IRS does not evaluate
the value of R&D. The IRS is only concerned whether or not
the funds were expended for the stated purpose.

> 2. Out right fraud. Just about every new tax loophole attracts all
> kinds of criminals. This also compounds the cost of 1.

There is less chance of outright fraud for this type of
deduction than almost any other. You don't have the SEC
and 50 states and others looking over your shoulder for
other types of fraud.

> 3. Huge windfalls for unintended beneficiaries. This has been a very
> common result. A few years back the big winner on a loophole meant to
> help family farms was the Sultan of Brunei.
> You run the danger that the largest companies will benefit
> the most and thereby increase there domination of the market.
>

Ah so and alas. Like I have indicated, I would much prefer to
repeal the 16th Amendment, restore level playing fields to all
sizes or companies, and stop this absurd counter-productive way
of collecting taxes. If you can arrange this type of either/or
situation, you'll have my vote in a heartbeat. A consumption tax
can involve a rebate for needy people, if necessary. Basically,
a consumption tax is not regressive, anyway, since the expenditure
of most tax money is for progressive purposes. Income taxes
and especially payroll taxes is pure Karl Marx; a consumption
tax would only be partially Karl Marx.

Best regards,
Len (Cormier) for MMI

Jim Kingdon

unread,
Jan 20, 1999, 3:00:00 AM1/20/99
to
> What is the Breaux bill offering Joe six-pack? It is
> proceeding. The objections are not coming from Joe six-pack,
> but from entreneurs like myself.

Well, fighting the Breaux bill should be a high priority (IMHO),
assuming that it will be coming back in this Congress.

I mean, I might have once supported it, or thought it wasn't all
_that_ bad, on the theory that it would get _something_ flying, or
some such logic. But the more that I look at Shuttle (especially
shuttle in the '70s and '80s), X-33, and so on, the more that I think
getting something flying this way would be a Pyrrhic victory, if a
victory at all.

For those of you who don't know what we are talking about the Breaux
bill was for loan guarantees for a new launcher (VentureStar,
presumably). You should be able to find the text by going to
http://thomas.loc.gov/ and looking under the 105th Congress for bills
introduced by Senator Breaux. Sorry I don't have the bill number
(S. XXX).

Kwr...@rockisland.com

unread,
Jan 21, 1999, 3:00:00 AM1/21/99
to
l...@tour2space.com wrote:
>In article <_98p2.32840$9S3....@nntpserver.swip.net>,
> Kwr...@rockisland.com wrote:
>> l...@tour2space.com wrote:
>>
>> >Actually, if it were a choice between a simplified tax code
>> >-- or even a consumption tax vs an income tax -- I would be
>> >heavily in favor of the simplified tax (or consumption tax)
>> >-- and getting rid of all special interest tax breaks. However,
>> >given that things are otherwise,
>> A lot of progress has been made in simplifying the tax code.
>> You are fighting that trend. You want to be part of the problem, not
>> the solution. If your position is that a lot of corrupt people benefit
>> from this kind of tax break and you want to get in on the action, you
>> are not likely to get widespread support.
>> >I think that this "special
>> >interest" could be as salable as a lot of others -- most of
>> >which probably don't benefit Joe six-pack.
>> Well, Joe is willing to give tax breaks to keep his NFL team, what are
>> you offering ?

>What is the Breaux bill offering Joe six-pack?

That is on the subject of loan guaranties, I though we would deal with
that separately.
Are you conceding that you have nothing to offer Joe ?



>> He is also likely to support a tax break for himself that offsets his
>> costs of keeping his parents in managed care. Just because ADM still
>> gets millions for the ethanol rip-off is not justification
>> for a new tax break that does not help the public.
>>
>You won't find me defending tax breaks or complicated tax
>laws.

You are, even if think:
>… I have


>mixed feelings over any tax breaks -- even the type that
>I am suggesting.

> In fact, Kelly, I probably feel even more
>strongly than you about special-interest tax breaks.

I am against them all. You are only against the ones that you
don’t think will benefit you directly.

>How about some of the other ideas: i.e. 1) restructured
>IR&D, 2) payload vouchers, 3) new categories of payloads for
>government commitment to low-cost "opportunity payloads,"
>4) encouragement of unsolicited proposals, etc.?

Some have real merit and some are non-starters.
2) payload vouchers. We have that now. What do you want to do
differently ?

>> >> > One such incentive would be to allow investors in a space
>> >> >launch company to deduct directly the R&D expenses incurred
>> >> >by the space launch company for the development of a new
>> >> >launch vehicle that promises to reduce the cost of access to
>> >> >space. Investors could also be permitted to deduct directly any
>> >> >R&D tax credits that might be available
>> >> I am unclear how this would work. If I invest in company X how do I
>> >> know how much money is spent on R and D and how much is spent on
>> >> other company activities ?
>> >> Who gets to deduct what exactly ?
>> >> The devil is in the details, do you have any specific language for a
>> >> bill ?
>>
>> >Good questions. Right now limited partnerships are excluded from
>> >R&D tax credit pass throughs. However, a limited partnership
>> >approach would result in a limited partner's knowing what goes on
>> >and what the partner can deduct, etc. If the Schedule K's don't
>> >jibe with what the IRS expects

>> Yikes ! what company is going to want to be beholden to what the IRS
>> expects ?

>That's an existing problem, not a new one.

You are put the IRS in your critical path in a way they are not now.
If the IRS disallows claims of R&D expenditures, it could ruin you.
Who would want to take that poison pill ?

>> If you wanted to rate government agencies that are incompetent and
>> senselessly malevolent the IRS comes out way ahead of NASA.

>You're right, Kelly. It would be at least a close race.

Not even, did you see J. Dunn’s State of the Union response ?
She told the story of how the IRS refused to accept that one of her
constituents was alive. They are literally dumber than maggots. The
less anyone has to deal with them the better off they will be.

>> >, the company conuducting the R&D
>> >would have to provide the proper answers. Another approach would
>> >be what I call "R&D bonds/debentures." Again, the purchaser of
>> >such bonds/debentures would know exactly what he/she could deduct.
>> >He/she could deduct the whole principle value of the bonds/debentures.
>> >If the bonds/debentures aren't legitimate, the company issuing
>> >them would have to answer to the IRS, SEC, etc.

>> And the bond holders.
>> Do they have to pay back the tax ?

>Not if it is committed and expended for R&D purposes -- any
>more that Boeing or LockMart would for launch vehicle R&D
>that offsets otherwise taxable income.

But a private investor gets a tax break, what happens to him if the
company’s expenditures on R&D are disallowed by the IRS ?

>> Who could buy a bond ?

>Anyone, subject to securities laws that might be loosened up
>a bit for legitimate high-risk R&D purposes.

>> How much would they cost ? I mean is this in effect, a tax break that
>> is only available to a person who can invest millions of dollars ?
>>
>No. I would hope that they would be available to ordinary
>people -- even Joe six-pack. The size of the investment is
>tied more to securities laws than to tax laws. Big investors
>are automatically considered "sophisticated." Small investors
>are protected from high-risk investments -- AND from high payoff
>investments by our paternalistic government. Perhaps the
>securities laws could be modified so that small investors would be
>allowed to take limited small risks.

So you answer is that philosophically you think that anyone should be
able to buy a bond, but in practice what you are proposing would only
be open to Big Investors because of SEC rules.

>> There are 3 fundamental problems with any tax loophole.
>> 1. The cost of administrating the law. These could be huge, much more
>> than the cost to the USG of the tax lost. You have put the IRS in a
>> position of evaluating R&D, something they are completely unprepared
>> to do.

>Why is this so? As far as I know, the IRS does not evaluate
>the value of R&D. The IRS is only concerned whether or not
>the funds were expended for the stated purpose.

So what is a valid R&D expediter ? Who decides that ?
Is rent on a parking space an R&D expenditure ?

>> 2. Out right fraud. Just about every new tax loophole attracts all
>> kinds of criminals. This also compounds the cost of 1.

>There is less chance of outright fraud for this type of
>deduction than almost any other. You don't have the SEC
>and 50 states and others looking over your shoulder for
>other types of fraud.

You do, and people steal millions.
There will be fraud and there will be companies whose legitimate
claims will be unjustly disallowed, you can count on that.

>> 3. Huge windfalls for unintended beneficiaries. This has been a very
>> common result. A few years back the big winner on a loophole meant to
>> help family farms was the Sultan of Brunei.
>> You run the danger that the largest companies will benefit
>> the most and thereby increase there domination of the market.
>>
>Ah so and alas. Like I have indicated, I would much prefer to
>repeal the 16th Amendment, restore level playing fields to all
>sizes or companies, and stop this absurd counter-productive way
>of collecting taxes. If you can arrange this type of either/or
>situation, you'll have my vote in a heartbeat. A consumption tax
>can involve a rebate for needy people, if necessary. Basically,
>a consumption tax is not regressive, anyway, since the expenditure
>of most tax money is for progressive purposes. Income taxes
>and especially payroll taxes is pure Karl Marx; a consumption
>tax would only be partially Karl Marx.

Leaving Karl out of this, you have not really responded to this point.

Tinkering with the federal tax code is a bad idea.
Shall we move on to your proposals that do not involve the IRS ?


l...@tour2space.com

unread,
Jan 21, 1999, 3:00:00 AM1/21/99
to
In article <xvDp2.33516$9S3....@nntpserver.swip.net>,

Kelly:

Although we may disagree somewhat as to the value
or lack of value of tinkering with a tax code
that is likely to be eternally tinkered with if
it is entirely eliminated, I think that we are
agreeing violently on the absurdity of the
of taxing income/productivity instead of taxing
consumption, i.e. the lack of savings and investment
-- or at least on the current complexity that allows
special interests to get special breaks for due
consideration.

So, as we both suggest, let's move on to other points
that we might discuss more productively.

Commend it and maybe expand it.

No, I would like to see the rules changed to allow at least
small investments by small investors -- perhaps a percentage
of income. Right now, most states won't let non-qualified
investors invest a nickel into something the lawyers may think
is technically unsound.

Amen. Show me a way to really stop it, and I'm with
you all the way.

> Shall we move on to your proposals that do not involve the IRS ?
>

Sure.

l...@tour2space.com

unread,
Jan 21, 1999, 3:00:00 AM1/21/99
to
In article <p4w67a1...@panix7.panix.com>,

Jim Kingdon <kin...@panix7.panix.com> wrote:
> > What is the Breaux bill offering Joe six-pack? It is
> > proceeding. The objections are not coming from Joe six-pack,
> > but from entreneurs like myself.
>
> Well, fighting the Breaux bill should be a high priority (IMHO),
> assuming that it will be coming back in this Congress.
>
> I mean, I might have once supported it, or thought it wasn't all
> _that_ bad, on the theory that it would get _something_ flying, or
> some such logic. But the more that I look at Shuttle (especially
> shuttle in the '70s and '80s), X-33, and so on, the more that I think
> getting something flying this way would be a Pyrrhic victory, if a
> victory at all.
>
> For those of you who don't know what we are talking about the Breaux
> bill was for loan guarantees for a new launcher (VentureStar,
> presumably). You should be able to find the text by going to
> http://thomas.loc.gov/ and looking under the 105th Congress for bills
> introduced by Senator Breaux. Sorry I don't have the bill number
> (S. XXX).
>
Jim:

As an alternative to loan guarantees -- which evidently
will require some type of bureaucratic review and evaluation
of a proposed launch vehicle -- let's consider one of the
ideas that I propose: restructuring of the current IR&D
program. As I propose it, a successful commercial program
would reimburse the government, perhaps at some venture
capital type of return on investment to make up for failed
ventures. In this respect, it has some of the payback aspects
of loan gurantees, without involving the government with
respect to which ideas qualify. Rather, the review would
be on the part of individuals who would commit -- or not
commit -- their scarce and valuable IR&D drawing rights to
a project that would have to succeed if those individual
are to have their IR&D drawing rights restored. This
particular idea (idea #2) is reproduced below:

2) Restructure the IR&D (Independent Research and
Development) program. At the present time, IR&D is available
only to established companies with existing government
contracts, since IR&D expenses are charged as a line item
against contracts for purchasing items that are not necessarily
related to the IR&D. Under the proposed restructuring, part
of the IR&D program would become an INDIVIDUAL Research
and Development program, under which qualified individuals
would receive limited IR&D drawing rights sometime during
their lifetimes. As an initial, experimental pilot project,
various proposed space launch companies with proposed vehicles

thatpromise to lower the costs of access to space would be able


to designate a limited number of engineers, technicians,
manufacturing personnel, and other individuals that could
further the viability of the proposed launch vehicle. Since
the designated individuals would be expending their limited
IR&D rights, the designated individuals would likely provide
a meaningful peer review from the bottom up. Successful
commercial programs would reimburse the IR&D program,
thus providing a means for reinstating individual IR&D
drawing rights. Non-commercial projects might be
"reimbursed" either by a transfer of funds or by award
of limited (scarce) certificates of achievement by various
government agencies that would judge the results -- not
promises -- of a particular project. If the pilot project is
successful, then the concept might be extended to other,
or all, R&D projects.

.........

Most of the entrepreneurial companies could do a lot for
perhaps $50,000,000 or $100,000,000. For example, I believe
that $100,000,000 would be adequate to get three of our
operational prototype TSTO systems orbit capable. Other
companies with other ideas may be able to demonstrate
feasibility sufficient to obtain additional private capital.
Perhaps, therefore, there could be a limit with respect to the
cumulative amount available to any one company or idea. One
successful company could reimburse the government enough to pay
for perhaps two other failed ideas. Even the failed ideas might
contribute enough technology to the general knowledge pool to equal
the value of the current IR&D program.

Best regards,
Len (Cormier) for MMI

l...@tour2space.com ( http://www.tour2spac.com )

Kwr...@rockisland.com

unread,
Jan 22, 1999, 3:00:00 AM1/22/99
to

I would like to take-up #5 next, I hope you do not think I am being
too negative, but I just want weed out the field so we can focus on
the keepers.

>5) Encourage unsolicited R&D proposals by providing
>set-aside appropriations for unsolicited proposals. The
>SBIR program has effectively killed the unsolicited proposal
>program. Allow sequential contracts under the new
>$100,000 streamlined procurement procedures -- thus
>enabling a series of small-task contracts based upon
>the results, not promises, of a series of tasks that
>advance the viability of a new, high-risk R&D project.
>This approach could be especially valuable for
>initial investigation of promising new ideas proposed
>by the newer and smaller companies.

OMB A-109- Could you identify this ?

>singles out such newer and smaller as promising sources
>of innovation. Present procurement practice -- as
>distinguished from procurement policy -- essentially
>precludes companies not currently capable of building
>a proposed system from even studying such a system.

The first problem I see is that this is direct government
funding to a select few companies. If you are making a stand on
principle, what is the difference if the USG puts in $100,000 at the
beginning or a $100 million at the end ?
Existing companies would immediately be at a disadvantage, they had to
spend their own money and new competitors are now going to get direct
subsidies.
What is worse is that the companies that are already bending metal
could find themselves at a disadvantage with potential investors, as
the new companies that would be the product of
these studies would have a kind of NASA seal of approval.

>A series of unsolicited proposals, each of which would
>be under the $100,000-limit might enable newer, smaller,
>innovative companies to bring a new concept to a viable
>stage of development for minimal engineering and
>administrative costs.

If this succeeds in could be a disaster. We don’t really need a
bunch more concepts, we need to get some of the concepts we have
flying. More entries into the field must inevitably take investment
away from those that are already on their way.

I like to state a set of facts, if you agree with them we will have a
clear idea that we want the same things, and the question is just how
to get them:
1) The commercial space launch industry is an essential part of the
United States economy and opportunities for United States companies
are growing as international markets expand.
(2) United States trading partners have been able to aggressively
lower their commercial space launch prices either through direct cash
payments for commercially targeted product development or with
indirect benefits derived from nonmarket economy status.
(3) Because United States incentives for launch vehicle development
have historically focused on civil and military rather than commercial
use, United States launch costs have remained comparatively high, and
United States launch technology has not been commercially focused.
(4) As a result, the United States share of the world commercial
market has decreased from nearly 100 percent twenty years ago to
approximately 40 percent in 1998.
(5) In order to avoid reliance on foreign launch services, the United
States must strive to have sufficient domestic launch capacity as well
as the highest quality and the lowest cost per launch.(the Cox report
is likely to call for this to be a high national priority).
(6) The key to regaining United States leadership in the world market
is not another massive government program, but rather provision of
just enough government support to enable the more cost effective
private sector to build lower-cost space launch vehicles.
(7) Private sector companies across the United States are already
attempting to develop a variety of lower-cost space launch vehicles,
but lack of sufficient private financing has proven to be a major
obstacle, an obstacle our trading partners have removed by providing
direct access to government funding.

l...@tour2space.com

unread,
Jan 23, 1999, 3:00:00 AM1/23/99
to
In article <Pe4q2.34106$9S3....@nntpserver.swip.net>,
Kwr...@rockisland.com wrote:
> l...@tour2space.com wrote:
> >In article <xvDp2.33516$9S3....@nntpserver.swip.net>,

> > Kwr...@rockisland.com wrote:
> >> Tinkering with the federal tax code is a bad idea.
>
> >Amen. Show me a way to really stop it, and I'm with
> >you all the way.
>
> >> Shall we move on to your proposals that do not involve the IRS ?
> >Sure.
> I would like to take-up #5 next, I hope you do not think I am being
> too negative, but I just want weed out the field so we can focus on
> the keepers.
>

Sounds like a reasonable plan. Actually, I appreciate
your comments. IMO, this is a proper use of a forum.

> >5) Encourage unsolicited R&D proposals by providing
> >set-aside appropriations for unsolicited proposals. The
> >SBIR program has effectively killed the unsolicited proposal
> >program. Allow sequential contracts under the new
> >$100,000 streamlined procurement procedures -- thus
> >enabling a series of small-task contracts based upon
> >the results, not promises, of a series of tasks that
> >advance the viability of a new, high-risk R&D project.
> >This approach could be especially valuable for
> >initial investigation of promising new ideas proposed
> >by the newer and smaller companies.

> OMB A-109- Could you identify this ?
>

Office of Management & Budget circular A-109 -- probably
dated 10 or 15 years ago, but still in effect. The part
about newer and smaller businesses was a direct result
of the very thorough Procurement Commission studies in the
early 1970s.

> >singles out such newer and smaller as promising sources
> >of innovation. Present procurement practice -- as
> >distinguished from procurement policy -- essentially
> >precludes companies not currently capable of building
> >a proposed system from even studying such a system.
>

> The first problem I see is that this is direct government
> funding to a select few companies. If you are making a stand on
> principle, what is the difference if the USG puts in $100,000 at the
> beginning or a $100 million at the end ?

You raise two points. One is selecting a few companies. This
is just the opposite of what is being said. OMB-A109 would
BROADEN the base of companies eligible to make concept formulation
studies -- the Procurement Commission felt that the number of
eligible companies was far too narrow. Concept studies are cheap.
Lack of competition is expensive.

The second point is what is the difference if the USG puts in


$100,000 at the beginning or a $100 million at the end ?

There is a huge difference. With small tasks, the USG is at
least in the position of judging results, not promises. At the
present time, the large aerospace companies are superb at using
USG money to prepare great proposals and great promises. Their
ability to deliver hardware at low cost is more debateable.
Total package procurement has been a disaster. Perhaps the
main justification for eliminating competition too early was
to be able to concentrate on a single approach/company to
enable "learning curve" savings. We haven't seen any learning
curve savings since Bob MacNamara introduced total package
procurement in the 1960s. Prior to World War II, the USG had
a number of fighter airlpanes to choose from -- most of which
were already operationally tested in various squadrons. Competition
in operational hardware is a far more effective way to reduce
costs than forced commonality and false approaches to obtaining
learning-curve cost savings. Eliminating competition in the
concept formulation phase is even greater folly. By eliminating
competition in the concept phase, we manage to eliminate innovation
as well as potential cost savings. Low-threshold, streamlined
awards early in the game do not cost much, but have a very high
potential payoff.

> Existing companies would immediately be at a disadvantage, they had to
> spend their own money and new competitors are now going to get direct
> subsidies.

Nothing in the wording prevents existing companies from
participating. The whole idea is to open up the concept
study area to many more companies -- thus enhancing
competition in the early phases where a small amount of
money can go a long way, even with a large number of
competing companies.

> What is worse is that the companies that are already bending metal
> could find themselves at a disadvantage with potential investors, as
> the new companies that would be the product of
> these studies would have a kind of NASA seal of approval.
>

Not so. The fact that they already have data and maybe
hardware to show should make their case stronger than some
startup's case. However, the startup would not necessarily be
excluded from exploratory studies. If the results of
the startup's exploratory work are not very good, they
would not likely get further funding.

> >A series of unsolicited proposals, each of which would
> >be under the $100,000-limit might enable newer, smaller,
> >innovative companies to bring a new concept to a viable
> >stage of development for minimal engineering and
> >administrative costs.
>

> If this succeeds in could be a disaster. We don’t really need a
> bunch more concepts, we need to get some of the concepts we have
> flying. More entries into the field must inevitably take investment
> away from those that are already on their way.
>

The logical end game for your argument would be that the USG
should not fund any launch vehicle concepts that might end
up being in competition with privately funded efforts.
NOT BAD, actually. I could buy that. But if the USG is
involved at all, it should be a wide-open game.

> I like to state a set of facts, if you agree with them we will have a
> clear idea that we want the same things, and the question is just how
> to get them:

> 1) The commercial space launch industry is an essential part of the
> United States economy and opportunities for United States companies
> are growing as international markets expand.

I doubt that the space launch industry is nearly as essential
to the U.S. economy as airplanes, automobiles, computers, and,
perhaps, even encryption technology. The USG tends to hobble
some of these exports with (sometimes inappropriate) export
controls. As to getting into space cheaper, I look at this more
in terms of the importance to the species, rather than any
particular country.

> (2) United States trading partners have been able to aggressively
> lower their commercial space launch prices either through direct cash
> payments for commercially targeted product development or with
> indirect benefits derived from nonmarket economy status.

I think that tinkering with ANY SPECIFIC commodity with respect
to trade balances is a big mistake. I would rather see import-
export trade certificates whereby an importer would have to buy
equivalent certificates from an exporter to the country in question.
This would automatically tend to keep the dollar balance of trade
equal for each country without special interest legislation for
shoes, launch vehicles, or whatever. As a side benefit, this
approach also transfers pressures to parties inside the countries
trying to protect a favorable balance of trade; e.g. Japanese
auto exporters would lean on Japanese agricultural interests.
When I tried this idea on the trade regulators, I ran into a
buzz saw -- I guess the idea threatened to break some
bureaucratic rice bowls.

> (3) Because United States incentives for launch vehicle development
> have historically focused on civil and military rather than commercial
> use, United States launch costs have remained comparatively high, and
> United States launch technology has not been commercially focused.

> (4) As a result, the United States share of the world commercial
> market has decreased from nearly 100 percent twenty years ago to
> approximately 40 percent in 1998.

I think this has more to do with USG disincentives and with
heavy-handed USG involvement in launch vechilces, than direct
subsidies and incentives by others.

> (5) In order to avoid reliance on foreign launch services, the United
> States must strive to have sufficient domestic launch capacity as well
> as the highest quality and the lowest cost per launch.(the Cox report
> is likely to call for this to be a high national priority).

U.S. industry is probably the strongest where USG involvement
is least. The goal is somewhat worthwhile, but even if the
goal is a top priority, the goal does not necessarilyt endorse
any particular means to that goal.

> (6) The key to regaining United States leadership in the world market
> is not another massive government program, but rather provision of
> just enough government support to enable the more cost effective
> private sector to build lower-cost space launch vehicles.

I gather this is your main point, and I generally agree
with it -- with the provision that if the USG is involved
at all, it should be a wide open game that does not discriminate
against any of the would be players, whether or not they
currently have hardware, money or just a good idea that
needs some private or other help. When I read this type
of statement, I'm afraid I detect a possible, hidden move for
supporting some special project such as the Venture Star.

> (7) Private sector companies across the United States are already
> attempting to develop a variety of lower-cost space launch vehicles,
> but lack of sufficient private financing has proven to be a major
> obstacle, an obstacle our trading partners have removed by providing
> direct access to government funding.
>

I agree with the first clause of the above sentence. As to
the second clause, I assume that you mean Ariane and Long
March and the ELV industry. I think that Russia is a special
case for Sea Launch, for LockMart marketing of Russian launch
vehicles, or for our own plans to build our booster airframe
in Russia, since these efforts are not subsidized by the
Russian government, but by the miserable economic conditions
the Russian people are trying to work their way out of with
a low-paid, highly educated workforce. As to what can
really be done, I feel that it is quite possible to reduce
space access costs far below that being offered by any
"subsidized" ELV. In a really open game, they really won't
be players. The only reason that they are players at the
present time is that we have had artificial constraints for the
past four decades with respect to who can play in the game.

Best regards,
Len (Cormier) for MMI

len@ tour2space.com ( http://www.tour2space.com )

wm...@my-dejanews.com

unread,
Jan 25, 1999, 3:00:00 AM1/25/99
to
In article <78cudf$73t$1...@nnrp1.dejanews.com>,

l...@tour2space.com wrote:
> In article <Pe4q2.34106$9S3....@nntpserver.swip.net>,
> Kwr...@rockisland.com wrote:
> > l...@tour2space.com wrote:
> > >In article <xvDp2.33516$9S3....@nntpserver.swip.net>,
> > > Kwr...@rockisland.com wrote:
> > >> Tinkering with the federal tax code is a bad idea.
> >
> > >Amen. Show me a way to really stop it, and I'm with
> > >you all the way.
> >

Dan Qualye made a proposal to cut taxes across the board by 30% (back to 1993
levels) in today's Wall Street Journal editorial pages.

I've even come up with a way to eliminate taxes! Although I haven't done much
with death yet! :)

After reading much about the limitations of markets and political processes
and coming to agree with Ken Arrow's assessment of the illogic of these
systems (known as ARROW'S PARADOX). I have since come up with a system of my
own that displaces all existing systems of government, industrial
organization, and markets. I call the system VECTOR MONEY.

The problem with votes and money is that they are scalar quantities. By
creating a system of vector quantities to represent human values TRANSACTION
MATRICES can be constructed similar to that found in LEONTIEFF MATRICES which
are constructed when performing INPUT OUTPUT ECONOMETRIC ANALYSIS.

The difference between votes and dollars is one of number. The number of
dollars is generally conserved in a transaction. The number of votes is not
conserved generally.

Instead of a universal currency I propose an individual currency. Today we
have over 100 different currencies around the world. There are markets that
trade in these currencies everywhere. Their value relative to one another is
a measure of each nation's ability to redeem the currency they print. If
their printing presses run ahead of their economic activity, they're money
grows weaker. If their economic activity runs ahead of their printing
presses, they're money grows weaker.

Imagine that every individual has a personal digital assistant equipped to
handle vector money. When they spend money encrypted transaction vectors are
generated on the spot. When they make money these vectors are redeemed. The
vector record when the redeemed unit is made is compared to the redeemed unit
after it circulated in the economy. In this way accuracy in translating ones
values into social action are assured.

Markets are automatically established to exchange individual vectors.
Clearing prices are established, and values are arrived at in a distributed
system of information exchange.

It is easy to show, though quite lengthy for this forum, that any system of
rules in civil law, in mutual agreements, in political discourse, and even in
criminal law, can be represented by tables of coefficients in a properly
constructed matrix. Computing the proper matrix is simple using the bases of
the vectors involved. Matrices can evolve based on accumulated information
based upon maximizing objective functions of universal value as defined by the
individuals in the marketplace at the time of the transaction.

The system operates totally fairly and totally automatically without human
intervention. Individual values are automatically transformed into social
values. Individual actions are funded automatically by the system. Failures
are automatically detected and corrected. (Merely saying you're giving medical
treatement to a poor person is not sufficient to obtain a socially sanctioned
supply of money for this purpose. The poor person enters into the equation
automatically - as an example.)

So, if folks wish to support development of moon rockets say, then a pile of
value, will automatically accumulate for this purpose. This will attract
capital and businesses to make use of this value.

Not only can multiple values be computed simultaneously and easily with
vector money, but its history can be easily traced. So, if money ends up in
the hands of drug traffickers or producers, and half the population will not
redeem money so tainted, then half the money received will be valuless and
not redeemed if detectibly used for this purpose.

I believe this system, or something like it, will operate well in the new
frontier of interplanetary space. It doesn't appeal to central authority or
control. Thus it is useful to enforce agreements and establish rights of a
dispersed population far from centers of political and military control.

To put this another way, its easy for a strong man to benefit by stealing gold
coin from a weaker one. However, if the exchange symbol is not gold, but
something that requires the participation of the person being robbed, we have
in place the elements of a system that can be self regulating without appeals
to central authority.

<a lot of good stuff deleted pertaining to immediate changes to existing sys>

Generally speaking we have been using government backed cost plus contracts
to develop space travel assets. This has the shortcoming that profits grow
only by increasing "legitimate" costs. This was a problem with all programs.
Folks like the developers of the Atlas missile were systematically ignored
by General Dynamics when they proposed ways to reduce the missile's cost as a
space launcher. Boeing engineers proposed a reusable first stage for the
Saturn V. They were ignored by Boeing management. Much more money was to be
made by building a Space Shuttle than by making use of the Saturn system
cheaper. This may make sense in the context of maximizing revenue from a
particular program, but is counterproductive in the larger context of
creating valuable assets for space travel.

For example; Estimates were that if the first two stages of the Saturn V were
recovered by parachute and a small heat sheild, following launch, payload
could remain unaffected (with more efficient F1s and J1s). We had already
converted the SIVB into Skylab by the mid 70s. It would be easy to rig it up
for lunar habitation and land it on the moon unpiloted. Then use a lander to
bring a crew down. For less than half the cost of the Shuttle program we
could have had several lunar outposts, a multi-module SIVB version of a space
station, 10,000 tonne per year to orbit capacity for 10 years, and a NERVA
style rocket for piloted interplanetary launch. As an alternative to
Shuttle, and for the same price, we could have had a space station and a
handful of lunar outposts, as well as a piloted mission to mars and venus,
and unpiloted rovers on every major body in the solar system, all before
1980. The problem is, there was no constituency for this program within any
of the NASA contractors, nor within NASA itself, since it built upon skills
already mastered. Thus on a cost plus basis it earned less than the Shuttle
program for the contractors, and it didn't make good use of NASA's labs as
the Shuttle program. If political leaders had the vision to turn over the
operation of the moon rockets to a quasi private consortium, we could have
achieved much. But political leaders, from Nixon on down, saw only the risk
of continued space stunts (flying to the moon) following Apollo 13, and very
little benefit. They saw nothing but political trouble with setting up a
market that allowed private industry profit in the billions of dollars while
our inner cities burned.

Beyond this personal rant; cost plus contracts are a good way to quickly get
results in an unknown environment when you're doing things for the first time.
But we are now past that stage. We must think of other ways to move into a
market driven system.

One approach is to establish a system of property values and a way to
administer them for the properties that could be made available using space
based assets. We've already achieved this with communication satellites and
now have several major players investing billions to create valuable space
based assets to provide global communication utilities.

Before establishing property rights in the appropriate way, we must have some
idea of what might be valuable, without making things so specific as to
restrict actual growth when it occurs.

Other utilities that can be seen around the corner; global power utility
using solar powered satellites that beam energy to users on earth; global
industrial utility that process captured asteroids and return valuable stuff
to earth; global transport utility that uses space based power to run a vast
network of aerial and sub-orbital transports; expansion of communications
functions to include telepresence, telecherics, and econometric functions.
Thus virtual travel, virtual work, and virtual banking can be supported by
space based assets throughout the world.

Each of these utilities provide benefits to the global economy. They each
require property values and rights to be defined in a variety of unique ways.
They also require global access for the services rendered. If government
could achieve these things it would be the single most important achievement
for the generation achieving it. It would be the X generation's equivalent
to defeating facism, or the 60s generation equivalent of the collapse of the
Soviet Union.

Beyond this very basic function of establishing a system of property rights
and enforcements for space based assets, government could prime the pump by
any of the following activities, once property rights were enumerated;

1. Lowered taxes or zero taxes for space based industry;
2. Money to directly create markets for important space products;
3. Support research that benefits all within space industry;

#3 above is similar to the way NACA helped develop airliner technology in the
20s through 40s. NASA could be adapted to support private spaceline companies
in a similar way.

The problem with government intervention though is that it introduces
politics and political agendas that restrict or even destroy assets the
market might find useful. Government intervention can also cause hypergrowth
early in an industry's life cycle, but then freeze it in non-economic
patterns due to political effects. Expendable missiles make sense if you
plan to fire 30,000 warheads at targets in a few hours. They don't make
sense if you plan to build a space launcher. But, expendable missiles are
easy to make into expendable space launch vehicles. Apollo achieved a lunar
landing by 1969, but has frozen NASA and government programs into a certain
way of doing business so following this achievement, more difficult decisions
are not made (like deploying nuclear rockets and reusable Saturn V lower
stages).

l...@tour2space.com

unread,
Jan 26, 1999, 3:00:00 AM1/26/99
to
In article <78iouf$as3$1...@nnrp1.dejanews.com>,

wm...@my-dejanews.com wrote:
> In article <78cudf$73t$1...@nnrp1.dejanews.com>,
> l...@tour2space.com wrote:
> > In article <Pe4q2.34106$9S3....@nntpserver.swip.net>,
> > Kwr...@rockisland.com wrote:
> > > l...@tour2space.com wrote:
> > > >In article <xvDp2.33516$9S3....@nntpserver.swip.net>,
> > > > Kwr...@rockisland.com wrote:
> > > >> Tinkering with the federal tax code is a bad idea.
> > >
> > > >Amen. Show me a way to really stop it, and I'm with
> > > >you all the way.
> > >
>
> Dan Qualye made a proposal to cut taxes across the board by 30% (back to 1993
> levels) in today's Wall Street Journal editorial pages.
>
> I've even come up with a way to eliminate taxes! Although I haven't done much
> with death yet! :)
>

snipped a lot of interesting material -- see original post.

....


>
> Instead of a universal currency I propose an individual currency. Today we
> have over 100 different currencies around the world. There are markets that
> trade in these currencies everywhere. Their value relative to one another is
> a measure of each nation's ability to redeem the currency they print. If
> their printing presses run ahead of their economic activity, they're money
> grows weaker. If their economic activity runs ahead of their printing
> presses, they're money grows weaker.
>

more snip .....

One of the ideas that I suggest may be a kissin' kin of
your idea for individual currency -- at least with respect
to government-sponsored R&D. This idea is for INDIVIDUAL
IR&D drawing rights. Qualified individuals might start
the game with a fixed, but limited amount of "Monopoly
Money" in the form of individual IR&D drawing rights to
be used over his/her lifetime. (see original post). Whether
or not individuals joined together to support a specific
project -- such as a new RLV -- would depend upon whether
the project concept could survive this type of peer review.
For commercial projects, the individuals involved could only
expect to have their IR&D drawing rights replenishied if the
commercial project is successful enough to reimburse, with
VC interest, the government for the initial cost of the
IR&D drawing rights of these individuals. Thus, government
involvement would be minimal. Non-commercial projects would
have to depend upon government review for potential
replenishment, but at least the government reviewers would
be judging results, not promises.

As another aspect to your idea for individual currency, I
believe that -- in the early days of the U.S. -- businesses
of all types used to issue "merchant coins" that would be
honored, or not honored, on the basis of the value of the
merchants operations -- to some extent as you outline
in your post.

Actually, I think the concept of money is much too important
to leave to bankers and economists -- especially since money
is only the symbol of wealth, not really wealth in itself
(except perhaps gold coins versus token coins). I believe
a two-tiered currency is often appropriate, e.g. for Russia
after 1991. In 1992, I wrote to our cabinet members and even sent
a FedEx package to Boris Nikolayevich suggesting a two-tiered
currency. One tier would have been a new hard currency that would
be strictly backed with tangible assets. Even if the new currency
were backed by U.S. Treasury bonds, the Russian Federation would
have at least earned the interest on the float. Holding dollars
in Russia gains no interest for the RF government. With a two-
tiered currencey, the ruble would have been allowed to be a soft
currency to grease the gears of the economy -- such as it was.
Instead, we have had the disastrous IMF policies that stopped what
was at least limping along and what at least paid pensioners, and
wages to the military, etc., and produced a lot more goods than
are being produced today. This, together with pseudo privatization
promoted by Harvard advisors (perhaps necessary to buy off the
Nomenklatura), turned out to be disastrous for Russia. I thought
that the two-tier currency was a good idea in 1992; now I think
it was even a better idea than I originally thought.

Best regards,
Len (Cormier) for MMI

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