A Rocket Fueled Economy

In the early 1960’s, President John F. Kennedy set the ambitious goal of landing on the moon before the decade concluded. Nearly six decades later, a new goal of landing on Mars has surfaced. The only problem? Space travel leaves behind a substantial bill. It was only until recently that the founder of SpaceX, Elon Musk, along with help of NASA, has significantly cut the costs associated with space travel.

The importance of Space Travel

According to a CNN business article, Space is our new economic frontier. The U.S. can’t afford to lose out. It becomes clear that Space travel is an essential factor in driving our economy through trade, job openings, and technological advancements in the coming decades. An industry that was worth $158 billion in 2018, is now valued at $400 billion in 2020, as reported from the Federal Aviation Administration. As for the future of this industry, Morgan Stanley predicts a value of over $1 Trillion by 2040. As the US continues to be dominant in this fast-growing industry, future discoveries and innovations will prove to have impactful, positive effects on the entire economy.

Exploration at a cheaper cost

In order for the US to continue leading in the space industry, it is essential that associated costs are cut significantly. The Next Economic Revolution Just (re)Launched touches on some important ways that Elon Musk and NASA have successfully reduced costs of spaceflight. The most recent breakthrough being the reusability of a rocket’s boosters and fairings. Together these pieces combine for approximately $43 million or 70% of the cost to build and launch a rocket. Additionally, parts used for these rockets are being built in-house as compared to competitors who have no choice but to purchase them.  The ability to develop a completely reusable rocket is the first and most important step of creating a space empire, and we are nearly there.

Commercial Flights

Leaving Earth’s atmosphere could soon be a popular traveler’s destination idea. Companies like Virgin Galactic and Blue Origin have made it their mission to open up the space frontier to anybody that desires to go. Over 600 customers currently have deposited a down payment for this experience without a defined launch date. Ticket prices previously ran at about $250,000 according to Virgin Galactic. A hefty price to pay, but that won’t hold anyone back from pursuing their dreams. With new discoveries, these companies hope to drastically drop ticket prices in the future, expecting to drive the demand through the atmosphere.

Takeaways

Space exploration has always been something human kind wanted to advance, but we either never had the means or the money to do so. Today, we are closer than ever to making spaceflights and long-term expeditions easily accessible for just a fraction of historic costs. The space program will continue to prove its importance, shape society, enrich global economies, and advance the human race. We rely on space travel more than we know, through satellite communications, location services, etc. Space has played a very significant part in going about our day-to-day lives. Becoming a multi-planetary species is within our reach and it is important that the U.S. is the driver of this movement.

The Downfall of Consumer Spending

In the race to elect a new President, the talks of a second stimulus check came to an abrupt halt. What does this mean for businesses and the economy? A stimulus check was granted to Americans during covid-19 in an attempt to keep the economy on its feet. A Wall Street Journal article, Winter Without Stimulus Is Double-Whammy for retailers, touches on the importance of stimulus packages for businesses, consumers, and the economy in the near future.

Stimulus Packages are Necessary

The Pandemic we are all living through has affected the economy in more ways than one. Unemployment rates reached an astonishing 14.7% at the peak, leading many Americans to face the undeniable truth that they may not be able to afford basic necessities. By providing the citizens with stimulus checks, the Government has the goal of pumping money into economy, hoping people will spend that money on goods or services. A poll taken by CNBC, found that 49% of people said they decreased spending over the past 12 months and plan on continuing to save. Uncertainty leads to people wanting to save, which drastically affects industries and the economy. Stimulus checks will provide consumer incentive to spend which will help keep businesses and the economy stable. Additionally, businesses will use that money to pay off wages, which in the broader scheme of things, fights unemployment rates.

No Stimulus, No Economy

Many Americans simply do not have enough money to pay off their bills or even buy groceries. Families with children struggle even more financially. CNBC states that 14% or 46 million people wiped out their emergency savings during the pandemic. Without a much-needed stimulus package in the fourth quarter of 2020 or early 2021, consumer spending will take an even bigger hit than it has in the past couple of months. This directly puts much more stress on businesses. Covid businesses shut down, an article from fortune.com states that 100,000 stores that were temporarily shut down, are now permanently out of business. After all, if people have no money to spend, businesses cannot thrive, and the economy cannot either.

‘Tis the Season to Shop

With the holiday season around the corner, many retailers and businesses heavily rely on sales in the upcoming weeks. If consumers have to focus on day-to-day living expenses, how can they afford to shop? We will start to see even more businesses filing for bankruptcy and forced to close their doors forever. The more businesses that fail, the worse off the economy will be. Stimulus checks are desperately needed, not only to keep the economy steady, but, to help families all around America. It is essential that we see a package coming out in the near future.

The U.S. Trade Deficit is Leveling Out

This article from The Wall Street Journal, U.S. Trade Deficit Narrowed in September as Exports Rose, talks about the significant changes in the amount of international trade. Covid-19 has struck the United States as well as the rest of the planet with uncertainty. Information obtained from the U.S. Census Bureau provides us with eye-opening numbers in the month-to-month fluctuation of traded goods since the onset of Covid-19.

What does Trade Deficit tell us exactly?

In the simplest of terms, trade deficit informs us that a country is importing more than they are exporting. This means that they are spending more money on foreign products than they are selling. This isn’t always a bad thing; however, in the US, a large trade deficit can take a toll on job rates and the US dollar, which directly leads to a weakened economy. Trade is necessary and beneficial for each country, as every country can specialize in specific products. This leads to products being available through trade at a much lower cost than what another country would have to pay to produce that product. Ultimately this leads to economic efficiency.

International Trade was Highly Affected by Covid-19

With reliance on China for many goods here in the U.S., imports rose drastically as consumer demand for foreign products rose in the midst of the pandemic. With a global economic shutdown, foreign countries were not able to open up as quickly as the U.S. was able to. In turn, America wasn’t exporting efficiently, which caused the trade deficit to grow exponentially, reaching its highest point in August.

On the road to Recovery

Along with the recovery from the pandemic, The U.S. trade deficit is moderating. As more countries start to open up, exporting will become increasingly more prevalent, narrowing the deficit gap. It is essential for the U.S. to start exporting to make up for lost and spent money during this pandemic. With exports rising 2.6% and imports rising 0.5% in the month of September, the future looks promising for the U.S. to get back on track.