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The US government policy of letting commercial interests take the lead in space exploration was taken at a time when the national – and international – financial systems were coming under significant inflationary pressures (resulting from the years of stimulus packages). By 2028 the signs of high inflation were creeping into consumer markets and the need for fiscal tightness was clear. Cutting back NASA (along with a host of other vulnerable budgets) did slow the process but by 2030 a full-blown depression finally settled over the global economy. The question was, how long would it last? Of course, with hindsight we can see that the depth of the depression could have been far worse. The shocks reverberating from the simultaneous Chinese economic crisis were largely mitigated by years of policy driven economic decoupling.
As the Chinese and then the EU economies went into reverse and sank further into the economic black hole that is a depression, the rest of the world was sucked in toward the same fate, though both suffered worse than other advanced countries. But lack of exposure to the crypto collapse helped insulate others from the worst of the downturn. Wealth, anything that could be carried, sought a safer haven, but nothing escaped once the borders were closed. For a time nations were locked down in scenes reminiscent of the Covid pandemic. For America it recalled the dust bowl years. This time, a hundred years on, anyone on the road was refused relief. ‘Stay at home to be helped’ was the message. Anything to stem a tide of economic refugees. Banks went bust, pensions turned worthless, and a harsh economic reality began to set in.
Despite this, the space sector continued to thrive. Much of the investment going into space had already been set aside or put in place by private backers, investors, and companies in line with the long timescale associated with the endevour. And the US dollar, though it lost value, remained stable against other currencies. This depression focused on trade, or the lack of it, and the layoffs that followed. Admittedly, American consumers were out of pocket to the tune of $8 trillion from the crypto collapse, but much of that had been made on the way up so the real loss was less, and by its nature capitalism accepted the losses as part of the risk.
Other space industries suffered greater pain. Expenditure was cut short, projects scaled back or put on the back burner. Any lead that the American space sector enjoyed over its rivals only increased. In two short years the competitive landscape of space exploration was redrawn by the depression. Some countries’ commercial space operations that might have been expected to gain a 4E license in the future found their capabilities reduced. It would come as a shock and blow to national pride when certain applicants would be passed over when the first round of licenses were issued. The 2030’s was a difficult time for those organisations - public or private - reliant on direct government support. For America, the decision to hand over space to commercial interests was beginning to look prescient indeed.
For NASA, the nadir actually came in 2028/9 when the budget slipped back to a level not seen since the Obama presidency. The Karl Guthe Jansky ultra large array space telescope took a fair percentage of the available funding but survived attempts in Congress to kill the program. NASA responded by bringing additional partners to the table, but work slowed, and the space telescope's planned launch date was pushed back two years, finally completing the arrival of all 62 satellites in deep space in 2033.
One of the surprise effects of the economic downturn in the US was the focus placed on the space industry by the administration, seen as one of the few bright spots in the economy, a signal of optimism in those dark years. The unintended consequence of this attention was that the government started to redefine the strategic value of the sector once more. Commercialisation of space was essential for it to thrive as America had discovered, but governments around the world woke up to the fact that despite being fiscally constrained, they needed to reassert a greater degree of control if space and all its opportunities was to help reignite the world economy.