This competition all took place at the University of Northern Iowa.
If we take NASA as our prime example for the public space industry, we see a long history of successful space flight. The competitors arguing for the public sector ran with this. Private space industries are quite new, and thus they haven't created a history that they could reference. For 53 years NASA has been sending animals, people and robots into space, while the private sector has only managed to achieve some preliminary test launches.
NASA has managed 135 successful space shuttle launches.
NASA is an amazing organization, but it's history is far from impecable. It's space shuttle program was meant to launch about 1,500 rockets, but over all these years, only 135 of these launches have happened. In addition to all of the money sunk into this organization that failed it's goals, there was also a loss of life due to NASA. We all remember the disastrous Space Shuttle Challenger. In this tragic incident, all seven crew members were killed. Failings like these certainly should not discourage us from space exploration, but they sure give a lot of ammo to people arguing for private sector space development.
The Space Shuttle Challenger broke apart 73 seconds after the launch of it's 10th mission.
The main argument for private sector space development is from the side of capitalism. Competition between companies and the motivation to earn money spurs innovation. This has become somewhat evident already, even though private space industry is so new. SpaceX's Falcon 9 rocket is 6 times more cost effective than the old NASA space shuttle launch system. Government organizations don't send up rockets to earn money, so they don't have the same level of motivation. For the U.S. government, NASA is more a point of pride than a means to sustain themselves.
Launch of the Falcon 9 rocket
Corporations do have their failings, just like NASA. As it is right now, corporations are entirely dependent on funding from the public sector. NASA and the United States Air Force have contracts with SpaceX and Boeing that are keeping their space programs alive. Without these public contracts, private space industry couldn't exist. Sending things into space is just too expensive for the public market to be able to sustain it. Another fear is that private companies wouldn't be safe. Incidences like the BP oil spill really don't make corporations look good. Private industry is in the business of making money, so they often cut corners to save some money. The fear is that they might do this while designing the next generation of rockets, and people would die.
It took 3 months to clean up after this result of corner cutting.
After all I've been through, I've decided that the optimal situation would be for both the private and public sectors to work together. The private sector is much more motivated to advance and would make space more accessible to citizens, but it is fragile and subject to the market. The public sector doesn't necessarily advance as fast as the private sector, but it is much more stable and can ensure that humans continue to explore space. If both sectors work on the same goal, they will cover much more ground and can ensure the survival of humanities dream to touch the stars.