As everybody else, I heard that the Columbia space shuttle. That's very sad - seven people died.
Ever since I did my summer internship working on reliability simulations and researching NASA educational resources at astrium in 2000 and caught a glance at many NASA things, I have the deepest respect for the astronauts. These days they are mostly highly skilled scientists who underwent additional strenuous space-flight training (rather than the glorified fighter pilots they were in the early days of manned space flight). Also, NASA itself shouldn't be underestimated. Besides their obvious role for civil (and undoubtedly - less publicised - military) space flight, they also run huge educational programs to raise awareness of space flight in schools etc.
Apart from the human lives this accident cost, this will also be a bad day for science and manned space-flight which, as far as I can tell, is more focused on prestige and science, rather than military use, than any other endeavor of the æronautics industries. Given the current 'anti-science' spirit in the US government, this may be a good excuse to scrap manned space-flight completely.
Taking this thought further, you have to ask what will happen to the ISS. I always considered it a hint that many different countries could actually co-operate when it comes to building something that the resources or skill of one country alone couldn't achieve. Having space shuttles flying is certainly important for keeping the ISS running, so there are bound to be problems. Add in smaller or no budgets for future space shuttle missions and these problems will be huge. Add in the problems the ISS had so far - being in the media mainly for 'rich-tourist' visits - and the project may be doomed.
A bad day for space flight.
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