That's the conceit for the tv show For All Mankind - what if the space race didn't end? But I don't buy it, IMO the space race ended for material reasons rather than political. Space is just too hard and there is not much of value "out there". But regardless, it's a futile excuse, markets and politics should be part of any serious prognostication.
I think it was a combination of the two. The Apollo program was never popular. It took up an enormous portion of the federal budget, which the Republicans argued was fiscally unwise and the Democrats argued that the money should have been used to fund domestic social programs. In 1962, the New York Times noted that the projected Apollo program budget could have instead been used to create over 100 universities of a similar size to Harvard, build millions of homes, replace hundreds of worn-out schools, build hundreds of hospitals, and fund disease research. The Apollo program's popularity peaked at 53% just after the moon landing, and by April 1970 it was back down to 40%. It wasn't until the mid-80s that the majority of Americans thought that the Apollo program was worth it. Because of all this, I think it's inevitable that the Apollo program would wind down once it had achieved its goal of national prestige.
When I talk to people who actually run factories here, they say that manufacturing in the U.S. is fine. It's just highly, highly automated. You'll have a production line that takes in plastic and chips and solder, and spits out consumer electronics at the end, and there are maybe a couple dozen employees in the whole plant whose job is to babysit the line and fix any machine that goes awry. Their description is backed up by data: manufacturing output has been flat since roughly 2000 [1], but manufacturing employment has dropped by more than 50% [2].
The public discourse about why we want to bring manufacturing back to the U.S. has been split into two main points (and you'll see it in comments here):
1) We should bring back manufacturing jobs so that we can have good, middle-class wages for the large segment of the population that's currently in low-wage service jobs and about to be displaced by AI.
2) We should bring back manufactured goods so that if we go to war with China, we can still make all the things we need to wage that war.
If it's #2, that's fair enough, and every indicator is that we can do that, it'll just take time and capital and perhaps some entrepreneurship. But it won't fix #1. Just like all other manufacturing in America today, the lines will be highly automated and largely run by themself. And that's a good thing - if we go to war, we want highly productive, distributed factories because we'll need the people to actually fight the war itself. The jobs are not coming back. If you expect someone with a high-school degree to be able to own a home today, the solution is not to put them to work in a factory ("manufacturing engineer" is a skilled job today anyway, not unlike a computer programmer), but to automate building houses and get rid of zoning/permitting constraints so that there are actually enough houses for everybody.
Is this just a case where politicians tell voters what they want to hear so they can go do what they want to do anyway? "We're going to bring back good high-paying manufacturing jobs for everyone" is a lot more palatable message than "We're going to go to war so you can die."
[1] https://fred.stlouisfed.org/series/OUTMS
[2] https://fred.stlouisfed.org/series/MANEMP
1. During Covid, medical supplies were in short supply, to the point where the US government was flying in individual airplanes from China full of N95 masks and face shields. The guy making the video knew that Alabama (where he lives) wouldn't be on the priority list for where the masks and face shields would get distributed. His community's initial response was to 3D print face shields and donate them to healthcare facilities, but they knew that they had to step up to actual manufacturing to produce the face shields in necessary volumes. He was only able to find a single aging technician in Alabama capable of producing injection molding tooling, which he then was able to use to mass produce enough face shields to supply Alabama and neighboring states. If that one guy had chosen to retire before Covid, they would have not been able to make the injection mold locally. At a time where global supply chains were massively disrupted, they would have been screwed.
2. When an American company gets their products made overseas, the factory overseas that manufactures the product owns the tooling. This means that they're able to fill your order during the day, then at night make exact clones of your product with lower quality materials and undercut you, and you have no recourse. He brings up an example of a local small business that had this happen to them. Even though they had a design patent, they needed their lawyer to continually send letters to get Amazon to take down no-name clones of their product (and then the seller would just pick a new random set of 6 characters to sell it under). If US companies have no choice but to get their products made in countries that don't care about IP, then we're not just giving up on manufacturing, we're also giving up on designing products in the US.
When he was trying to get the injection mold for his grill scrubber made, lots of companies in the US were willing to do the actual plastic manufacturing in the US, but could only get the injection mold tooling done in China. He brought up that in the past, an American company would build a machine and then ship it away to the developing world to be operated there. We've now reversed this, so the high-skill portion of manufacturing is done overseas and the only Americans involved are just pushing the buttons to operate the machine.