Total Federal Spending on Research and Development
Has Been Falling as a Share of GDP
Back in the 1960s and 1970s, federal spending on research
and development averaged one and a half percent of GDP.
By the mid-1980s the U.S. government had already scaled back
its relative commitment: research and development spending then
was only about 1.15% of GDP.
The macroeconomic policy mistakes of the early 1980s left
the United States with huge federal budget deficits. As a result
federal spending on research and development has come under further
pressure.
Today federal spending on research and development is only
0.8% of GDP.
Only health and medicine have avoided stringent cutbacks.
The extremely tight "discretionary spending caps"
that will govern the congressional budget debate over the next
five years will place enormous further downward pressure on federal
research and development spending.
Given the extraordinarily high returns earned by federal
investments in research and development during the Cold War generation,
is this really a sector of federal spending where we want to
economize?
Source: Robert Atkinson and Ranolph
Court (1999), "The New Economy Index" (Washington:
PPI); http://www.neweconomyindex.org/