What Not To Cut
As the fiscal cliff talks heat up, it is important to keep an eye on what the two sides agree to cut. Some cuts will eliminate waste. Others could jeopardize the long term health of the economy. In the latter category is investment in education, infrastructure, and research. Sean Pool and Jennifer Erickson explain the case for government spending on research:
To be sure, deficit reduction is an important national priority, but as President Obama said in 2011, “Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact.” . . .
The value of these investments is borne out by history. According to economists Charles Jones and John Williams of Stanford University, the National Bureau of Economic Research, and the Federal Reserve Bank of San Francisco, the return on investment for publicly funded scientific research and development is somewhere between 30 percent and 100 percent, or more.
While Al Gore did not invent the Internet, government funding made it possible. The same is true for many other innovations that we now take for granted. One of the reasons we’ve had one of the most productive economies in the world is because of government spending on research. One of the ways to ensure we don’t have a productive economy is to stop it.