George Rebane

That’s what President Obama has told us today.  As usual, government information is mushy and gives plenty of wiggle room for later waffles.  Given the current GDP at the $14 trillion level, this “investment” comes to about $420 billion annually – at least, we think it’s a long term commitment and not a one shot.  We also don’t know whether this is an additional 3%, or is he planning on increasing the total federal R&D expenditure to the 3% level.  As usual, the announcement is political blather designed to soothe and not inform.

The National Science Foundation tells us that the country’s R&D investments have been going up and down.  Overall, in 2007 the nation’s total R&D expenditures were $368.1B with the feds spending $24.7B or about 6.7% of that.  From this we can conclude that the feds intend to put at least $400B of new money (literally!) into government R&D programs annually.  And since our President and Congress will attempt to cut back the present $3.6 trillion budget by less than a nat’s butt (see graphic here), this promised spending spurt will quietly bring next year’s budget up to $4 trillion.  (BTW, if you’re losing track of all this, you’re doing exactly what government wants – the desired response is for you to roll your eyes, forget about it, and go about your day’s business.)

So what our President didn’t tell us is that our deficit will go up by $400B annually along with the taxes to service the debt, and/or the inflation to debit your assets to pay for all this new R&D.  Most regular RR readers know that I’m all for things of science and technology.   But here comes the rub.  Government has done and continues to do a horrible job at picking and doing R&D.  Almost everyone with the smarts to do such work will be quickly picked up by industry, or will get into an entrepreneurial set-up where their reward will match their achievements.

History buffs will recall that the steam engine, railroads, telegraph, telephone, light bulb, automobile, airplane, electric motor/generator, vacuum tube, radio, TV, transistor, laser, microchip, communication satellite, personal computer, etc, etc were all developed by private individuals and industry while the government was contemplating shutting down the Patent Office because “everything had already been invented”.  And, of course, they’ve given us Team Gore and ‘Hockeystick Hansen’.

We can credit the government for doing original work in space exploration, nuclear power, and the internet, but only after non-government scientists and engineers pointed the way.  Here it is important to distinguish between government funding of development and government picking things which to research.  At best, one can barely credit them with properly funding large infrastructure and technology projects.  For example, government hindered aviation developments at several critical points during the 20th century.

The best and obvious solution is to reduce appropriate taxes so that individuals and industry can benefit from, and therefore do what the country and its people need.  For socialists enamored of central control and managing our lives, this will probably be the last place to look for a brighter future.