The economists who argue for more R&D spending note that the $3,387 billion of n

Question

The economists who argue for more R&D spending note that the $3,387 billion of non-R&D federal expenditures in 2009 were nearly 26 times more than the $131 billion that the federal government spent on R&D that year. They argue that because scientific knowledge is a public good with huge positive externalities, government should heavily subsidize its production. And they point out that for anyone wishing for more money in the future for programs like Social Security, Medicare, or defense, their best bet would be to spend more now on R&D so as to increase productivity, income, and tax revenues in the future. That way, we could give up a small amount of current consumption in exchange for a substantial boost in future consumption. Do you agree? Why yes or no? On what economic grounds?

Explanation / Answer

See, R&D or Research & Development is a backbone of any production related businesses, with R&D, new innovations and technologies are implemented practically and there sustainance is observed, through this proper utilization of resources and overall sustainable development is made possible. In, short we can say that government expenditure on R&D have long term benefits and short term issues, this short term issues arise because when government spend more on R&D, then definately the amount it expending on subsidies will decrease, this low subsidies will result in high pricing for a short period of time, So, yes i agree with the economist point of view that more federal expending should be done on R&D.

It is also to be noted that every year government spend a large amount on mitigating certain epidemics or diseases, with R&D, this mitigation can be converted to prevention, with initial investments in reseach programmes government can save its ependitures in future. There is a need to strong the base of an economy then simply watering the leaves.  

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