Abstract
In this compelling opinion piece published in the Financial Times, Glenn Hubbard examines a critical contradiction in the Trump administration's economic strategy. While the administration has prioritized economic growth, its simultaneous push to reduce government spending through the Department of Government Efficiency threatens to undermine this very objective by targeting crucial research and development funding at agencies like NIH, NSF, DOE, and NASA.
The article builds a strong economic case for maintaining federal R&D investment, citing Nobel Prize-winning research by Robert Solow and Paul Romer that establishes the fundamental connection between technological progress and sustainable growth. The author presents convincing evidence that public R&D funding yields extraordinary returns—up to $2 in economic output for every dollar invested—far exceeding both private R&D returns and infrastructure investments.
Particularly striking is the research showing that government-funded R&D has contributed approximately one-fifth of all U.S. productivity growth since World War II. Hubbard acknowledges that fiscal discipline can enhance growth, but argues that R&D cuts are fundamentally misguided when the social returns are two to four times higher than private returns. For business leaders and policymakers seeking sustainable growth strategies, this analysis offers a clear warning: cutting federal research funding will inevitably constrain innovation, productivity, and, ultimately, economic expansion.