Thoughts on a separate taxating and budget for research?

[johnd83]

One of the most damaging aspects of the sequester has been the decimation in research funding. It is always the first to be cut because it does not have immediate effects but the long term consequences of not adequately funding medical, energy, and all other forms of scientific research are dire. I personally think the solution to the health care cost crisis is better research to produce cheaper technology with better outcomes. Progress is being made but it could be significantly accelerated with better funding.

What do people think of the idea of having a separate budget like Social Security where it shows up as a 0.5%-2% tax on income and capital gains somewhat like a payroll tax to create a research trust fund and then have a board of scientists decide how to fund the different programs. Obviously the details will be more complex. Experts say that we should actually be spending 3% of GDP on research so this is actually a fairly small amount. I am a researcher myself so of course I am a little biased but the current way that research is being funded is destroying the federal research system and will have severe social and economic consequences. It would be better to try to make it less political and more controlled by the experts in the fields of research rather than politicians.

[FarCenter]

1. Social security isn't really separate

Some of the social security taxes go to pay social security benefits. The rest goes into a fund, which the rest of the government then borrows and spends. So it is just an accounting gimmick.

[johnd83]

2. Where else would the extra money go?

The safest place to put the excess is in US treasuries. I think it may be useful to break out the research funding so that it is harder to quietly gut while claiming to support it.

[FarCenter]

3. It could be invested in productive assets

Just as are university endowment funds, pension funds, insurance funds, etc. These all invest in diversified portfolios of US and international assets.

Investing in Treasury Bonds just means that the funds have to be repaid by raising future year taxes, instead of being repaid by the sale of assets and/or accumulated earnings and interest.

[johnd83]

4. That would be great if the markets were stable enough

I don't trust the players in the market. They expertly manipulated the market to steal pension fund investments. The entire point of the social security trust fund is that it is risk free within the confines of the government itself.

[FarCenter]

5. Social security is not risk free; it depends on the government's ability to tax and borrow.

But maybe a better analogy would be the highway transportation or air transportation funds that are supposedly set up to provide money for roads and bridges, airports, etc.

These are routinely raided for other purposes.

[johnd83]

6. This is strange opinion especially here

"the government's ability to tax and borrow"

The ability of the government to fund social security has a lot more to do with the total productive capacity of the country. Austerity reduces the total productive capacity. The idea that there is a conflict between the public and private sector for resources may be true if the government was using 50% GDP, but we are no where near close to that. Pumping more money into speculative investments of the stock market would not add to the productive capacity of the country. The current glut of capital in the financial system is not making it to the real economy. Research money however would add to the productive capacity of the country.