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What economic policy really needs to focus on


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October 19, 2005

What economic policy really needs to focus on

Michael Mandel

Peter Harsha at the Computing Research Policy Blog quotes from Sebastian Mallaby of the Washington Post. Mallaby writes:

A lot of Washington debates are about managing bad stuff: war, terrorism, natural disasters, killer viruses, budget deficits, trade deficits, medical inflation, airline bankruptcies, imploding corporate pension plans. But policy also needs to focus on the good stuff: To figure out how we can accelerate progress. If we don't fix the budget deficit, we will be setting ourselves up for economic punishment. But if we don't position ourselves to take advantage of technology, we will be setting ourselves up to miss a huge economic prize.

What must we do to remain prize-worthy? The good news is that, in Gates's estimation, between 17 and 19 of the world's top 20 computer science faculties are American, and Microsoft hasn't yet moved many software jobs offshore. But to keep things that way we need to step up federal research funding and relax post-Sept. 11 visa rules, so that the United States remains what Gates calls "an IQ magnet." And because smart Indians, Chinese and others are more likely to return home as their countries grow freer and more prosperous, the United States must focus on growing its own talent. Last year two respected global surveys of math skills in eighth and ninth grades put the United States in 15th and 24th place, respectively. That isn't good enough.

It would take fairly little to address these problems. Last week a panel convened by the National Academies proposed a package of measures that ranged from math prizes for high schoolers to pay raises for math teachers, along with a program to boost federal research funding by 10 percent annually for seven years. The total price tag comes to $10 billion annually, but the nation spends nearly twice that amount on absurd farm subsidies. What kind of priorities are those?

Harsha goes on to say that:

The bad news is that the stars are aligning in such a way as to guarantee that there will be no increase for computer science, or the sciences generally, in the foreseeable future. The Republican Leadership is being pushed hard at the moment to find funds to "pay for" the large emergency supplements paid out for hurricane relief. Odds are those funds will come through across-the-board cuts to non-defense, non-security related discretionary spending. Look for science agencies to suffer cuts similar to last year's across-the-board 2 percent reduction (or worse).

One particular computing program is under an even bigger threat. The Senate voted to approve a $55 million cut to DARPA's cognitive computing program as part of the FY 06 Defense Appopriations bill. The out-of-the blue cut would hit DARPA's $114 million "Learning, Reasoning, and Integrated Cognitive Systems" account, effectively cutting the program in half. The House did not call for a cut in its version of the bill, so CRA is working to urge members of the conference committee to abandon the Senate cut and embrace the House number. We'll have all the details in the next post. I just thought it worthy of mention that at the same time the calls keep coming for increased support of computer science and the physical sciences, and as much progress as has been made to draw the linkage between federal investment in university research and our ability to continue to innovate, a significant percentage of our policy leadership still doesn't get it.

Well, the politicians are listening to the economists, who keep telling them that the lack of savings is the biggest problem that the country faces. Too bad R&D and education spending are counted in the national statistics as consumption rather than savings, as they should be. If the accounting was done right, R&D and education spending wouldn't even count as part of the budget deficit.

04:28 PM

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Neither left nor right "grokked" Newt Gingrich's concern for "dynamic scoring" for national accounting. The notion that stocks of value should be the focus of policy in periods of great dynamism is foolish. We should examine vectors of skill enhancement and networks flexibility [trade, travel, power and communication]. Americans should not have a "first derivative obsession" -- we should focus on enhancing disruptive change and socioeconomic viability.

Posted by: Sam Leven at October 22, 2005 05:19 PM


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