Source:  The New York Times Morning NewsletterDavid Leonhardt | June 8, 2021

Alarmed by China’s rise, the Senate is on the verge of increasing research funding to help American companies.

How has the Senate managed to find a rare area of bipartisan agreement and put together a major bill to finance technology and manufacturing? A brief bit of history helps answer that question.

The U.S. government used to devote a much larger share of the country’s resources to investing in the future. Every year from the 1950s through the ’70s, federal spending on research and development equaled at least 1 percent of G.D.P. The share peaked above 2 percent in the 1960s.

The government made these R. & D. investments because the private sector often did not do so on its own. The investments involved basic science and early commercial development, which tend to be unprofitable for any single company. But the returns for society can be enormous.

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