Shifting The Investment Strategy

Research and development spending has risen under Obama, but the basic trend has been downward for two decades. In percentage terms, the federal share of research spending — which funds basic science — is half of what it was in the 1950s.

In other words, the big shift in the United States over the past two decades is not a rise in regulations and taxation but a decline in investment — in physical and human capital. And investment is the crucial locomotive of long-term growth.