Does Long-Term Research Stimulate The Economy? The federal stimulus put people to work building roads and bridges, but it also allocated about $18 billion for research that could lead to important discoveries. But some analysts don't see a quick payoff from the longer-term projects.
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Does Long-Term Research Stimulate The Economy?

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Does Long-Term Research Stimulate The Economy?

Does Long-Term Research Stimulate The Economy?

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The federal government's billions of dollars in stimulus money have gone to replenish state coffers, cut taxes, and build roads and bridges. The money has also been used to fund a lot of research projects. Ultimately, these projects could lead to discoveries that fuel the economy or cure cancer. In the short term, though, the research money isn't being spent very quickly, and that means it's not yet creating a lot of jobs for the 10.2 percent of Americans who are unemployed.

NPR's Tamara Keith reports.

TAMARA KEITH: Virginia Tech electrical engineering professor Robert Clauer is getting nearly $700,000 in Recovery Act funds to study well, Ill let him describe it.

Professor ROBERT CLAUER (Electrical Engineering, Virginia Tech University): Our particular focus is on the inner hemispheric electrodynamics of the sonar system.

KEITH: Also known as space weather?

Prof. CLAUER: Also known as space weather.

KEITH: Space weather affects important things like global positioning systems and power grids. Clauer's grant will cover the cost of installing an array of monitoring stations in Antarctica and then crunching the data that come back.

Prof. CLAUER: The ability to observe things down there has been very sparse.

KEITH: The results could eventually lead to better predictions about space weather events. But the three to four-year project isnt much of a jobs engine.

Prof. CLAUER: Strictly in terms of what we put in our budget for the stimulus money, yeah, it's like one guy and part of me.

KEITH: That one guy hasnt been hired yet. Clauer didnt design his project to maximize jobs creation because he applied for federal research funds more than a year ago before the stimulus bill was even written.

The Recovery Act sets aside about $18 billion for research. So far, only a fraction of those funds have been spent.

At Johns Hopkins University, Dr. Kerry Stewart is just ramping up his stimulus research.

Dr. KERRY STEWART (Professor of Medicine, Johns Hopkins School of Medicine): Most of my time is spent doing - carrying out clinical trials.

KEITH: But at this moment, Stewart is dealing with office space issues. The National Institutes of Health gave him nearly $2 million, which allowed him to hire seven new people.

Dr. STEWART: Two of them just showed up in the last day or two, and we're figuring out where to squeeze them in so they have a place to sit.

KEITH: Stewart is investigating the effective different diets and exercise on cardiovascular health. Altogether, about 150 people will be tested.

Dr. STEWART: We believe that we'll lose weight. The question we're really asking is: will the weight loss have beneficial impact on the cardiovascular system?

KEITH: Stewart has also purchased some equipment, but so far his project has only injected about $150,000 into the economy.

Dr. Francis Collins, the director of the NIH, says thats about right.

Dr. FRANCIS COLLINS (Director, National Institutes of Health): Doesnt that sort of make sense, that you wouldnt expect an investigator to spend it on day one when theyve got to do that research over two years of work?

KEITH: The National Science Foundation reports less than two percent of the research funds that is awarded have actually been spent. At the National Institutes of Health, it's up to four and a half percent. Compare that to the Federal Highway Administration which has paid out 16 percent of its funds and has been criticized for moving too slowly.

But Dr. Collins doesnt seem too concerned about speed. He says the $5 billion the NIH is distributing will create 50,000 jobs over the next two years.

Dr. COLLINS: There are not a lot of other returns on investments that are better than that. And here, on top of that, you also have the fact that that investigator at Hopkins is making discoveries that are going to advance human health. So whats not to like here?

KEITH: But Phil Levy, an economist at the American Enterprise Institute, says the whole idea of economic stimulus spending is to push money out the door fast, getting as much bang for the buck as possible.

Dr. PHIL LEVY (Resident Scholar, American Enterprise Institute): I think it's very fair to say that this was not the best use of the money.

KEITH: He says the problem is research spending by its nature doesn't happen very quickly.

Dr. LEVY: We may think that this is good public policy because we need to know these things. And I think it actually is a good idea to support basic science research, but I'm not sure it's an effective jobs program.

KEITH: Which has Levy and others asking: does research funding really count as economic stimulus and could that $18 billion have helped more people by now, if it had been spent to stimulate the economy some other way?

Tamara Keith, NPR News, Washington.

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