A new study from American University warns that cuts to federal funding for scientific research could lead to long-term economic damage equivalent to a major recession. The Trump administration's proposed funding reductions to academic institutions could undermine American competitiveness in critical areas like vaccine development and AI. Economists assert that the private sector cannot fully compensate for the loss of government funding due to the high risks involved in basic research. Even a 25 percent reduction in funding could result in a 3.8 percent decline in GDP over time, with lasting negative impacts on productivity and innovation.
"The private sector can’t fully replace government dollars for scientific research, as basic research is too risky and takes too long to pay off, undermining innovation."
"Even a 25 percent reduction in public support for research and development would correlate to a 3.8 percent decrease in U.S. GDP in the long term, akin to the Great Recession."
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