ICYMI: New Report Shows DOGE Cuts to R&D Funding Could Further Hamper Economic Growth

ICYMI: New Report Shows DOGE Cuts to R&D Funding Could Further Hamper Economic Growth

American University’s Institute for Macroeconomic and Policy Analysis Found Cuts To Public Research & Development Can Cause Great-Recession Level Harm to the U.S. Economy 

Read about the report in The New York Times 

Today, the Institute for Macroeconomic and Policy Analysis at American University released a new report, “Preliminary Estimates of the Macroeconomic Costs of Cutting Federal Funding for Scientific Research,” which finds that DOGE’s proposed funding cuts to scientific research would significantly harm economic growth and make the average American poorer in the long run.

In their report, economists Ignacio González, Juan Montecino, and Vasudeva Ramaswamy found that a 25 percent cut to R&D spending could plunge GDP to levels comparable to the Great Recession, and a 50 percent cut to R&D would cost the average American $10,000.

As González, co-director of IMPA, told The New York Times. “It [GDP] is going to be a decline forever… The U.S. economy is going to be smaller.”

You can read the full report here. The report’s key findings are below:

• “The brief finds that budget cuts to public R&D would significantly hurt the economy in the long run, with large negative effects on GDP, investment, and government revenue.”
• “A 25 percent cut to public R&D spending would reduce GDP by an amount comparable to the decline in GDP during the Great Recession.”
• “Cutting annual public R&D spending in half would make the average American approximately $10,000 poorer (in today’s dollars) than the value implied by the historical trend in GDP.”
• “Cutting public R&D would also shrink federal government revenue. A 25 percent cut in R&D would decrease revenue by approximately 4.3 percent annually, while a 50 percent cut would decrease it by 8.6 percent annually.”

Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about the harm DOGE’s cuts will cause the economy.