I was thinking about this issue recently from an economic point of view. Many companies, when up for sale, gut their R&D departments in order to give the appearance of better margins and a better P/E ratio in order to entice buyers. Downside is that the buyer gets stuck with a company which is less competitive because the R&D pipeline has noting in it and competitors jump ahead in the innovation/value added department. Could something analogous be happening to the U.S.? Then again, there are many on FR who believe that taxes should not be spent on R&D and your observation is what they desire.
Yup. Massive gov't spending on science began during WW II. By a massive coincidence, American pre-eminence in science began during WW II. Private spending on science is the way it was done before, when America was not pre-eminent in science.
I'm one of those. See my book SCIENCE FUNDING: POLITICS AND PORKBARREL, Transaction Publishers., 1992. I believe I made the case that Federal funding has badly corrupted the scientific enterprise in the US. It has led to scientists chasing fads, it has frozen out innovative research (I've had that happen to me personally), and has resulted in a lot of second-rate and third-rate research being done (a full third of published scientific papers are never cited by other scientists, and these are the ones that passed peer review and were published; the stuff that's even worse never got published).
The current problem with taxes being spent on research is that the research will get done by Asian grad students
And when the research is complete, the ideas on what to do with the results will go back to Asia with them