In Launching the Innovation Renaissance and my Atlantic article The Innovation Nation vs. the Warfare-Welfare State I showed that the Warfare-Welfare state has crowded out federal investment in research in development.
In a short report titled Collision Course: Why Democrats Must Back Entitlement Reform, Jessica Perez, Gabe Horwitz, and David Kendall cut the data in a slightly different way but come to the same conclusion:
Entitlements are squeezing out public investments. In 1962, spending on investments was two and a half times that of entitlements. But today, as a result of this Great Inversion, entitlement spending is three times that of investments. And this trend will only accelerate in time as the Baby Boomers retire and their benefits grow faster than inflation and wages.
…The fact that entitlement spending is crushing investments is bad news for U.S. growth.
Hat tip: Arnold Kling.