3 Sustainable Federal Government Investments

By Lewis Humphries | February 21, 2012 AAA

Despite the protracted and fiercely contested negotiations that took place over the United States federal budget during 2011, it is important to remember that public spending and government investment are both crucial to sustaining economic growth and improvement. Since 1902, government spending in the U.S. has risen steadily from 7 to 40% of the gross domestic product (GDP), and this has remained in line with significant advancements in the application of scientific and technological innovation. As we progress into 2012, it is worth considering which 21st century government investments are delivering sustainable social and economic returns.



SEE: Countries With The Highest Government Spending To GDP Ratio

Feed the Future
A return on investment (ROI) often refers to financial capital, but progressive governments also have a duty to invest in projects that deliver sustainable social change. The Feed the Future initiative was conceived by the Obama Administration as a reaction to the rise of global food prices in 2008, and over the last three years has benefited from the investment of $3.5 billion. By funding scientific innovation and research into agricultural productivity, the initiative aims to create viable food sources in regions such as Africa and Bangladesh, while developing local trade networks.

Though undoubtedly an investment which has already begun to generate significant social capital, it also boasts long-term economic benefits for all parties involved. The Feed the Future Project strives to create long-term and sustainable economic growth in all poverty affected regions, and also helps to foster a commercial trade relationship between the U.S., Africa and other affiliated nations. By encouraging economic independence in these regions, the federal government is making great strides towards reducing poverty while also strengthening the global economy.

NIH Research
In terms of delivering an immediately obvious and consistent ROI, the National Institutes of Health (NIH) is leading the way as a recipient of government funding. As recently as 2010, the medical innovation organization supported a total of 488,000 public and private sector jobs, while also generating $68 billion through economic activity and subsequent revenue. These facts alone would justify the 2010 initiatives' annual government investment of $30.9 billion, while also supporting the role of the NIH in sustaining economic growth and creating thousands of employment opportunities nationwide.

The NIH's federal budget request for the financial year of 2012 stands at just $31.9 billion, but this investment will make even greater strides towards driving scientific and economic development forward. An example of this is the organization's proposed National Center for Advancing Translational Sciences, which will provide a focal point for scientific innovation and help to accelerate research into developing cures for life threatening diseases. Given the work of the NIH so far, continued government investment is likely to generate even more handsome returns in the future. (For more on spending, check out Stimulus Spending: When It Fails And Why.)

Advanced Energy
Given the increasing emphasis on environmental awareness and the global drive to maximize sustainable energy, it is no surprise there has been a great deal of government investment into relevant research and development techniques. The Advanced Research Project Agency-Energy (ARPA-E) was founded by the Obama Administration in 2009, with a view to finding breakthrough technologies and ways to apply them. Its main brief was to focus on funding high risk projects that private sector research bodies were unwilling to commit to financially.

Despite these apparent risks, however, projects funded by the government backed ARPA-E have delivered huge financial awards. According to the Department of Energy, a total of 11 individual projects received a combined investment of $40 million between 2010 and 2011, which in turn generated more than $200 million in private capital following developmental progress and significant research breakthroughs. With President Obama proposing an investment of $350 million in his budget for 2013, the ARPA-E will be able to make even greater strides in creating innovative energy technologies and significant manufacturing growth.

The Bottom Line
While it may not be the leading economic power that it once was, the U.S. remains a significant force as an innovative and socially responsible nation. Under the Obama Administration, we have already witnessed the creation of several long-term investments that have been made with a view to delivering sustainable economic growth, while also helping the nation's leaders to fulfill their duty as the facilitators of social change. (To read about areas where government spending was poorly spent, see 7 Ways The U.S. Government Wastes Money.)

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