Noah Smith delivers a counterintuitive diagnosis for a fractured policy landscape: the most effective way to fix science, debt, and infrastructure isn't through partisan ideology, but by recognizing that almost all meaningful government action is, at its core, industrial policy. While the headline suggests a dry economic theory, the real value here is the stark realization that the United States is simultaneously trying to dismantle its scientific capacity while accidentally proposing brilliant reforms to fix it. This piece forces a busy reader to confront a paradox: the administration most hostile to science has drafted a plan that experts call a "new golden age," provided it can actually be funded.
The Science Policy Paradox
Smith opens by dismantling the narrative that the current executive branch is uniformly hostile to progress, though he is quick to note the broader context. He writes, "The Trump administration, generally speaking, has been the worst on science policy in the country's entire history," citing slashed budgets and a culture that has "scared away lots of the foreign researchers that American science depends on." Yet, he pivots to a surprising discovery within the Office of Science and Technology Policy (OSTP). The agency released a report titled "Science: A New Golden Age" that proposes shifting funding from bloated institutions directly to individual researchers.
The proposal is to "bet on people, not just projects," a strategy that echoes the successful model of the National Science Foundation Graduate Research Fellowship Program, which has long been a lifeline for early-career scientists. Smith notes that this approach would "free them from the growing administrative burdens that now weigh them down for nearly half their working hours." The logic here is compelling: by bypassing universities, which the administration views with suspicion, the government might actually achieve its goal of meritocratic selection while saving the scientific enterprise from stagnation.
The most important proposal is probably the idea to shift funding from organizations to individual scientists.
Smith also highlights the need to diversify how science is funded, moving beyond the slow, consensus-driven peer review that often stifles radical innovation. He points to mechanisms like "golden tickets" and "advanced market commitments" that pay for results rather than promises. This is particularly relevant when considering the NIH Director's Pioneer Award, which has historically allowed scientists to pursue high-risk, high-reward ideas that standard committees would reject. The OSTP plan even suggests creating a "metascience unit" to run controlled experiments on these funding methods, treating policy itself as a hypothesis to be tested.
However, a significant vulnerability remains. Smith admits that "these ideas are good enough that they need to be bipartisan," yet the current budget proposals call for massive cuts that would "basically throw the OSTP plan right in the trashcan." The brilliance of the proposal is entirely moot without the political will to fund it. Critics might argue that relying on the administration's ideological aversion to universities to fund science is a dangerous gamble, as it ties the survival of research to the whims of a volatile political coalition.
The Debt Spiral and the Cost of Inaction
Shifting from the laboratory to the ledger, Smith tackles the national debt with a rare urgency that bridges the political divide. He highlights the work of Martha Gimbel, formerly of the Council of Economic Advisers, who argues that the consequences of debt are not a distant threat but a current reality. "The government's deficits have saddled many American families with higher costs, largely from rising interest rates," Gimbel writes. Smith emphasizes that this isn't abstract economics; it translates to a typical family paying an extra $76,000 over the life of a mortgage due to policy decisions made since 2015.
The argument here is that the "deficits don't matter" consensus of the 2010s has collapsed, replaced by a dangerous feedback loop. Smith illustrates how higher interest rates force the government to spend more on debt service, which depresses growth and reduces tax revenues, leading to even higher rates. "Once this kind of spiral takes off, the only thing you can really do is print money, which can easily lead to horribly damaging inflation," he warns. This is a stark reminder that fiscal irresponsibility is not a partisan issue but a structural one that affects every borrower in the country.
Yes, deficits DO matter.
Smith outlines potential remedies, such as better IRS funding to close the tax gap and reforming Medicare Advantage, but he is clear that these are politically painful. He notes that we "managed to muster that political will back in the early 1990s," suggesting that the current paralysis is a choice, not an inevitability. The piece effectively strips away the jargon of fiscal hawks and progressives alike, focusing instead on the tangible cost to the average household. A counterargument worth considering is that in a low-growth environment, some level of deficit spending is necessary to stimulate the economy, but Smith's point stands that the current trajectory is unsustainable without correction.
Europe's Software Blind Spot
The commentary then turns outward, examining Europe's strategic failure to embrace the software revolution. Smith argues that Europe's "disdain for software comes back to bite it," as the region chose to regulate the industry rather than build it. He points to the General Data Protection Regulation (GDPR) as a turning point, where leaders convinced themselves they could control development through rules rather than innovation. "Europe has generally chosen to regulate software rather than build it," he writes, a decision that has left the continent with few successful software companies.
The danger, Smith argues, is that in the age of artificial intelligence, software is no longer a "consumer toy" but a critical component of national security and manufacturing. He warns that countries without access to the best models may be "at the mercy of those that do," facing vulnerabilities in cyber defense and drone warfare. The report "Europe 2031" paints a grim picture of the region becoming a "de facto economic satellite state of the U.S. and China" if it does not change course.
Modern Europe has a long and storied history of issuing rhetoric and proclamations about the need for policy change, but not making anything happen.
Smith suggests that Europe must overcome its "ambivalence toward software technology" and fight entrenched NIMBY interests to build the necessary data centers. The parallel to the United States is striking; just as American cities struggle with rail costs due to a lack of state capacity, European nations struggle with AI infrastructure due to a lack of political will. The argument is that the era of coasting on post-WW2 industrialization is over, and the new industrial policy must be digital. This framing is effective because it reframes regulation not as a moral imperative but as a strategic error that could cost Europe its sovereignty.
Bottom Line
Smith's strongest contribution is the synthesis of disparate policy failures under the umbrella of industrial policy, revealing that the U.S. and Europe are making opposite mistakes: one is trying to fund science without a budget, while the other is regulating the future out of existence. The piece's greatest vulnerability is its reliance on the hope that "bipartisan" solutions will emerge in a hyper-polarized environment, particularly regarding the science funding proposals. Readers should watch for whether the OSTP's "golden age" plan survives the next budget cycle, as that will be the true test of whether good ideas can survive bad politics.