The Budget of the United States Government, as released today, does not contain a detailed or complete analysis of what we invest in intangibles assets. But it does contain a rudimentary analysis as part of the federal investment chapter (Chapter 6) of the Analytical Perspectives volume. The analysis includes investments in physical capital, R&D and education and training. Education and training expenditures include aid for higher education through student financial assistance, loan subsidies, the veterans GI bill, and health training programs, education programs for the disadvantaged and individuals with disabilities, training programs in the Department of Labor, and Head Start.
Taking out physical capital gives us a very rough estimate of the intangibles investment. As the chart below shows, our investments in intangibles peaking in 2006 in real terms. Real dollar investments in R&D and education and training grew slightly between 1968 and 2001 and then jumped dramatically. Estimated levels for 2007 and proposed levels for 2008 drop, mostly due to a sharp decline in investments in education and training, again in constant dollars. According to the budget documents, "the decline in spending from 2006 to 2007 reflects a significant decrease in estimates of Federal subsidies due to reduced student loan consolidation activity." Much of the increase in R&D was due to a steady rise in defense spending, although non-defense R&D also jumped significantly after 2001 to a new stable level.
By the way, some good news from BEA - News Release: FY 2008 Budget for BEA Supports Initiative for Measuring the Impact of R&D on the Economy:
"The President’s request of $81.4 million for BEA for fiscal year 2008 includes $2.1 million for an initiative being closely followed in economic and business circles to incorporate R&D as investment into the National Income and Product Accounts (NIPAs), or the gross domestic product (GDP)."