You didn't know we were in a contest? Maybe you need to go back and look again. It's one of the things Reagan gets in trouble for because he cut taxes but ramped up defense spending. At the time, we were productive enough to bury the Soviets.
In a system where there is no reward for your risk, why take the risk?
Investigate the "German Miracle" for more on this.http://www.econlib.org/library/Enc/Germ ... racle.html