Borrowing against the future

Jan 11 2012 Published by under [Education&Careers]

In this day and age, as congress tries to push the debt ceiling higher on a seemingly annual basis and the US continues to lose ground in trading deficits, borrowing against the future is a popular tactic. In congress there is little to no incentive not to pass a massive debt load down to our nation's children since current congress people won't be around by the time those birds come home to roost. Perhaps it's fitting that I was reading stories about this phenomenon just before I sat down to do some budget planning for our current grant.

I was surprised to find out that NSF had funded the entire budget of our grant from Day 1. My impression was that the money comes in over a couple of installments, but either this is no longer true or I was just mistaken. In any case, all of the money is in my account, just staring back at me.


This is the money you could be spending on summer travel

This summer money is going to be tight for us. I'm going to have to make some calls on travel that are based on finances more than science and I won't be able to support my people to the extent that I would like. Barring a couple of small pots of money out there falling into our lap, that is the reality.

But with the full grant funded, technically, I have the ability to fix the situation by dipping into the future. It's easy to say that we'll have other money in hand by the final year of this grant and we'll be able to play the shell game to fix whatever I do now*.

But, Here Be Dragons, I believe. I have no idea what lays ahead and I think would seriously regret running into a shortfall on this project as we are trying to wrap it up in year three. And by shorting our efforts on this proposal, could I be endangering our chances of getting funded again? Probably.

I would be curious to hear how others have handled this situation, but my inclination is tighten the belt now and keep hammering out the proposals to get these other projects funded entirely under their own power.

*Of course, there is the ethical issues of using funds for project X to prop up personnel expenses related to project Y

9 responses so far

  • anon says:

    My instinct has always been to budget carefully. I was very thrifty on the tiny startup package I had and got it to last for a couple of extra years (3 years was the original intent). Likewise, with NSF funding, I've been holding back on traveling and new hires to make sure it lasts for 3 years plus. Progress is slow with this sort of budget, but if I run out completely, I lose my job. If you run out, though, can your department bail you out by supporting students or something? What's the safety net?

  • In congress there is little to no incentive not to pass a massive debt load down to our nation's children since current congress people won't be around by the time those birds come home to roost.

    That you state this uncritically indicates that you do understand neither macroeconomics nor the nature of sovereign debt. (Not that I blame you: the mainstream media flogs this completely false narrative incessantly.)

    I have *always* outspent my revenues on an annual basis, with the goal of increasing the rate of scientific growth in my lab, and thus the rate at which I can obtain additional funding in the future.

  • Odyssey says:

    NSF gives out money two ways. You appear to have a "standard" grant in which they give you everything up front. They also give out "continuing" grants where you get each year's money at the beginning of the grant year. I've never been able to work out how they decide who gets which. I've had both types.

  • TheGrinch says:

    "Perhaps it's fitting that I was reading stories about this phenomenon just before I sat down to do some budget planning for our current grant."

    Why do you think planning for your grant budget is equivalent to national budget? True, it may have spurred you think about your grant budgets, but sovereign deficits, debts and budgets are quite unlike household budgets!

  • proflikesubstance says:

    Yes, good call folks. This post is totally about the national debt. Way to see right to the heart of the matter. In fact I always apply sovereign debt policies to my lab finances and household budget.

    I have *always* outspent my revenues on an annual basis, with the goal of increasing the rate of scientific growth in my lab, and thus the rate at which I can obtain additional funding in the future.

    This particular project is not something that I can go to NIH with. Because of the (unofficial) limits on the number of NSF grants one PI can hold, it is unlikely I will have simultaneous funding for aspects of this project, but rather will need to follow it with a related proposal. For that reason, borrowing against it with the hope that I can use money from other projects down the road is more risky.

    But this is where it gets tricky for us new folks - where is the line for how one spends federal money between projects? Perhaps this should be a post in it's own right.

  • drugmonkey says:

    PP's approach to growth is fraught with risks for most normal folks.

    Perhaps he will get away with it forever, in which case bully for him. In the vast majority of cases this will end up very painfully.

  • drugmonkey says:

    Regarding "between projects", I suppose you have to think about whether it fits the mission of the agency or directorate/IC. I would not worry too much about, say, pursuing a topic that differed in some but not all particulars from the proposed grant. In NIDA land for example, doing work of a similar nature that involved a different abused drug. Or pursuing different outcome measures for the same drug. Investigation under some cancer model might be too far, even though it is of interest to the broader agency.

    Basically, does it pass the smell test?

    Interestingly I've gotten critical remarks from a program officer even when doing pretty much exactly what we proposed *plus* some other stuff that I thought was clearly related to the core goals (and subsequent progress verified this). That only happened once and that whole branch of the IC is a little odd in their thinking at present.

  • [...] yesterday's post, CPP made the following comment with regard to using federal grant money: I have *always* outspent my revenues on an annual basis, [...]

  • Comrade PhysioProf says:

    I don't intend to maintain this kind of growth forever. I have plans in place to achieve a "soft landing" to steady state.

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