Posts Tagged ‘U.S. Public Investment’

USA failing to make the needed public investment

June 2, 2016


If you own a house or an automobile, you know you have to spend a certain amount on maintenance to keep it in good repair.  If you don’t, you’ll have problems and a bigger expense in the long run.

The same is true if you own business property, except that if you’re in business, you would want to expand and improve and not just maintain things as they are.

Governmental infrastructure needs to be maintained as well.  Our roads and bridges, airports and seaports, water and sewerage systems and other facilities don’t take care of themselves.

The chart above shows there’s a problem.   Net investment—investment minus depreciation—has fallen over the years.  In some years, it has been a negative figure, meaning the federal government isn’t keeping up with what is needed.

Putting people to work on public infrastructure projects is a good way to stimulate the economy, which has been largely missing during the current recovery.  But the main reason is that public investment is necessary if we are to have a good economy.


We Americans are writing off the future

November 11, 2013


The United States will not have a good future unless we Americans today invest in schools, scientific research and physical infrastructure.  The top chart shows how much less we spend today, as a fraction of our national wealth, than an earlier generation did immediately following World War Two.  The “gross” investment is total spending on the future; the “net” investment is what was spent over and above what was needed for maintenance of what we had.

The bottom chart shows the projections of the various budget plans before Congress.  Only the “Congressional Progressive Caucus” proposes an increase in investment.

I don’t have a target figure of what percentage of GDP we ought to be investing in the future, but I think that the “net” figure on the first chart ought to be greater than 1 percent.  It is perilously close to a minus figure, which means we are not spending enough to keep up with deterioration.

The United States as a nation invests a lot in improving our technology for surveillance and waging war.  We need science, education, transportation and communication, and we ought to be investing in that as well.