A Capital Budget for Public Investment

The federal budget needs to prioritize spending that will make our economy more productive in the future. Yet, over the last several decades, the portion of the federal budget going to current consumption has increased, while that devoted to public investment has declined. As a result, the federal government does not adequately fund either the physical infrastructure or knowledge capital upon which a more productive economy rests. We are underinvesting not only in traditional infrastructure, but also in high-speed broadband networks, in basic science research and development, and in training skilled workers, scientists, and engineers.

Just as private businesses and most states use capital budgeting, a federal capital budget would allow us to separate our nation's public investment, which expands our capacity to grow, from our government's current consumption outlays.

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Sherle R. Schwenninger directed New America's Economic Growth and American Strategy Programs. He was founding director of the World Economic Roundtable, a program that brought together thought leaders from business, finance, and public policy in regular meetings to remap the global economy after the Great Recession.