Reports from the Economic Front

a blog by Marty Hart-Landsberg

Goodbye Public Investment

As the following chart from the Financial Times shows, public sector gross capital investment–which includes government spending on infrastructure, scientific research, education, and other long-term priorities–is now at its lowest level since 1950 as a percent of GDP.

Perhaps even more worrying, net government investment, which takes depreciation into account, is heading towards zero.

Uspublicinvestment

Removing spending on defense from the total leaves an even more depressing picture. The Financial Times evaluated all the major budget proposals currently being considered by Congress, and finds, as illustrated in the next chart, that all of them involve significant reductions in non-defense public investment over the next decade.

nondefense_public_investment

Slashing public investment is not the way to a healthy economy. 

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