Economic snapshot | Budget Taxes and Public Investment

The decline of public investment

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A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for May 19, 1999


The decline of public investment

Over the past two decades, federal support for virtually all categories of public investment has declined significantly. The figure reveals that, since its peak in the late 1970s, federal spending on public investment — measured as a share of total economic output — has fallen by more than a third, and is projected to fall another 35% by 2007 at its current rate of decline.

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The table below shows the trends for specific areas of public investment spending.

Expenditures ($1998)

Type Previous High Current (1998) Projected (2007)
Education and training 1.0% (1976) 0.6% < 0.5%
Infrastructure 0.8% (1980) 0.5% < 0.3%
Research and development 1.0% (1966) 0.36% < 0.25%

Sources: Baker, Dean. 1998. The Public Investment Deficit. Economic Policy Institute.

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