Federal investments can provide long-term benefits and can spur economic growth. The federal budget records expenses for investment projects up front, not over the project’s lifetime of use. Because of that mismatch between when costs are recorded and when benefits occur, investment projects may seem expensive relative to other government expenditures, and the large amounts of up-front funding required for some types of investments can make it difficult to fund them within the constraints of the budget process.
This report examines approaches to budgeting that would distinguish expenditures for investment in physical capital, education, and research and development from other expenditures.
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