CBO - December 2013 - Notes and Contents on Federal Investment

Oct 15, 2026

Uploaded by Jake

December 2013 CBO notes and contents explain how federal investment is defined and financed, covering physical capital, research and development, and education and training. The introduction outlines economic rationales for investment, including public goods, long-run growth, and support for federal operations. It reports 2012 investment levels, shares of federal spending and GDP, and breakdowns between defense and nondefense activities. It also summarizes how mechanisms such as direct spending and grants enable investment.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages36

Reading Time1 h 31 min

AccessFree to download

Introduction and Summary

How Does the Federal Government Support Investment?

What Does the Federal Government Invest In?

How Does the Federal Government Account for Investment?

What Are the Benefits of Federal Investment?

Federal Investment

Federal Nondefense Investment

Federal, State, Local, and Private Nondefense Investment

Appendix: Sources and Methods

Related Work by the Congressional Budget Office

About This Document

CBO DECEMBER 2013 Notes Numbers in this document may not add up to totals because of rounding. Unless otherwise indicated, the years referred to in this document are fiscal years, and dollar values are expressed in 2012 dollars, having been adjusted to remove the effects of inflation using the gross domestic product price deflator of the Bureau of Economic Analysis. Values for federal investment do not include investment in higher education through student loan programs unless otherwise indicated. The photographs on the cover, which come from Shutterstock, were taken by Gubin Yury (bridge), Armin Staudt (microscope), and S. Tiptanatoranin (whiteboard) . CBO Pub. No. 4699 Contents Introduction and Summary 1 How Does the Federal Government Support Investment? 1 What Does the Federal Government Invest In? 2 How Does the Federal Government Account for Investment? 3 What Are the Benefits of Federal Investment? 4 Federal Investment Exhibits 7–12 Federal Nondefense Investment Exhibits 14–20 Federal, State, Local, and Private Nondefense Investment Exhibits 22–25 Appendix: Sources and Methods 26 Related Work by the Congressional Budget Office 31 About This Document 32 CBO List of Exhibits Exhibit Page Federal Investment 1. Federal Investment, 2012 7 2. Federal Nondefense and Defense Investment, 2012 8 3. Federal Investment as a Share of Total Federal Spending, 2012 9 4. Federal Nondefense and Defense Investment, 1962 to 2012 10 5. Actual and Projected Federal Nondefense and Defense Investment, 1962 to 2023 11 6. Federal Nondefense and Defense Investment Relative to the Budget, 1962 to 2012 12 Federal Nondefense Investment 7. Categories of Federal Nondefense Investment, 1962 to 2012 14 8. Grants to State and Local Governments as a Share of Federal Nondefense Investment, 2012 15 9. Education and Training: Federal Nondefense Investment by Activity, 1962 to 2012 16 10. Education and Training: Federal Nondefense Investment by Activity, 2012 17 11. Physical Capital: Federal Nondefense Investment by Budget Function, 2012 18 12. Research and Development: Federal Nondefense Investment by Budget Function, 1962 to 2012 19 13. Stages of Federal Research and Development Investment, 2012 20 Federal, State, Local, and Private Nondefense Investment 14. Educational Institutions: Sources of Revenues, 2009–2010 Academic Year 22 15. Transportation Infrastructure: Sources of Nondefense Investment, 1962 to 2010 23 16. Water Infrastructure: Sources of Nondefense Investment, 1962 to 2010 24 17. Research and Development: Sources of Investment, 1962 to 2010 25 CBO Introduction and Summary The federal government pays for a wide range of goods and services that are expected to be useful some years in the future. Those purchases, called investment, fall into three categories: physical capital, research and development (R&D), and education and training. There are several economic rationales for federal investment. It can provide public goods that the private sector and state and local governments would not provide efficiently, such as national defense and basic scientific research. It can promote long-term economic growth—as education spending does by developing a skilled workforce, as R&D spending does by prompting innovation, or as infrastructure spending does by facilitating commerce. And it can support the work of the federal government by, for instance, providing the structures and equipment necessary to perform federal activities. In 2012, the federal government spent $531 billion on investment, representing 15 percent of federal spending and 3 percent of gross domestic product (GDP) . Those shares have remained roughly stable over the past 20 years, though investment by the federal government approached 4 percent of GDP in 2010 and 2011 after the American Recovery and Reinvestment Act of 2009 (ARRA, Public Law 111-5) temporarily expanded funding for a number

FAQs

How does the document define federal investment?

Federal investment refers to government purchases of goods and services expected to be useful in future years. It is grouped into physical capital, research and development, and education and training.

What rationales for federal investment are described in the introduction?

The document describes rationales such as providing public goods that the private sector and subnational governments would not supply efficiently, promoting long-term growth, and supporting federal government operations through needed structures and equipment.

What are the key figures for federal investment in 2012?

In 2012, the federal government spent $531 billion on investment, about 15% of federal spending and 3% of GDP. The document also states that 60% of investment was nondefense and 40% defense, with further breakdowns by purpose.

Oct 15, 2026

Uploaded by Jake