Improvements in communication infrastructure, such as a fibre optic backbone to expand the nation’s internet bandwidth availability and speed.Investment in universities to create more educational institutions or crate centers of excellence from existing establishments.The development of transport infrastructure, such as motorways and railways.Examples Of Capital ExpenditureĮxamples of infrastructure spending that improve an economy are:
This is because they are likely to generate direct income or raise the productivity and GDP of the nation. What Is Capital Expenditure?ĭebt-to-fund infrastructure projects are called “capital expenditure” and are generally encouraged by investors. However, loan-funded government investment in infrastructure will reap economic benefits for generations to come. The bottom line is that government borrowing is a tax on unborn generations. But it’s going to take a lot to reach consensus on this one, and the only sure thing about this crisis is that it won’t be quick or easy.Source: US Department Of Treasury Why Is There National Debt? In the NCFRR report, panel members say the deficit fix will be painful and everyone will have to suffer. A recent Rasmussen Reports survey found that while half of respondents (48%) favored a ban prohibiting all members of Congress from steering taxpayer money to pet projects in their home districts, 36% opposed the idea. Pork-barrel spending, or earmarks, is widely derided, but mostly only if it’s someone else’s pork. There’s also a gradual increase in the gas tax to fund transportation and the reduction of farm subsidies by $3 billion/year by reducing direct payments, Conservation Security Program funding, and funding for the Market Access Program. The NCFRR, which has no actual power, developed “illustrative” recommendations that totaled $200 billion – $100 billion on the domestic front, and another $100 billion from defense.Īmong the proposals were things that would sound popular to most folks – things like reducing Congressional and White House budgets by 15% freezing federal salaries and bonuses cutting the federal workforce by 10% cutting the federal travel budget slowing the growth of foreign aid sellingĮxcess federal property and freezing federal salaries.īut the ideas also include some the livestock industry has traditionally opposed – new user fees that would require food-processing facilities to finance food safety and inspection services, for one. The NCFRR was charged with “identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.” The commission’s role was “to propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015.” But the draft discussion report produced last month by the bipartisan National Commission on Fiscal Responsibility and Reform (NCFRR), formed back in February by President Obama to address our nation’s fiscal challenges, hints at just how hard that will be. While most of these items are traditionally considered as sacrosanct, debt and spending are widely regarded as two of the big issues that drove folks to the polls last month to wrest control of the House of Representatives from Democrats. fortunes for generations.Īs the graphic shows, the largest budget items are: Medicare/Medicaid, Social Security, national defense, income security, interest on the debt, and federal pensions. There you’ll see the result of the spending engine that is building and calcifying the millstone of debt that could weigh down U.S. If you want to view one of the scariest things on the Internet, go to.
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