Structural deficits and infrastructure investment in the u.s. economy: an emerging policy and management crisis in capital expenditures

Local Government Capital Spending During and After Recessions: A Cause for Concern?

“…The inputoutput multiplier of public investment on private output is still contested, but on the high end is the Keynesian multiplier, which demonstrates the use of capital expenditures as a counter-cyclical tool. One study estimated that at the federal level, a billion dollars of investment in public infrastructure would add 10 billion dollars to the gross national product (GNP) and create more than 30,000 jobs (Huq et al, 1986). In addition, other research has shown that economic development most directly benefits the unemployed, less educated, and minority populations of the community (Bartik, 1991;Davis et al, 2003;Freeman & Rodgers, 1999).…”

“…One estimate of the cost of early delays in infrastructure maintenance is one fifth of the annual appropriations (Huq et al, 1986). Changing the way that capital is budgeted and planned for in the long-term may make it easier to understand and protect those monies.…”

“…One way that reducing capital spending may create longterm effects on local governments is the cost of delaying maintenance 1 or even terminating capital projects (Dornan, 2002;Huq, Taylor, & Whritenour, 1986). 2 According to a report by the Government Accountability Office, in the absence of substantial policy changes in the treatment of infrastructure, the fiscal condition of states and local governments will continue to decline through 2060 and to close the fiscal gap by 2058 will cost $9.9 trillion (Czerwinski, 2010).…”

“…At current spending rates, it is projected that the state's local infrastructure may be underfunded by as much as $80 billion (Office 1 Preventive maintenance considerably reduces costs over the life of the capital (Dornan, 2002). 2 Some researchers estimate that the United States has been facing a looming infrastructure crisis for three decades and has been underinvesting in infrastructure since the 1960s (Huq et al, 1986). Choate and Walter (1981) concluded that the infrastructure in this country is deteriorating faster than it is being replaced and noted the large costs associated with this ongoing trend.…”

An integrated approach to capital budgeting: the City of Prince George

“…Historically, the literature and theoretical evidence for capital budgeting has been weak with little empirical evidence (Forrester, 1993). While there has been some longitudinal and crosssectional analyses, the research has been constrained by methodological limitations and small sample sizes (Millar, 1988), as well as measurement inconsistencies (Kamensky, 1984;Pagano, 1984;Huq, Taylor and Whritenour, 1986;Millar, 1988).…”