Thursday, March 26, 2009
Neil H. Buchanan (George Washington) presents The 'Growth Budget': Disciplined and Responsible Government Spending for Future Prosperity at Boston College today as part of its Tax Policy Workshop Series organized by James R. Repetti and Diane Ring. Here is the abstract:
This essay considers how federal government spending can improve long-term living standards. Starting with the familiar concept of "capital budgeting," which separates government expenditures into those that provide no long-term payoff (operating expenditures) from those that do generate long-term payoffs (capital expenditures), I expand the range of possible public investments to include those that do not produce physical infrastructure but that nevertheless provide long-term economic benefits. Adding these items - such as spending on basic research, health care, nutrition, etc. - to the more traditional items in the capital budget, I coin the term "growth budgeting" to describe a system by which the government can identify a larger number of the potential long-term investments that could benefit posterity. I then discuss the possible abuses of such a system and advocate the creation of an Office of Growth Budgeting, which would apply long-term cost-benefit analysis to possible public investments and advise Congress on the most promising spending programs.