The Federal Budget and U.S. Competitiveness in World Markets: An Overview

Lloyd D. Teigen and Mathew Shane

No 278791, Staff Reports from United States Department of Agriculture, Economic Research Service

Abstract: Federal budget priorities establish the economic environment that determines the competitive position of American industry. The shift from purchases to transfers and the declining share of corporate taxes has characterized the evolution of the Federal budget since the 1960's. Federal transfers from savers and investors to consumers reduces capital formation, slows economic growth, and detracts from U.S. competitiveness in global markets. The cash-flow accounting in the Federal budget, which does not distinguish capital investment from operating costs from transfer payments, tends to bias expenditures away from public investment. Growing entitlements and mounting interest payments obligate future taxpayers and constrain needed programs, further limiting public investment. Annual deficits equaling 3-5 percent of GDP have pushed the Federal debt to 70 percent of GDP.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 21
Date: 1995-09
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerssr:278791

DOI: 10.22004/ag.econ.278791

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