Serious economists have always understood the critical contribution
government investment makes to healthy economic growth. Adam Smith — who
over 200 years ago made the fundamental case for private markets — held that
spending for public works and education was as important a function of
government as national defense and the provision of justice. The history of market
economies since then proves the point. The United States, for example, could not
have successfully developed a powerful private economy without large and
sustained government outlays on transportation, education, and the generation of
new technologies. Yet, while governments in competitor nations have been
investing more in the future, the U.S. has been investing less, setting the stage for
further declines in living standards and competitiveness.