Question

explain how the various categories of federal government spending (such as spending on entitlements, or infrastructure or basic research) qualify as either consumption or investment spending. explain how the various categories of federal government spending (such as spending on entitlements, or infrastructure or basic research) qualify as either consumption or investment spending.

Answer 1

Consumption is defined much more loosely as consumption, as the aggregate of all economic activity which does not involve the design, production and marketing of goods and services. Such as choosing, implementing, using, disposing of and recycling products and services. Although investment is defined as an asset or object that is purchased with the intention of earning or appreciating income in the future. In an economic context, an investment is the purchasing of products which are not used today but are intended to generate wealth in the future

Well, programs like Defense, Medicare, and Medicaid will be called consumption in the technical sense. They are not actually used for any profit or gain, and are instead used to help people. To help people, and not mooch off of. As far as infrastructure is concerned, this could be seen as an expenditure.

While investment in national defense benefits society and the economy in the form of stronger national security, at least to the degree it is made prudently, recent public discussion of government spending focuses on non-defense activities that have a clearer connection to growth in production, income, and wages in the private sector. In the past decade, net non-defense spending on public assets has been trending down.