ABSTRACT
A capital budget for the federal government is unlikely to substitute for political will in the fiscal process. Governments need well-defined capital improvement programs, including both asset inventories and capital development planning. Neither is dependent on having a formal capital budget. The Reagan experiment has provided the United States with its first sustained episode of major peacetime deficits. Before 1981, the deficit had never reached 4% of the gross national product in peacetime; since then, it has always been above that level. Capital budgeting promises some greater attention of the condition of federal government's capital infrastructure. The federal government offers a system no accountant could love. Budgets and accounts focus on outflows of cash and devote little attention to government assets and public facilities. Capital budgeting requires two budgets, a capital budget and an operating budget. The federal government's primary revenue production is not derived from the sale of any service. Indeed, the services it provides generally produce no revenue.
