What is government capital budgeting?

Answer 1

Budgets have two types of items, current expenses and capital expenses. Current expenses are day to day expenses to keep your operations going. Your current expenses are your food, clothing, rent, taxes, etc. Your capital expenses are your car payments and house payments. The government's capital expenses are roads, buildings, machinery, and anything else that will last for a number of years. The government can budget a certain amount of money for capital expenses. The amount of money a government spends for a highway will be paid back over a number of years in gasoline taxes or tolls. A school building will last a number of years. On the other hand, salaries, office supplies, grants, rents, electricity, wars, etc., are current expenses. A truck driver will use a road built this year to bring in tax money next year. Current expenses spent this year will not bring in taxes next year except indirectly. (A cop arresting a crook will keep him off the streets, etc.)