THE ROLE OF PUBLIC INVESTMENT AND CONSUMER CAPITAL FORMATION.

The article focuses on the role of public investment and consumer capital formation. The assets of the government do not necessarily represent earning power. Therefore, the comparison of the value of all government assets with the debts in a businesslike balance sheet has not the same meaning which such a comparison has in a commercial balance sheet. The assets of government which could be compared to the total obligations represent the capitalized value of the power to draw revenue, especially of the power to tax. The question whether or not a government is overindebted can be judged only by examining whether or not there are still possibilities to tap new sources of revenues. Consumption expenditures in recent years have had an important, if not controlling, relationship to the marginal efficiency of capital. While this is not an ideal situation, nevertheless so long as it exists it should encourage the maintenance or increase of consumer purchasing power.