I nfrastructure investment has received renewed interest as of late, with both President Trump and some Members of Congress discussing the benefits of such spending. The condition and performance of infrastructure is thought to affect the economic well-being of countries in a number of ways. This report provides an overview of the trends surrounding infrastructure investment in the United States and examines the potential impact of additional infrastructure investments on economic output and employment. Although infrastructure spending has garnered increased attention recently, there is no generally agreed-upon definition of infrastructure. In general, the term refers to longer-lived, capital-intensive systems and facilities. Some restrict the definition to include systems and facilities that have traditionally been provided by the public sector, such as highways and water treatment facilities. However, others include predominantly privately owned systems and facilities, such as those involved in electricity production and distribution. The definition of infrastructure can be extended even further to include research and development expenditures, as they add to the stock of technology and information available for use by private individuals. Infrastructure is beneficial for both businesses and households and for the economy broadly. For businesses, infrastructure can help to lower fixed costs of production, especially transportation costs, which are often a central determinant of where businesses are located. For households, a wide variety of final goods and services are provided through infrastructure services, such as water, energy, and telecommunications. Infrastructure benefits the economy overall, as it allows more goods and services to be produced with the same level of inputs, fostering long-term economic growth. Federal, state, and local governments share the cost of infrastructure investments, with the majority of direct spending coming from state and local governments. The federal government contributes to infrastructure investments in the form of direct spending, grants to state and local governments, loan guarantees, and preferential tax treatment. Due to the ambiguous definition of infrastructure, tracking government spending on infrastructure investments can often be difficult. One of the more comprehensive sources of data on government investment in infrastructure is the Bureau of Economic Analysis (BEA), which tracks government spending and investment in various areas. Government spending is divided into consumption expenditures and investments. Consumption expenditures consist of spending by the government to produce and provide goods and services to the public, such as paying Census workers to survey households. By contrast, investment spending consists of government spending on fixed assets, or capital, used to benefit the public for more than one year, such as roads, bridges, computers, and government buildings. Investment is then further divided into three categories: (1) structures, which include many of the classic examples of infrastructure (water systems, highways, bridges, etc. ); (2) equipment (computers, military hardware, etc. ); and (3) intellectual property (software, research and development, etc.). This report largely focuses on structures, as this most closely aligns with the types of infrastructure cited by policymakers. Investment is generally recorded in two alternative ways, which can present different perspectives on overall investment. First, BEA reports the annual flow of funds spent by the government on investment projects. However, because the results of these investments tend to produce value for many years at a time, BEA also tracks the total value of all investments that are still productive, which is often referred to as the "total stock of investments." BEA tracks the total value of all government investments by estimating the stock of productive capital and increasing the capital stock when new funds are invested and decreasing the capital stock over time as projects deteriorate, or depreciate. The overall capital stock will either increase or decrease over time depending on the size of the flow of investment funds relative to the depreciation of the capital stock. If the flow of funds each year is larger than the loss of value due to depreciation, then the stock of capital will grow over time; if the flow of new funds is less than the loss of value due to depreciation, then the stock of capital will decrease over time. The following sections will examine the annual flow of U.S. government spending into public investments, describe the overall stock of public capital over time, and then compare infrastructure investment in the United States to that in other industrialized economies. Nondefense gross government investment (federal, state, and local) in the United States has largely been in decline since the 1960s, falling from above 4% of GDP to about 2.5% in 2016, as shown in Figure 1 . Overall, nondefense gross investment, as a percentage of GDP, was even higher for a number of years in the 1930s, before decreasing significantly during and shortly after the end of World War II, as gross government investment shifted to defense-related spending and GDP grew quickly. Nondefense gross investment in the 1960s then rose to similar levels seen before World War II, and then began slowly declining over time. It is common to limit analysis of infrastructure investments to nondefense investments; national defense investments generally do not fit the definition of infrastructure because they are not available to the public to assist in the production of goods and services. In 2016, about 54% of federal investment was directed to national defense purposes, whereas about 46% was directed to nondefense purposes. A similar pattern emerges for general government (federal, state, and local) nondefense investment in structures over this period. Government investment in structures peaked in the 1930s at about 4.2% of GDP, before dipping dramatically during the World War II period, as shown in Figure 1 . General government investment in structures then rebounded to about 2.9% of GDP by the 1960s, and has since generally been in decline, falling to about 1.5% of GDP in 2016. Direct federal investment, which refers to spending that occurs at the federal level rather than transfers to state and local governments, peaked in the 1930s as a percentage of GDP, and again in the 1960s before beginning to gradually decline over the next several decades, falling from about 1.4% of GDP in 1966 to about 0.7% of GDP in 2016, as shown in Figure 2 . Direct federal investment in structures has been relatively flat recently, hovering around 0.1% of GDP since 2000. Direct federal investment in structures also peaked in the 1930s, reaching above 1.0% of GDP briefly, then again to a lesser extent in the late 1940s and 1960s, at around 0.4% of GDP. Whereas direct investment by the federal government has largely been in decline over the previous several decades, transfers from the federal government to state and local government for capital investments have exceeded direct federal spending since the mid-1950s. As shown in Figure 2 , transfers to state and local governments for capital investments began in the 1930s and increased through the 1960s to about 0.6% of GDP. These transfers then began to decline through the 1970s, 1980s, and 1990s, before rising rapidly in the 2000s, with much of the increase in 2009 attributable to the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ). Transfers, as a percentage of GDP, have now declined to levels similar to in the 1980s and 1990s, around 0.4% of GDP. According to data from the Congressional Budget Office (CBO), as of 2012, the federal government spent about $126 billion on nondefense investments through direct spending and transfers to state and local governments. The largest share of this money, by budget function, was invested in transportation, accounting for about $63 billion, as shown in Figure 3 . The next largest source of investment was energy, which accounted for about $14 billion in 2012. Depending on the budget function, the mix of investments through direct federal spending and grants to state and local governments varies considerably. Within transportation about 90% of federal investments are made through grants to state and local governments, whereas within energy almost 70% of federal investments are made through direct federal spending. State and local investment has followed a similar pattern over time as investment at the federal level. State and local investment in structures peaked in 1939 at 3.3% of GDP, before shrinking dramatically during and shortly after World War II, then increasing back to about 2.7% of GDP in the late 1960s, as shown in Figure 4 . Following the 1960s, investment in structures declined through the 1970s to about 1.5% of GDP, and then increased between 1994 and 2009 to a level of about 2.0% of GDP. Since the 2009 peak, state and local investment in structures has again declined back to about 1.4% of GDP. Although this level of state and local investment is relatively low by historical standards, the federal government transferred about 0.4% of GDP to state and local governments in 2016 in the form of grants for capital investments (see Figure 2 ). State and local governments directly invest significantly more in general, and into structures, than the federal government (as seen by comparing Figure 2 and Figure 4 ); however, some of the direct investments made by state and local governments are the result of transfers from the federal government. As shown in Figure 4 , in 2016, state and local governments directly invested funds equivalent to about 1.8% of GDP, but the federal government also transferred funds equivalent to 0.4% of GDP to state and local governments for capital investments in that year. If all of the funds transferred from the federal government were invested into structures, it would still mean state and local governments spent about 1.1% of GDP on structure investments, whereas the federal government contributed about 0.5% of GDP to investment in structures, including direct investments and transfers to state and local governments. Overall, the stock of public capital at the federal, state, and local level—that is, the total value of all productive investments—as a percentage of GDP trended upward during the post-World War II period. However, the stocks of structures installed by different levels of government have diverged over recent decades.