E C O N O M I C R E P O R T O F T H E P R E S I D E N T

Strong job growth and low unemployment have been possible in thisexpansion only because people have found that work has paid off. Providingwork incentives is an essential element in strong economic growth. Withone of the most highly educated, skilled, and motivated work forces in theworld, the United States has also been able to take advantage of growthopportunities worldwide.Policies to increase access to education and training and make work payhave been a central theme of economic policy in this expansion.Pro-Investment PoliciesOutput growth in this expansion has gone predominantly to householdsand businesses rather than for government purchases. One can measure howthe growth of GDP over time has been allocated among the components ofGDP: consumption, investment, government purchases (Federal, State, andlocal), and net exports (Chart 1-6). When this is done, the current expansionstands out for the strong contribution of private investment spending. Thecontribution of government purchases of goods and services to growth hasbeen only 7 percent, about a third of what it was in the two previous longexpansions.Government purchases of goods and services reflect the direct use ofeconomic resources. But Federal spending also includes Social Securitypayments and other transfers to households and businesses. On this broaderChapter 1 | 31