What is the significance of a government's debt rating on its funding of capital building projects?© BrainMass Inc. brainmass.com June 3, 2020, 9:28 pm ad1c9bdddf
A government's debt rating and funding of capital projects effect each other in a cyclical nature, and it becomes the question of which came first, the chicken or the egg (the debt-rating or the capital project that contributed initial to the government's debt rating). But the selection of which capital projects to undertake is two-tiered.
Typically, such a capital budgeting projects generate not only monetary revenue, but also social benefits that cannot
be appropriated. For example, a toll road generates revenue, and also social benefits in drivers' surplus and in reduced congestion in other roads; a power plant generates marketable ...
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