Final answer:
Approximately 7% to 9% of the U.S. GDP is spent on new projects as part of investment in physical capital. This figure provides an idea of project spending which is difficult to estimate globally but can act as a rough proxy for developed countries. Significant portions of GDP are also allocated to social services like Social Security and healthcare.
Step-by-step explanation:
The question of how much of the world's gross domestic product (GDP) is spent on projects can be answered by examining different types of expenditures within a country's budget. Based on the provided data, we can discern that in the United States, federal spending has ranged from about 18% to 22% of GDP, with significant portions allocated to Social Security and healthcare. Moreover, investment in physical capital, which includes spending on projects, typically accounts for about 7% to 9% of GDP. Internationally, there is an expectation that industrialized nations should earmark 0.7% of their gross national income for aid in developing countries to address global poverty issues.
It is important to consider that spending on projects includes not only public investment by governments but also private investment by firms. Historically, private investment by firms in the U.S. economy has fluctuated between 14% and 18% of GDP. However, only half of this likely represents new physical capital, with the rest replacing outdated or worn-out equipment. This means that the actual percentage of GDP spent on new projects (new physical capital) is closer to 7% to 9%. This estimation does not directly translate to a global percentage as economic structures and spending priorities differ among nations.
In the context of international aid, mention is made that around 1% of the U.S. federal budget is devoted to foreign aid. State and local government spending, which could also include project spending, grew from about 10% of GDP in the early 1960s to 14-16% by the mid-1970s. When considering all these factors, the specific percentage of world's GDP spent on projects is difficult to pinpoint exactly, but the provided figures offer a glimpse into government and private investment patterns in the context of the U.S., which could serve as a rough proxy for other developed nations.