Does Government spending displace a near equal amount of private spending? This notion, popularly known as the “crowding-out” effect of Government expenditures, has recently gained wide-spread attention at two levels. First, at the policy level, public officials have expressed concern, that massive current and projected Federal deficits will have a deleterious effect on private capital expenditures for some time to come. Second, at the academic level, “crowding out” is at least one of the issues which helps to distinguish between followers of the two major macroeconomic schools of thought—Keynesians and monetarists.