‘Without radical surgery, the decay in tunnels, railways and waterways will cost the US economy nearly $4tn in lost gross domestic product by 2025 as costs rise and productivity is impeded, according to estimates from the ASCE, dragging on a recovery in output that is the shallowest since the end of the second world war.’
In the project of democracy, much emphasis is rightly placed on the creation and sustenance of stable institutions in emerging nations, governed by the Rule of Law. But as the Financial Times’ piece ‘US: Neglected Nation’ shows, this is not a race that developed nations can afford to stop running.
As Sam Fleming writes, ‘bridge collapses, train derailments, fires and shutdowns on the Washington DC metro, drought in the west and an appalling lead contamination scandal in Michigan have highlighted the legacy of decades of underfunding, mismanagement and neglect.’ The funding shortfall for the necessary reinvestment is predicted to be $1.4tn.
This is part of a wider story of neglect in the US, set against a backdrop of rising anger and disenfranchisement amongst the voting public. The risks it poses to future productivity in a still-sputtering economy is vast – made even more disturbing in the current political context. But it will fuel fresh concerns for every developed economy, in which the supply and demand tug-of-war over ageing and over-burdened infrastructure is the delicate – and increasingly difficult – juggling act performed by all major global cities.
In London – where the world’s oldest underground system carries more than 1.34 billion passengers annually and one day’s disruption is estimated to cost £300 million in lost output – as in every major financial centre, infrastructure is a literal artery, carrying economic outlooks as well as people.
Like democracy itself, this juggling act needs constant attention and recalibration; governments ignore both at their peril.
- Read the report in full – Failure To Act: Closing the investment gap for America’s Economic Future