Long-term prosperity at risk, report says

June 23, 2011

Underinvestment in surface transportation is threatening long-term economic productivity, according to a report in MarketWatch, a Dow Jones online news service.

U.S. infrastructure investments amount to 2.4% of the nation’s Gross Domestic Product, compared with 5 percent in Europe and 9 percent in China, according to the World Economic Forum.

“Substantial underinvestment won’t affect the economy in the short run, but productivity will be affected in the long run,” said Gus Faucher, an economist with Moody’s Analytics. “People will be stuck in traffic more often, stuck at airports longer, and that lost time adds up over 10, 20 years.”

It also will mean higher costs for rail, trucking and shipping, which will make American-made goods more expensive overseas and less competitive, he added.

Some experts suggest that public-private partnerships would help address the dilemma, but the article also points out that that some “P-3” ventures have fallen short, and do little to aid “marginal” communities where usage would not provide an adequate return on investment.

To read the entire article, click here.

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