Business

Decaying infrastructure taking a toll on America

America's infrastructure is in a state of crisis. Roads and train lines are old, dangerous and cost the country billions of dollars in economic growth. Trump wants to repair damages but he is at the mercy of investors.

DW SHIFT | New York City mit Subway (DW)

The summer of hell began for New Yorkers last Monday. Beginning at four o'clock in the afternoon people hurried home from work, clogging midtown Manhattan's Pennsylvania Station. Over 600,000 people trek to Manhattan daily from faraway places like New Jersey and Long Island, entering the city via Penn Station. More people transit through Penn Station than all three of New York's airports: JFK, LaGuardia and Newark. Yet on Monday many tracks were shut down for the summer so the city can begin tackling urgently needed repairs.

Read more: New York gets a new ferry system

"We are now beginning to see what happens when mass transit systems break down. We have a painful precursor, a series of breakdowns with Amtrak and Pennsylvania Station," said New York state Governor Andrew Cuomo, "When you close down the tracks there is a series of dominoes that fall, that puts the entire system near collapse." This was during the press conference where Cuomo declared a state of emergency for the transit system.

USA, New York's Pennsylvania Station (Reuters/M.Segar)

At 120 years of age it's a miracle that New York's overworked city trsansport system is still working.

The old subways of New York

And it is not only the subway that needs repair: Streets are littered with potholes, dilapidated tunnels are increasingly dangerous and the sewage systems need maintenance. Electricity grids, gas and oil pipelines, ports, freight rail and internet broadband are all infrastructure that require constant maintenance, yet they are privately owned and well kept.

Read more: There's a prison in Saks 5th Avenue

It is the infrastructure that falls under government watch that is failing. "Everyone wants the benefits of good infrastructure and nobody wants to pay, so things are allowed to deteriorate," says Ingo Walter, Professor Emeritus of Finance at New York University, "Transportation is the lynchpin. Fixing our roads, bridges, tunnels and transportation hubs are a must and will have the biggest impact."

Every four years the American Society of Civil Engineers (ASCE) measures the conditions of bridge, water and transportation infrastructure within the US and publishes its findings through the Infrastructure Report Card. New York received a C- in 2017. With one-third of America's entire public transport belonging to the state of New York, this is a critical and costly failure.

Why are they so off track?

The report card for America's entire infrastructure system was even worse. The US scored a lowly D+.

USA Kalifornien Erdrutsch bei Big Sur (picture-alliance/prisma/C. Heeb)

The American Society of Civil Engineers has reported that 2,000 dams could break at any moment, 56,000 bridges across the country are crumbling and one out of every five roads needs repair.

"It affects how we are engaging in the economy," says Brian Pallasch, the director of ASCE, "It hurts our GDP. By the year 2020 we are going to lose 4 trillion dollars of growth in GDP. And we have been able to calculate that aging infrastructure costs American families about $3,400 (2,940 euros) a year. Think about the time you waste, the fuel you waste." This includes car repairs for tires busted on bad roads, higher costs for fuel used while sitting in traffic, not to mention the cost of a person's time. ASCE estimated it will cost $3.9 trillion to get American infrastructure back on track.

Trump's plan: More money (maybe)

During his campaign, Trump promised trillions of dollars to tackle this issue. Yet a look at the budget says otherwise: The government will spend only $200 billion on the infrastructure package. The remaining $800 billion must come from states and municipalities - no major problem for wealthy states. But the rural areas remain in disrepair.

Read more: Trump administration unveils massive tax cuts

Trump wants private investors to finance infrastructure projects though private-public partnerships. Trump wants to incentivize this through favorable loans and tax breaks, which could subsidize the private sector, create jobs and ease the burden on the government budget. On the flipside, private companies might charge additional fees in attempts to create return on their investment, essentially asking Americans to pay what would have been saved in taxes, in addition to their regular tax payments.

This model also opens the door to inequality, as the cities that need the most funding do not attract investors. Examples of this can be found in Michigan, where Detroit and Flint are essentially a shambles following a major loss of industry. WalletHub voted them the worst cities in America, leaving them at spots 149 and 143 out of 150 cities. There are no prestigious projects to attract investors there. "Congress has not looked after the infrastructure for a decade, and now we see the consequences," says Pallasch.

Watch video 01:45

Trump's budget for a greater America

Penn Station is just the beginning.

DW recommends

Audios and videos on the topic

Albanian Shqip

Amharic አማርኛ

Arabic العربية

Bengali বাংলা

Bosnian B/H/S

Bulgarian Български

Chinese (Simplified) 简

Chinese (Traditional) 繁

Croatian Hrvatski

Dari دری

English English

French Français

German Deutsch

Greek Ελληνικά

Hausa Hausa

Hindi हिन्दी

Indonesian Bahasa Indonesia

Kiswahili Kiswahili

Macedonian Македонски

Pashto پښتو

Persian فارسی

Polish Polski

Portuguese Português para África

Portuguese Português do Brasil

Romanian Română

Russian Русский

Serbian Српски/Srpski

Spanish Español

Turkish Türkçe

Ukrainian Українська

Urdu اردو