Baltimore should be a wake-up call: the West’s creaking infrastructure is its Achilles heel

Fashionable green projects are devouring funds while basic facilities vital to the economy are ignored

The collapse of Baltimore’s Francis Scott Key Bridge has shocked the world. After a container ship lost control over its steering and veered into one of its pillars, the bridge crumpled like a rag doll.

Separate to the terrible human tragedy, the accident raises questions about both the robustness of America’s key infrastructure and its vulnerability to attack: after all, if a freak accident could do this sort of damage, what would a concerted effort by an enemy power look like?

The economic damage caused by the collapse of the bridge is extensive. This is because the ruins of the bridge are blocking the entrance to Baltimore port, the 17th largest port in America and an important transport artery for the movement of coal, automotive vehicles and construction machinery.

The port has nearly 140,000 jobs tied to it, jobs that are enormously important in the increasingly impoverished city of Baltimore.

Mass lay-offs would likely give rise to a wave of crime in the area, something that policymakers will have to pay close attention to considering the city’s proximity to Washington DC, which has been experiencing a major crime wave in recent years, including an almost 40pc spike in 2023.

Last year, Baltimore port saw a record 52.3m tonnes of foreign cargo pass through. It is the leading nexus for sugar and gypsum – the material used to make fertiliser, plasterboard and plaster. The disruption is almost certain to feed into American inflation numbers in the coming months. Reports suggest that it will take months to unblock the port.

The Biden administration will be extremely sensitive to any increase in inflation after the publication of a paper headed by Larry Summers, a former secretary of the treasury, showing that the recent wave of inflation was mismeasured and by historical standards it was much worse than the numbers suggest.

Summers and his team lay out a credible case that the severity of the inflation explains President Joe Biden’s dismal polling on the economy – an issue that increasingly looks like it will determine the upcoming election.

The question is not so much what has happened to America’s infrastructure – which has simply been left to rot – but why American policymakers have stopped paying attention. When the Obama administration presented its American Recovery and Reinvestment Act (ARRA) in 2009 to counter the economic effects of the financial crisis, infrastructure spending was at the top of the bill.

The ARRA provided $46bn (£36bn) in spending for transportation projects, including $27bn for highway and bridge construction and repair. Yet when the Biden administration’s big spending bill the Inflation Reduction Act (IRA) was presented in 2022, the focus had shifted from meat and potatoes infrastructure spending to fashionable green energy projects.

This speaks to the emergence of an enormous and well-connected green lobby in Washington. Gone are the days when the green movement was populated by do-gooders and hippies who would man Greenpeace boats to stop whaling.

As in Britain, the net zero lobby has proven adept at diverting fiscal expenditure to green projects. As in the UK, politicians have struggled to resist their demands for fear they will be labelled climate “deniers” and subject to unfavourable headlines. At some point, they will need to ask whether this is a price worth paying for functioning infrastructure and greater self-sufficiency.

In the wake of the collapse of the Francis Scott Key Bridge, Mr Biden stepped forward to assure the public that the federal government would fund its reconstruction. Experts say that rebuilding the bridge will take years and will cost billions of dollars. This raises the obvious question: if the bridge was better maintained, would it have collapsed after being hit by a ship?

Perhaps the collapse of the bridge will lead to a revival in public discussion of America’s crumbling infrastructure and the serious risk this poses to the economy. But that discussion may be too little, too late as there are increasing signs that the American government is going broke.

Last week Phillip Swagel, the head of the Congressional Budget Office, suggested that the United States might be heading for a similar crisis that befell the Liz Truss government when it tried to push through tax cuts that the country could not afford. After years of wayward spending on the pandemic, the Ukraine war, and the IRA it is not clear the country has any fiscal headroom left.

There are also signals that a slow burn de-dollarisation is taking place in the world economy. The rest of the world is clearly losing faith in its reserve currency.

It feels like all this will come to a head if and when a recession sets in. A recession will vastly lower tax revenues and raise spending on unemployment claims. This will be nothing short of a trial by fire for American public finances. Hopefully they hold up better than the Francis Scott Key Bridge.