Average is Over for public sector investment too

Medicare spending continues to rise, but in other areas we are seeing significant cuts:

Kirk Dale, the township supervisor of Marlette, Michigan, has first-hand experience of what it means to spend less on infrastructure. Thirty years ago, he felt his small town was on the rise when Cooper Road, a local residential street, was first paved. But today, Marlette cannot afford the maintenance and has joined a number of small communities that have pulverised their streets and gone back to gravel.

“You make a calculated, rational decision on which mile to do,” said Mr Dale, the township supervisor. “And then you look long-term down the line saying ‘Hey, even if we were to pave this, how are we going to repave this 10 or 15 years down the line?’”

Is that good news or bad news?  By the way:

Gross capital investment by the public sector has dropped to just 3.6 per cent of US output compared with a postwar average of 5 per cent, according to figures compiled by the Financial Times.

The FT article is here.