There aren’t many signs of construction in the now officially bankrupt city of Detroit, except for a widening of one of the interstate highways for a short distance on the way to the airport.
Indeed, apart from that project, the ailing city doesn’t have much to show generally from the $789bn American Reinvestment and Recovery Act passed in the wake of the financial meltdown in 2008. Detroit received more than $500m but only 20 per cent of that went to transport and construction.
But Detroit isn’t exactly alone. Virtually no American city with the possible exception of Washington has been a lasting beneficiary of the act. “Most of the money went to consumption, not to investment,” says one senior Fed official. There is especially little in the way of infrastructure to show for the money.