Speaking of stimulus, I wondered last week if the Obama brain trust was de-emphasizing mass transit and high-speed rail in its big economic-recovery bill because they couldn't find enough "shovel-ready" projects that could get underway (and create new jobs) within a year. But Paul Krugman argues in The New York Times that "shovel-ready" isn't necessarily the best way to think about this:
As far as I can tell, Mr. Obama’s planners have focused on investment projects that will deliver their main jobs boost over the next two years. But since unemployment is likely to remain high well beyond that two-year window, the plan should also include longer-term investment projects.
And bear in mind that even a project that delivers its main punch in, say, 2011 can provide significant economic support in earlier years. If Mr. Obama drops the “jump-start” metaphor, if he accepts the reality that we need a multi-year program rather than a short burst of activity, he can create a lot more jobs through government investment, even in the near term.
Still, shouldn’t Mr. Obama wait for proof that a bigger, longer-term plan is needed? No. Right now the investment portion of the Obama plan is limited by a shortage of “shovel ready” projects, projects ready to go on short notice. A lot more investment can be under way by late 2010 or 2011 if Mr. Obama gives the go-ahead now — but if he waits too long before deciding, that window of opportunity will be gone.
To put this graphically, here's that widely circulated chart created by Obama advisers Jared Bernstein and Christina Romer, illustrating their projections for unemployment with and without the stimulus bill:
Notice that unemployment will still be plenty high in 2011 and 2012—especially if you believe, as Krugman does, that the Obama team may be underestimating how severe this recession will be—so an investment project that couldn't get rolling for a year or two might still be worth doing as a means of creating jobs.
On the other hand, as far as transit is concerned, I could see why Congress might prefer to deal with this when the transportation bill comes up for reauthorization later this year, when lawmakers can put more thought into how best to reorient funding priorities away from mindless highway spending and toward greater support for passenger rail, freight, and mass transit, rather than setting policy in a slapdash fashion via the stimulus package. After all, with most rail and transit projects, the main focus should be on how useful they are at reducing emissions and congestion, and at boosting productivity in a metro area—and not how many jobs they produce in the short term. A stimulus bill is probably best used either to help finance ready-to-go projects or to offer aid to transit agencies facing shortfalls (or, as mentioned before, helping those agencies reduce their fares, which would provide a perfectly "green" tax break).