MARCUS: It's not too late for a high-speed stimulus

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Morton Marcus

“Too little, too late” is the standard objection to the economic stimulus program now in effect. That criticism is based on opinion, not fact. It will take several years to know whether the stimulus (or stimuli, because there was more than a single stimulus) worked. We do know that funds from the federal government were used by state and local governments everywhere to supplement or replace their own depleted revenue.

This meant people held jobs that would otherwise have been cut. It meant contracts were let to private firms that would have had thinner order books. Was it enough? What’s enough? We could not expect that a federal stimulus program from a constipated Congress could be enough. We could not expect that the entire economic slide of the past two years would be offset by federal spending when nearly half the Congress believes (incorrectly) that government spending is inherently sterile.

Yet it is appropriate to ask, “What kind of economic program should we be following now?” Health care is popular, but no one is suggesting giving the health care industry a spending boost. Most people not in the insurance or health care industries want to see lower expenditures for health care. We want our neighbors to take better care of themselves, act on problems before they reach a crisis stage, and accept less than cutting-edge treatment.

What then could be the right kind of economic stimulus? One answer is high-speed rail, not the puny program put forward recently by the federal government. A few disjointed lines operating at speeds that fail to match those of other advanced nations will not do. If we are going to increase productivity (which should always be a priority of government spending), we need a decade-long, integrated national program to design, build and operate an HSR system competitive with any in the world tomorrow.

This would be the national interstate highway program on steroids. It would generate millions of jobs and benefit every corner of the country. (I don’t know how HSR would work for Hawaii.) The upheaval in our cities would be marvelous. It would allow us to tear down decrepit structures along existing rail lines. All grade crossings on the HSR lines would be removed and not a single HSR train would ever be constrained by local speed regulations.

HSR would encourage the improvement of intra-city transportation. When visitors got to Fort Wayne, Indianapolis or South Bend, they would need a means to reach their local destinations. More visitors without cars would mean more local options for transportation.

HSR would help re-establish regional centers. If the new service skipped Sullivan, Vincennes and Princeton on its way from Terre Haute to Evansville, efficient carriers connecting smaller places to larger places would be encouraged. Today, a traveler from Sullivan to Chicago drives through Terre Haute and dreams of a bypass. With HSR, the Sullivan traveler has reason to be in Terre Haute.

Trains build density about well-designed terminals and transfer points. Downtown areas would flourish and the decay of odious suburban sprawl would be accelerated. As a realignment of land values took place, the sad errors of the past century could be eased into oblivion.

Advances in transportation are central to gains in productivity. Web conferences are poor substitutes for face-to-face interaction. Yet, at today’s prices and speeds, the movement of people has been sacrificed and only messages are given premium service.

The HSR network is ideally suited to financing through bonds paid from future revenue. Future citizens would benefit from the system and pay for it as they used it. In the present, however, we can create the jobs we desperately desire.•


Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.


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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...