"The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation, from Philadelphia to Fresno.
Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.
And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead."
I have a question to my right and to my left.
To the right: how can "crowding out" even come into your lexicon at a time like this? You clearly understand the concept of simultaneously determined investment decisions. Have you even given a thought to the prospect of "crowding in"?
To the left: why are you always so quick (as Krugman does further down in the column) to suggest that the federal government oughta fund these state level decisions? Why is local, decentralized governance not even in your toolbox? Is it a practical issue for you? I suppose that might make some sense. But why is federal provision always the option you jump on?
"The most immediate threat to the welfare of the citizens of Maryland in the present age arises not from excessive power in their state government, but from a lack of power which prevents their state government from acting effectively... it must be recognized that... oppression can result as much from governmental inaction, as it can from governmental action."
- H. Vernon Eney, 1967