I have been making the point (here, here, here) that we should resist the emerging Very Serious D.C. conventional wisdom that the financial bailout will constrain our ability to make other much-needed public investments.
The latest pundit I shall recruit to make the point for me is Ezra Klein. Here, he argues that we can’t not invest in healthcare reform — healthcare costs are rising and will soon completely swamp the federal budget.
The point transfers straightforwardly to energy. Obama’s energy and infrastructure programs are "expensive," but he has proposed them at a time when energy costs are steadily rising (especially for the poor and middle class), infrastructure is on the verge of crumbling, and national security and competitiveness are on the line. In what sense would it be fiscally prudent to push this reckoning even further into the future as the problems continue to fester? In what sense is it fiscally prudent to respond to economic stagnation by cutting stimulus? The amount we’ll eventually have to spend will only grow with delay.
As Ezra says:
A recession creates a straightforward Keynesian case for increased investment. When natural economic demand slackens, the need for public investment to kickstart the economy increases. Meanwhile, short-term problems do not obviate long-term threats. The looming dangers posed by health costs, global warming, etc, will not pause to politely wait out our recession.