I’m sure you’ve all seen the latest economic numbers. Zero jobs were created in August. Europe is in full-fledged crisis. The New York Times reports we are on the verge of a double-dip recession. To the extent we ever did exit the 2007-09 recession, it was solely due to the stimulus package that President Barack Obama pushed through Congress in February 2009. That stimulus was too small, but it also included $8 billion for high speed rail – and that money is what has brought California close to starting construction on its high speed rail project.

As the global economy teeters on the brink, many leading economic observers are screaming for more stimulus, recognizing that the only way to avoid another crash and a prolonged Depression is to generate new demand by creating jobs and sparking spending. Bill Gross, founder of Newport Beach’s Pacific Investment Management Company (PIMCO) and one of the most influential investors on the planet, called for massive new infrastructure stimulus, between $3 and $4 trillion in size, to avoid a double-dip:

In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they’re sitting pretty as it is. Government must step up to the plate, as it should have in early 2009. An infrastructure bank to fund badly needed reconstruction projects is a commonly accepted idea, despite the limitations of the original “shovel-ready” stimulus program in 2009.

Nouriel Roubini, who was one of the most prescient voices predicting the 2008 crash and recession, has similarly been screaming about the need for more stimulus:

“You need to restore economic growth, not five years from now, you need to restore it today,” Roubini said. “In the short term, we need to do massive stimulus, otherwise there’s going to be another Great Depression. Things are getting worse and the big difference between now and a few years ago is that this time around we’re running out of policy bullets.”

It’s obvious to everybody who actually understands how the global economy works that we are facing a serious crisis, leading to greater unemployment and suffering, unless we produce more stimulus, focused on infrastructure. High speed rail is exactly the kind of stimulus that we need – it will put a lot of people to work, save money over the long-term, and support new growth for decades to come.

Or we can sit on our ass and do nothing. That is the path advocated by LA Times reporter Ralph Vartabedian in an article full of fear, uncertainty and doubt about high speed rail costs. The article isn’t even very well-informed as to the details of the HSR project, but its primary purpose is to say “omg this might cost a lot of money so we shouldn’t do it!”

It’s the kind of argument made by someone who either has no clue about the economic crisis we face or who simply doesn’t care.

State voters have agreed to issue more than $9 billion in bonds to build the system, but that’s a fraction of the $43 billion projected tab for the initial phase. And those costs could swell to $65 billion or more, by some estimates.

Should federal funds dry up after the scheduled start of construction next year, the state could be left with no more than an unfulfilled dream and some tracks in the Central Valley.

“If the federal government and private investors are not going to provide funds, and California is broke, why would it take on an enormous new commitment?” asked Martin Wachs, a Rand Corp. transportation expert and former director of UC Berkeley’s Institute of Transportation Studies.

This is nonsense. The federal government, in the form of President Obama and the Senate, have shown a strong desire to provide funds. The article quotes Kevin McCarthy, a leading House Republican who represents Bakersfield, as saying the House isn’t interested in more HSR funding:

Rep. Kevin McCarthy (R-Bakersfield), the majority whip whose district would be served by the rail line, said he doubted that any spending measure that contains funding for high-speed rail in California or anywhere else would pass the House.

“I don’t know how anybody can come to the conclusion that the California high-speed rail is a good investment in the financial times we are in,” McCarthy said. “When California has the deficit problem it has now, how can it envision finishing this?”

What Vartabedian doesn’t tell readers is that McCarthy’s party is facing a return to minority status, as polls suggest Democrats will retake the House in the 2012 election.

More importantly, Vartabedian assumes that McCarthy is right that deficits and recession mean we shouldn’t spend money on new things. That is exactly the kind of thinking that has caused the recovery to stall. “The financial times we are in” require us to spend a LOT more money to get out of it, as Gross and Roubini suggest.

It’s not a new lesson. The infrastructure projects of the 1930s helped pull the state and the country out of the depths of the Depression, sliding back only in 1937 when stimulus was withdrawn too soon. The Depression ended for good when a truly enormous government stimulus program, World War II, was launched. It doesn’t require a war to get government to launch a huge spending project. It can and ought to be done in peacetime, especially when the rewards are so obvious.

One reason we’re not seeing that coming out of Congress right now is because media outlets like the LA Times run articles designed to scare people into thinking that doing something to get out of a crisis is somehow worse than doing nothing and ensuring we stay there. Just look at the fear mongering in this article:

The upcoming decisions on the high-speed rail system represent one of the ultimate philosophical clashes in public spending. The sheer size and scope of the rail system makes it one of the most ambitious programs ever undertaken by a state known for gutsy projects….

In scope and cost, it would eclipse any of the state’s dams, office buildings, canals, highways or other government structures, including the Golden Gate Bridge.

Even if there are no cost overruns, it would be twice as expensive as the State Water Project, the 1960s-era system that transports northern Sierra water to Southern California. A study this year estimated the current cost to replace that system of dams and canals at $18 billion.

And the plan would require some ambitious engineering. Tunnels would stretch miles. Trains would soar over cities atop viaducts six stories tall. Three mountain ranges would be crossed. The zigzagging route would gobble up homes, businesses and farmland.

Vartabedian gives this litany to suggest all the things that could go wrong with the HSR project, with the intent of showing people “see? this isn’t a good idea.” But a state that was interested in building a better future rather than wallowing in the gutter would look at these challenges and say “so what? We can solve those problems.”

The article wonders what Governor Jerry Brown will do given these concerns, and quotes Brown’s advisors:

A Brown advisor, speaking on condition that he not be identified, said a “steep erosion in confidence” in the authority has led to concerns about the project. The authority had planned to issue a new business plan in October to support the upcoming bond issue, but that plan may be delayed by Brown’s review, he said.

To accelerate the network’s development, the Brown administration might seek to tie high-speed service into existing urban rail systems.

Yesterday’s news that the ridership projections have been validated by the peer review group should be a big help. Many of the CHSRA’s critics based their arguments in claims that the ridership numbers are flawed. They can no longer credibly make that claim, and that means the Business Plan will be that much stronger once it’s completed.

I don’t think that tying HSR service into “existing urban rail systems” will do anything at all to “accelerate the network’s development,” however. The key is the Central Valley, linking SF to LA. Simply upgrading existing urban rail systems will do very little to help achieve the all-important goal of linking SF to LA, rather than SF to San José or LA to Anaheim. And building in urban areas is going to be much, much more difficult than building in the Central Valley.

Still, we should keep in mind that Gov. Brown understands the need to take risks to embrace a better future:

Gov. Jerry Brown said this afternoon that California’s embattled high-speed rail project should move forward, despite growing criticism about the project’s management and cost.

While the nation is in a “period of massive retrenchment,” Brown told The Fresno Bee’s editorial board, “I would like to be part of the group that gets America to think big again.”

The Obama Administration clearly agrees, as the article closes with this quote from the USDOT:

“I can’t think of any mega-project like this that had all of the funding in place before it began,” said Roy W. Kienitz, undersecretary of the U.S. Department of Transportation. “If you have the ambition to do something big like this, you have to live with the fact that there is going to be uncertainty in the future.”

The project’s details matter. But if we approach them with a constructive and bold spirit, we can solve them. If we approach them with a destructive and timid spirit, we’ll be bogged down by the smallest and simplest problems, paralyzed into inaction.

In short, it’s not really about the details. It’s about our political will to solve them. High speed rail has life in California because enough voters and leaders realized it was part of our economic recovery strategy. Its fate will be determined on the basis of our commitment to recovery – and our commitment to our own future.