The Los Angeles Times captures some of the excitement around the stimulus package and the opportunity for it to create jobs. In the bleak economy, such enthusiasm (in addition to federal funding) can help create opportunities. But the sustainability of the of the government largess is questionable unless it can create a market through incentives (read: selective tax policy), or the private sector believes some of these energy endeavors will be profitable without subsidies.
Over the next few years, we are likely to hear about government waste on one hand, and slow spend out rates on the other. The federal government is not quick or efficient at spending money, often due to onerous regulations and lack of qualified people. But when a federal program is successful (the New Deal’s Rural Electrification Program or the federal highway system) the country often forgets it was the government’s initiative. The difficulty with judging the success of this energy initiative is that it is difficult to create outcome goals for research and development program. Any transformative federal initiative should be judged in the long run; however, this administration won’t have the luxury of time and would be well suited to adopt realistic short-term specific output goals.