Wendell Cox discusses the high-speed rail boondogle ("The Runaway Subsidy Train") in today's WSJ and I cannot imagine that these investments can make anyone beyond the Baptists and bootleggers (greens and construction interests) involved (thank you, Prof. Yandle) less gloomy. I can imagine that they signal, instead, that policy makers are confused and spenders are in charge.
In this week's Becker-Posner blog, Judge Posner writes about subsidies and deficits. He ends with this:
There is an enormous amount of idle productive capacity in the U.S. economy at present. There is thus a case, as liberal economists such as Paul Krugman keep urging, for further stimulus spending. The problem is that such spending is irresponsible unless coupled with a credible commitment to repay, after the economy recovers, the money borrowed to finance the spending. Not only is there no such commitment; at present the only realistic prospect is of staggering deficits stretching indefinitely into the future ...
I would say that the extreme unlikelihood of getting a "credible commitment to repay" explains the "malaise" that worries Shiller.