For those of you who, like me, are big fans of Madison Metro’s new hybrid buses, there is more good news on the way. The stimulus package will include $9.5 million earmarked for new transportation spending, which the city has decided to spend on 18 new hybrid buses. Really, what’s not to like? They are quieter, have a much smoother acceleration, save money on gas and help limit the damage we cause to the environment.

From a fiscal responsibility point of view, the decision to use the money this way ought to be commended. The city needs to replace old buses anyway, so buying new buses will save the city money in the long run. The purchase of hybrid buses also cuts down on operating costs by saving on fuel expenses.

When looked at from the perspective of using money that, according to Mayor Dave Cieslewicz, the city could only spend on capital and new purchases, I find it hard to think of a better use for the money. But when you think about the true opportunity cost of the expense, things start to change a little bit.

For example, were it not for federal restrictions on the use of the money, the city could have used some of it in order to finance the city’s bus system without the need for a 50-cent increase in bus fares. Even assuming we can stimulate our economy by running up huge deficits, it makes more sense to keep transportation affordable to ordinary Madisonians rather than help a bus company stay in business or expand. Maybe this order for new buses will help save jobs or create new ones. Or maybe not.

However, we can certainly say cheaper transportation would help benefit the economic growth of the Madison area. It would give consumers more disposable income to spend and create more job opportunities for people by making it economical for them to commute longer distances to work across the city.

Putting this money in the hands of everyday residents of Madison, the money can begin stimulating our economy sooner because it will be spent immediately. Spending the money on bus companies and waiting for the impact of that money to trickle down to everyone else will take much longer and certainly have much less of an effect. In fact, it seems to work a lot like the same trickle down economics that allowed the Bush administration tax cuts to improve the lives of ever so many lower class Americans. Unfortunately, that’s what happens when control over things like this is concentrated at the top.

This is, of course, just one of many examples of wasteful spending that I’m sure abound in the stimulus package. There is just no way Washington will ever deem it important enough to look into how Madison or any other city could best spend their transportation money.

On the other hand, just like there are better ways this money could be spent by Madison Metro, there are still better uses for the money in the first place. Remember that whole credit crunch thing that resulted in the need for a stimulus bill in the first place? How so many companies couldn’t get the loans they needed even for day to day operations? And how the federal government needs to step in to loan companies like GM money they couldn’t get anywhere else just to stay in business?

That $9.5 million to pay for our new buses had to come from somewhere. Since our federal government has so graciously decided run up a deficit of over $1 trillion this year, that money will come from the same place the deficit financing will. In essence, it will come through the borrowing of money. Since the federal government is a pretty safe entity to loan money to we likely won’t have a problem finding people to finance our debt. The problem though lies in that there are so few people who have any money to loan someone right now. If the federal government is eating up those loans, it’s only going to divert financing from other projects and impede the ability of the private sector to start creating new jobs and economic growth.

As worthwhile as spending extra money on new hybrid buses might seem, combined with the other billions of dollars of likely inefficient spending, the stimulus package won’t help lead us out of our economic crisis. Instead, it will just divert much need capital away from companies in the private sector, further exasperating our situation.

Patrick McEwen ([email protected]) is a sophomore majoring in nuclear engineering.