Paul Krugman rightly gives Chris Christie hell for dropping out of the Hudson River rail tunnel project, the largest infrastructure project in the country. He explains that this is probably the worst possible time to cancel infrastructure projects, with unemployment in crisis and job growth stagnant. From not only a jobs standpoint but an economic development standpoint, this was a pathetically bad decision.

With almost 1,200 people per square mile, New Jersey is the most densely populated state in America, more densely populated than any major European nation. Add in the fact that many residents work in New York, and you have a state that can’t function without adequate public transportation. There just isn’t enough space for everyone to drive to work.

But right now there’s just one century-old rail tunnel linking New Jersey and New York — and it’s running close to capacity. The need for another tunnel couldn’t be more obvious.

So last year the project began. Of the $8.7 billion in planned funding, less than a third was to come from the State of New Jersey; the rest would come, in roughly equal amounts, from the independent Port Authority of New York and New Jersey and from the federal government. Even if costs were to rise substantially, as they often do on big projects, it was a very good deal for the state.

But Mr. Christie killed it anyway.

Krugman adds that Christie basically did this so he could avoid raising New Jersey’s low gas taxes, and shift the Hudson rail tunnel money into their highway fund account. But really, he was engaging in the same neo-Hooverist behavior that we’ve seen in states all over the country, which has basically cancelled out the federal stimulus at this point. We saw this in the jobs numbers – all the private employment was offset by public-sector cuts. The loss of the tunnel simply recapitulates this unbelievably short-sighted and counter-productive approach to governing.

And by the way, there’s not a dime’s worth of difference on this front between Paul Krugman’s opinion and Larry Summers’ opinion:

Summers calls for infrastructure spending, by Alan Rappeport, FT: Larry Summers … said the US must ramp up spending on domestic infrastructure to drive the economic recovery. …Mr Summers called it a “short-term imperative and a long-term macroeconomic imperative” that the US government increase infrastructure investment. He said that a combination of low borrowing costs, cheap building costs and high levels of unemployment in the construction sector made this the ideal time to rebuild roads, bridges and airports. …

Acknowledging resistance to government spending at a time of high deficits, Mr Summers said that public support for investment demand needed to grow and said that the US needed focus on technology that creates new opportunities as “productive investment.” He said that the Obama administration would concentrate its efforts on technology that reduces healthcare costs and improves energy efficiency. …

“Roads, bridges and airports” comes from the front-loaded infrastructure bank spending proposed by the President in September, but certainly this rail tunnel would be seen in the same context. And that’s not all. There are water systems, and health IT, and a smart energy grid, and weatherizing homes and schools and public buildings, and any number of other infrastructure projects we need to undertake. But the current prevailing political ideology would rather stunt economic growth and ruin America’s future.