Forgot your password?
typodupeerror
Government The Almighty Buck News

$30B IT Stimulus Will Create Almost 1 Million Jobs 809

Posted by CmdrTaco
from the i'm-sure-they-won't-filter-anything-either dept.
itif writes "This report takes a look at how many jobs you get if you invest $10 billion each in three different IT infrastructure projects — broadband, health IT and the smart grid. It argues that if you are going to be spending billions on a stimulus package, investing in 'digital infrastructure' creates more jobs than physical infrastructure (e.g. roads and bridges) in the short-term, and you get a whole host of other benefits in the long-term."
This discussion has been archived. No new comments can be posted.

$30B IT Stimulus Will Create Almost 1 Million Jobs

Comments Filter:
  • Bad economics (Score:4, Insightful)

    by Joey Vegetables (686525) on Wednesday January 07, 2009 @01:22PM (#26359519) Journal
    You will get NO net jobs. Every penny spent on a "stimulus" must be taken from taxpayers, either directly or indirectly, either now or in the future, and that penny will NOT be spent creating jobs elsewhere. At best, you are taking away future jobs to support current ones, or, to state exactly the same thing in different terms, you are borrowing from the future to support unsustainable lifestyles now . . . which is exactly what got us into this mess to begin with.
    • Re: (Score:3, Insightful)

      by CTalkobt (81900)

      In a word, No.

      If I borrow $100 now and put it to work now, that $100 will have a net effect of the $100 spent x the current multiplier (ie: I pay Paul, Paul pays the grocer, the grocer pays the mob boss, the mob boss pays the police comissioner, the police comissiner pays his bookie... but I digress).

      So, borrowing $100 now is not the same as borrowing $100 in the future. The $100 now can be used to generate money that, in the future, will simply have never existed.

      And you'll still be left, with the $100, so

      • Re: (Score:3, Informative)

        But the future spending would have the "multiplier" as well. They cancel each other out. Read Hazlitt's "Economics in One Lesson" for more info (there is a free version online but I don't have the link handy ATM).
        • Re:Bad economics (Score:4, Informative)

          by CTalkobt (81900) on Wednesday January 07, 2009 @01:32PM (#26359715) Homepage

          If the $100 is spent now, and the multiplier effect takes place now then it's worth say, $100 x R.

          If the $100 is simply saved, and spent at a future point then at that future point in time, $100 is still only worth $100.

          The net effect of the future $100 would be delayed an additional time until it is actually utilized.

          • Re:Bad economics (Score:5, Insightful)

            by mc6809e (214243) on Wednesday January 07, 2009 @01:40PM (#26359823)

            If the $100 is spent now, and the multiplier effect takes place now then it's worth say, $100 x R.

            If the $100 is simply saved, and spent at a future point then at that future point in time, $100 is still only worth $100.

            The net effect of the future $100 would be delayed an additional time until it is actually utilized.

            But even saved money gets spent by those that borrowed it from savers. There is very little money sitting idle.

            All the government is doing here is diverting saved money that would be spent by borrowers in other parts of the economy and redirecting it to government projects.

            It doesn't create jobs. It reallocates jobs.

            • Re:Bad economics (Score:5, Informative)

              by DragonWriter (970822) on Wednesday January 07, 2009 @01:56PM (#26360133)

              But even saved money gets spent by those that borrowed it from savers.

              It might. It might not. It particularly might not when, as is the case right now, deflation occurs, as $1 tomorrow becomes worth more than $1 today, so it makes perfect sense from the perspective of each individual spender to hold cash and defer spending, since cash then has a positive real rate of return.

              There is very little money sitting idle.

              Not only does hoarding result in money sitting idle, right now there is money outright being destroyed as banks just don't extend credit at all (at least, not in the quantities they have until recently), while they continue to accept deposits and payments on existing debt. Its not like the actual money supply is some fixed number based on the number of pieces of paper currency printed and in circulation; most money exists entirely as notations of account, and while reserve limits and similar regulations limit the amount of some forms of money that can be created, there is nothing that keeps the money supply constant.

              All the government is doing here is diverting saved money that would be spent by borrowers in other parts of the economy and redirecting it to government projects.

              Even if this was true (which it is not, even if you refer to the world economy when you say "the economy"), that could still create jobs in as not all spending is equally effective at job creation. This is especially the case if you talk about creating jobs in the US economy, since the economy from which the US government takes money to spend when it borrows money is not exclusively the US economy.

              It doesn't create jobs. It reallocates jobs.

              No, it reallocates money. Whether or not it creates more jobs than would otherwise be the case depends on how efficient the use it puts money to is at creating jobs as compared to the uses to which the money would otherwise have been put. This is also true (and even more relevant) if you add "in the US" after each instance of "jobs" in the previous sentence.

              • Re: (Score:3, Interesting)

                by plasmacutter (901737)

                I'd like to add that, even if the banks were lending money saved by others, they would not be lending it to the people who actually need it (as if they're keen to take on new debt now anyway).

                Thus, the government taking over the distribution of that money is better for the economy, providing opportunities to earn rather than borrow money.

              • Re:Bad economics (Score:5, Insightful)

                by shaitand (626655) on Wednesday January 07, 2009 @05:20PM (#26363457) Journal

                All of this pretends creating jobs is a magical and wonderful thing. In an ideal economy no jobs would be needed, machines would do the work and wealth would just be distributed to citizens who merely invested it in their choice of machine warehouses.

                Net Value is what must be increased. Our economy has gone astray in a number of areas. A service-based economy is a great choice for a poor nation with limited resources because it is cheap to educated individuals to perform services. A service-based economy is great for banks which siphon off money as its exchanged, the more fluid money the better banks do and service is fluid as can be (banks don't increase net value). Refining and utilizing natural resources is what increases value. Clean a floor and get paid $100 and you've moved $100 around. After the fact you still have one floor and $100. Make a blanket and sell it for $100 and you've turned $20 of raw materials in $100 worth of raw materials leaving you with $100 and $100 worth of materials, or a net value gain for the nation of $80. When as a nation you have a largest pool of national resources in the world, this is the only way to go.

                The U.S. shouldn't be investing in IP generating ventures, IP is artificial value that depends upon regulation to maintain its artificial scarcity. A scarcity that our competitors will not honor. The U.S. should be investing in its own manufacturing and resource infrastructure. Stop taxing the production and profits from materials that qualify for a "Made in the USA" tag and eliminate taxes on the pay of workers who make said products.

                • Re:Bad economics (Score:5, Insightful)

                  by DragonWriter (970822) on Wednesday January 07, 2009 @07:44PM (#26365579)

                  All of this pretends creating jobs is a magical and wonderful thing.

                  No, it is based on the fact that, in the real world, creating jobs is a good thing. Neither "magical" nor "wonderful" are relevant.

                  In an ideal economy no jobs would be needed

                  No, in an ideal world no jobs would be needed, but since such a scenario would not involve scarcity, it would arguably not even have an economy, which is a means by which limited resources are distributed.

                  machines would do the work and wealth would just be distributed to citizens who merely invested it in their choice of machine warehouses.

                  Certainly, there is some attraction to such a pure-capital economy (though I wouldn't call it ideal.) But its not the real world, nor is it something realistically attainable in the short term. Consequently, in the short-term, dealing with the actual consequence the actual recession has for actual people, creating jobs is a good things.

                  Inasmuch as it is possible for people to even begin to approach the kind of life they would have in your proposed pure-capital utopia, they need investable capital -- i.e., money to invest beyond that necessary to spend for self-maintenance. For most people that haven't inherited large sums of money or won the lottery, that means they need a job. So, even if we accept that what you propose is the ideal economy we should be striving for, we need people to have jobs now so that they could have capital to invest in the "machine warehouses" if those ever get built, or in real productive enterprises which actually exist in the interim.

                  Clean a floor and get paid $100 and you've moved $100 around. After the fact you still have one floor and $100.

                  You are presuming that a clean floor has the same value as a dirty floor, which is exactly the same mistake as assuming that a block of gold ore has the same value as the gold it could be refined into which has the same value as, say, the spacesuit helmet visor screen that could be produced from the refined gold.

                  Also, you have $100, and the person who paid you to clean their floor has a clean floor that used to be a dirty floor; and clearly, the clean floor is worth $100 more than the dirty floor to them, otherwise the exchange wouldn't have taken place.

                  Make a blanket and sell it for $100 and you've turned $20 of raw materials in $100 worth of raw materials leaving you with $100 and $100 worth of materials

                  Wrong. Make a blanket and sell it for $100 and you've turned some quantity of raw materials into $100 of finished product, leaving you with $100, and the person who bought the blanket with a product worth $100 to them. In either case, the person paying you has received something worth $100 to them, and given $100 to you.

                  If services didn't produce value, no one would pay for them.

            • Re:Bad economics (Score:5, Insightful)

              by Anonymous Coward on Wednesday January 07, 2009 @02:04PM (#26360241)

              People sitting around doing nothing is wasted capital. Even if you have to borrow to get them to do work, you have produced something greater than your investment.

              The idea that the private sector would more efficiently allocate human capital is irrelevant in deep recessions. In these cases, the private sector is quite literally sitting around waiting for someone else to take the risks.

              • Less is More (Score:3, Insightful)

                by mosb1000 (710161)
                "People sitting around doing nothing is wasted capital."

                Sometimes doing nothing is better than doing something. I am talking to you, Uncle Sam.
              • Re: (Score:3, Interesting)

                by tweek (18111)

                Keynes, is that you?

                Maybe the reason the private sector is scared of the risks is because they're...risky?

                Why, then, does it make sense for our government to take that risk.

                The odds aren't really in the government's favor here.

                • Re: (Score:3, Interesting)

                  by idontgno (624372)

                  Why, then, does it make sense for our government to take that risk.

                  Because governments are too big to fail!*

                  *With a few exceptions, like Denmark, 1813; most of Latin America circa 2004-2005; Iceland, right now...

                • Re: (Score:3, Interesting)

                  by jbolden (176878)

                  What risk? The government doesn't operate with the same risk portfolio as in an individual investor. If we ignore trade, because they have the power to tax all the money is really theirs. "Risk" to them doesn't exist, if they overestimate how much money is going from Paul to Peter they can move money from Peter to Paul instantly via. taxation.

                  Also they can create or destroy money at will (we have a fiat system) none of the individual players can do that.

                • by RustinHWright (1304191) on Wednesday January 07, 2009 @04:01PM (#26362095) Homepage Journal

                  A company must turn a profit to succeed. A government just needs to accomplish a decent rate of return on their investment for the entire aggregated economy it governs. If Blah Corp takes on the risk of creating a new design it fails if Goo Corp copies it and gets to market first. If the U.S. government takes on the "risk" of, say, putting in more internet capacity, the "downside" is limited to overestimating demand. That's what everybody was saying Korea did in the nineties. Now that those fat pipes have helped Korea become a powerhouse in a dozen fields, nobody is saying that anymore.
                  The only real risk that government faces is if the level of corruption is so vast that nothing gets built. This is a real risk, as anybody who has watched the fiasco of the "digitizing" of the patent system call tell you about. But it is addressable and is a risk for corporations, too.
                  Look at what happened to the OLPC project. Their own devices have been meh at best. But it's pretty damn obvious that they inspired the netbook market, which has been a vast win for everybody, including their intended recipients. No OLPC, no Intel Classmate, no EEE PC, and so forth. And, from the looks of it, we'll be seeing the Pixel Qi tech coming out in another year or two, which will be yet another vast win for their intended result. Have they "turned a profit"? No. Have they achieved an excellent return on investment? Hell fucking yes.
                  In short, most of what makes a project "risky" to a profit-making entity is a null-value statement in a case like this.

            • Re: (Score:3, Insightful)

              by Mattsson (105422)

              It doesn't create jobs. It reallocates jobs.

              Depends.
              If you use the money on X instead of Y and X create exactly the same amount of jobs as Y, then it simply is a reallocation.
              If X creates one more job than Y, then more jobs are indeed being created.

              It's all about how to most wisely spend what is collected as tax.

          • Re: (Score:3, Insightful)

            by Lumpy (12016)

            $100 saved is $100 + interest earned on it - Inflation.

            $100 kept in a box is $100 - inflation.

            $100 invested is a gamble. It might be $10,000 in a few years or it might be $0 in a couple of weeks. you can not guarantee anything when it comes to money. that's how a lot of the problems we have today started. It all depends on the odds of the investment.

            • Re: (Score:3, Informative)

              by CodeBuster (516420)

              While it is possible to approach investing in the same way that one approaches gambling the idea that Investing == Gambling is one of the most persistent and damaging ideas to enjoy wide currency among the non-investor classes of society. The definitions taken from the following article [investorguide.com] are instructive:

              Investing is any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): suff

      • Re:Bad economics (Score:4, Insightful)

        by MickLinux (579158) on Wednesday January 07, 2009 @01:42PM (#26359869) Journal

        You are also forgetting that we are living in the bursting of the largest credit bubble in human history. So every dollar taken in taxes right now is *not* an additional expenditure now.

        Rather, every dollar taken in taxes right now is a dollar that will not be spent in a different way, now.

        Now, where that is nonapplicable, is in the fact that a lot of dollars are spent in "investment", and those dollars are evaporating at an amazing rate. In other words, if you leave the dollars with the rich, then they will disappear with no net benefit at all. On the other hand, redistributing them to new jobs gives a current net benefit.

        But unfortunately, dollars spent in electronics basically are the easiest for the rich to cull from. Almost as easy is dollars spent in construction contracts (or any contracts). If you really want to stimulate the economy, you have to spend the dollars directly to the wages (that is, massive government hiring).

        But all that is neither here nor there. Any number of theories about what *should* be done have nothing to do with what *will* happen.

        • by khasim (1285) <brandioch.conner@gmail.com> on Wednesday January 07, 2009 @01:56PM (#26360139)

          If you really want to stimulate the economy, you have to spend the dollars directly to the wages (that is, massive government hiring).

          Yep. The problem is that the government is (with a few exceptions) extremely bad at producing anything other than paperwork and hindrances.

          In my opinion, the government SHOULD hire some more people ... who will determine which citizens belong to the group that will spend the MOST money on legal, local services and start pumping the cash into that segment.

          It's easier for the local pizza place to hire more cooks and delivery people if there is additional demand for pizza delivery due to the locals having more pizza money available.

          Whereas is you just give the pizza store owner additional cash, he's not going to expand his business. There won't be additional demand for him to service.

          Focus on funding the demand and let the supply grow itself.

          • by serviscope_minor (664417) on Wednesday January 07, 2009 @02:36PM (#26360719) Journal

            Yep. The problem is that the government is (with a few exceptions) extremely bad at producing anything other than paperwork and hindrances.

            Why oh why oh why do people keep modding thus utter bullshit as insightful. It isn't it's an ignorant meme repeatedly spread by people with a bizarre faith in business.

            Example of there the government produces something worthwhile: the road network. They produced it, and it basically works year in, year out and the country would fall to pieces without it. In many countries, governments run a significant fraction of the school system as well.

            Example of big business failing miserably: Enron, the current financial crisis.

            So, frankly, anyone spouting this miserable gibberish are unable to muster even the weakest powers of observation of the world around them today, never mind historically. In some cases, the government can do a better job, in some cases they foul up. In some cases businesses do a better job. In some cases they foul up.

            Remember the current stink happened because the government stopped being a "hinderance" and let the businesses do what they wanted. Look where that landed us.

            • by tweek (18111) on Wednesday January 07, 2009 @03:10PM (#26361313) Homepage Journal

              The current stink happened because the government didn't get out of the way enough.

              It injected itself in private business affairs through things like the housing market.

              This Keynesian bullshit that's been going on since FDR is going to just continue to fuck us.

              Having the government artifically prop-up the economy only leads to bubbles and busts like we're seeing now.

              • by jbolden (176878) on Wednesday January 07, 2009 @03:48PM (#26361901) Homepage

                The problems we are having are in general a result of deregulation. For example conflicts of interest between the buy side and the sell side of a brokerage. Or conflicts of interest between the investment banking arm of a bank and the traditional arm. Or conflicts of interest between stockholders and bondholders, or executives and boards of directors.

                That is precisely the kinds of problems that government "getting in the way" is good at fixing.

                • Re: (Score:3, Insightful)

                  by HanzoSpam (713251)

                  The problems we are having are in general a result of deregulation.

                  ROFLMAO!!!

                  I keep hearing that, but I'd like you to name one example of deregulation. You call Sarbanes-Oxley deregulation? Regulation has, in fact, been pouring down thick and fast. The last major repeal of regulation was the reform of the Glass-Steagall Act in 1999. Guess who was president then?

            • by arth1 (260657) on Wednesday January 07, 2009 @03:20PM (#26361477) Homepage Journal

              A few good examples of the governments doing a heck of a better job than the private companies that took over due to populist conservatism:

              • British Railways. Look at the shambles the UK rail transit system is in now.
              • Postal services of multiple countries. The costs to the end users have gone up, and the quality of service has gone down the drain. I have to send presents to relatives overseas through registered FedEx, because the privatized mail system can no longer be trusted to deliver anything.
              • Energy providers, like formerly government owned hydroelectric plants. The cost to consumers have skyrocketed, while the safety guards that were in place are no longer there, and people get affected by outages because redundancy and backups are cut to the bone to save costs.
              • Water. Look up the Cochamba water riots, and what happened when the municipal water supply was privatized.
              • Internet. When governments and government funded education ran the show, peering was a given, and alternative routes would always exist. These days, all the eggs are put in the cheapest basket, and peering is just another way to squeeze the lemon -- if you don't pay our stock holders, we won't carry your traffic. The result is a more expensive service that doesn't auto-repair itself anymore. When a cable breaks, suddenly most of a country or continent is without Internet access, despite all the other cables that connects it.

              Capitalism and consumerism is all about delivering the lowest quality product the market will accept at the highest possible price they will pay. You don't get quality that way.
              Or, to put it in other words, if Stonehenge had been built on contract, it wouldn't have lasted 40 years, and definitely not 4000.

              Sometimes we need officials who don't have a vested economical interest in profitability, but can spend a little extra to get a better product or service. Especially in the products and services that a government can provide.

              I think it's time we saw more nationalization of what's important, not privatization. Leave the non-important stuff to capitalists and market forces, but not what really matters. Cause to a true capitalist, their wallet will always matter more than your welfare.

              • by elefantstn (195873) on Wednesday January 07, 2009 @05:22PM (#26363481)

                Every single one of your examples is, not coincidentally, a privatization where the government granted a monopoly or oligopoly to providers. It should not be surprising that a private company with no competition is as corrupt and inefficient as a government.

                I think it's time we saw more nationalization of what's important, not privatization. Leave the non-important stuff to capitalists and market forces

                'Importance' has nothing to do with it -- availability of competition does. For goods like internet access, we can improve quality by loosening corrupt, good-ol-boy licensing/franchising deals that lock customers into Comcast-or-dialup. For goods like train service, it's probably not feasible.

                Food, though, is certainly more 'important' than either of those two, and every instance of nationalized food supply seems to result in famine.

                • Re: (Score:3, Interesting)

                  by arth1 (260657)

                  Every single one of your examples is, not coincidentally, a privatization where the government granted a monopoly or oligopoly to providers.

                  Should the British government have laid twenty parallel tracks before privatizing British Rail, so there could be real competition? That would only have delayed a fall-back to monopoly.

                  The natural state of capitalism is monopoly and oligopoly. Put ten capitalist players in a pen, and eight of them will be quickly be bought out by the other two, without replacements ap

            • Re: (Score:3, Interesting)

              by EMB Numbers (934125)

              Read James Carville's book: "We're Right, They're Wrong : A Progressive Program for the Millennium"

              He agrees with you. He is also wrong on every point.

              The U.S. Federal Highway System is an abomination. It destroyed inner cities. It damaged our culture. It destroyed rail roads which had to develop and maintain infrastructure on their own under the burden of oppressive regulation at the same time the federal government subsidized the competition (busses, trucks, highways). The government is constantly bu

              • Re: (Score:3, Interesting)

                by xaxa (988988)

                Then you should fix your government. All these things do work, if you pick the right country.

                Who do you sue when the government screws you over ?

                The government, surely?

      • Re:Bad economics (Score:5, Interesting)

        by Flavio (12072) on Wednesday January 07, 2009 @01:46PM (#26359943) Homepage

        If I borrow $100 now and put it to work now, that $100 will have a net effect of the $100 spent x the current multiplier

        Right. And the multiplier has fallen below 1.0 [denninger.net]. The United States cannot print or borrow out of this mess, which is the point that the grandparent post was making.

        It's not like the United States has a safe with trillions of dollars that can be distributed or invested in some central planning scheme. The trillions of dollars which are being offered represent money that the US government doesn't have.

        • Re:Bad economics (Score:4, Informative)

          by DragonWriter (970822) on Wednesday January 07, 2009 @03:11PM (#26361321)

          Right. And the multiplier has fallen below 1.0 [denninger.net].

          The M1 multiplier (that has fallen below zero) is the ratio of the M1 meaure of money supply to the Adjusted Monetary Base measure. . It is fair to say it is something of a measure of the utility of policies that seek to stimulate the economy by increasing M1 (though even there it is limited, since even the Adjusted Monetary Base measure is just a different measure of money supply, not a measure of economic activity); it has little to do with either the velocity of money (the source of the "multiplier effect" being discussed in this thread, which is not the same thing as the "M1 multiplier" you point to; the "multiplier effect" relates to how often a particular dollar in the money supply is spent, not the ratio between two different measures of the money supply) or the ability of the government to stimulate by borrowing dollars from domestic and foreign holders of dollars and spending it in particular, focussed areas (since such policy does not rely on manipulate M1.)

          The author of that piece attempts to confuse the issue by posting a different graph that shows a falling trend in how effective stimulative government deficit spending has been on average recently, and attempting to suggest, without any real reason, that the two graphs are directly related and indeed that the M1 multiplier graph says that the trend shown in the other graph is actually worse than it appears. This is not rational. The second graph does show a long-term problem, and particularly does show why, once this recession ends, the US government must, in the subsequent expansion, begin to pay down the debt or at least stop expanding the debt faster than the GDP during expansions, because if we keep deficit spending through expansions so that the debt:GDP ratio keeps going up, we'll soon reach the point where we can't use deficit spending to stimulate the economy when it is in recession. But, contrary to Denninger's alarmism, the M1 multiplier going below 1 doesn't indicate that the trend in debt utility shown in the second graph is worse than that graph actually shows. They are completely different issues.

          • Re: (Score:3, Insightful)

            by Flavio (12072)

            (...) or the ability of the government to stimulate by borrowing dollars from domestic and foreign holders of dollars and spending it in particular, focussed areas (since such policy does not rely on manipulate M1.)

            The Fed's balance sheet was spent on the first bailouts, and the US is now printing money to cover the current bailouts. The government is manipulating M1.

            The author of that piece attempts to confuse the issue by posting a different graph that shows a falling trend in how effective stimulative go

      • Re: (Score:3, Insightful)

        Hi, I'm Paul, I would like to be paid!

        On a serious note, though... it's still true that if you tax to create something, you're not exactly creating wealth in such a way that you are able to now pay someone to do something... you're just taking money (a tax) in order to pay someone to do something else.

        The point is that you aren't exactly creating a new job, you're almost ... splitting someone else's job. You're taking someone else's worked-for-money to pay someone else to work. Yeah, it's a "new job" bu

        • Re: (Score:3, Interesting)

          by cayenne8 (626475)
          "On a serious note, though... it's still true that if you tax to create something, you're not exactly creating wealth in such a way that you are able to now pay someone to do something... you're just taking money (a tax) in order to pay someone to do something else. "

          Ok...how about instead. The US govt. just gives a tax vacation for the next year?? No taxes taken outta paychecks. I know many middle income people could really use that extra $20K-$30K a year. That way...it is targeted ONLY at taxpayers. The

    • Re:Bad economics (Score:5, Insightful)

      by DragonWriter (970822) on Wednesday January 07, 2009 @01:30PM (#26359679)

      You will get NO net jobs. Every penny spent on a "stimulus" must be taken from taxpayers, either directly or indirectly, either now or in the future, and that penny will NOT be spent creating jobs elsewhere.

      If every use of money (including taking it in cash and stuffing it in a mattress or lighting it on fire) were equally effective at creating jobs, this argument might be relevant (except that the relevant thing isn't that every penny must be taken from taxpayers now or in the potentially-infinitely-distant future, but that every penny must be taken from some other use right now, whether its in the form of taxation or borrowing from someone who has money and would use it for something else if they weren't lending it to the government.)

      Of course, not every use of money is equally effective at creating jobs, and even moreso not every use of money is equally effective at creating jobs within the US economy, so its pretty clear that changing how money is used by either taxing or borrowing money that would be used for one purpose if it were not taxed or borrowed and applying to a different purpose can create more (or less, depending on the uses the money is taken from and the uses it is put to) jobs than would otherwise be the case, and even more certainly the case that doing so can create more jobs in the US economy than would otherwise be the case.

      • by zappepcs (820751)

        That is exactly why I am disappointed that the stimulus packages do not come with a stipulation that all funds must be spent in the USA. They cannot fund overseas operations, outsourcing, shell companies that use outsourcing, or even H1B visa holders. All must be spent on/in the USA. While that has some possible down sides, I don't see them as outweighing the benefits.

        • Re:Bad economics (Score:5, Insightful)

          by beanyk (230597) on Wednesday January 07, 2009 @02:04PM (#26360251)

          As someone who might be an H1B visa holder in the not-too-distant future, what's your problem with them? Is it that we didn't -start out- in the U.S., or that we might leave in the future, or that we're sending envelopes stuffed with cash back home in the mean time? While here, we're paying taxes and consuming locally bought (not locally produced, usually) products just like everyone else ...

          • Re:Bad economics (Score:5, Insightful)

            by ip_fired (730445) on Wednesday January 07, 2009 @02:24PM (#26360539) Homepage

            I think the majority problem that people have with H1B visas is that the H1B visa holders end up working for less than a similarly skilled US worker would normally ask for. As a result it is seen as having their wages pushed down for those who are already here in that particular industry.

            So, when you come over as an H1B, don't settle for a reduced wage. Find out how much they are paying for someone with your experience in the area and then ask for that.

            • Re:Bad economics (Score:5, Interesting)

              by Tanktalus (794810) on Wednesday January 07, 2009 @02:40PM (#26360793) Journal

              So, when you come over as an H1B, don't settle for a reduced wage. Find out how much they are paying for someone with your experience in the area and then ask for that.

              But, but... that's not how the free market works, is it? If I can offer services (me) for less than someone else, why shouldn't I?

    • Re:Bad economics (Score:4, Interesting)

      by LordKronos (470910) on Wednesday January 07, 2009 @01:41PM (#26359857) Homepage

      That's a pretty simplistic view. Better infrastructure can return it's cost by reducing costs in other sectors. Those other sectors, being more cost efficient, have a better chance at competing with other countries, which means more jobs for us, and less for them (and we don't count foreign jobs when figuring net).

      In addition, there are a number of people who don't spend all of their money, but rather just hold onto a bunch of it. Having a better infrastructure can result in a wider variety of companies, services, and product offerings, which increases the chance that maybe something will catch their interest, so that's more money for the average person and a little less in their bank account. Now, granted that is technically a wash, but it will improve things for the people with less money, and the people with more money will be just as happy having their new shiny thing, so everyone wins.

      • Re:Bad economics (Score:4, Interesting)

        by bennomatic (691188) on Wednesday January 07, 2009 @02:05PM (#26360265) Homepage
        Totally true. Imagine if the information infrastructure were so good and so pervasive that no IT workers needed to be in an office. It's true for many who work from their homes, but I'd bet we're at the tip of the iceberg.

        Good info infrastructure leading to a 40-60% reduction in commuters would mean less need for the gov't to spend money on roads, less money that people would have to spend on cars and gas, and would create a resurgence in local economies, because people would spend more money at their local cafe, rather than the Starbucks downtown near their office.

        Not to say there wouldn't be fallout. Lots of low-wage jobs support people who provide maintenance for those huge (suddenly worthless) office buildings, the satellite industry around road maintenance would see reduced growth at the very least, and the auto industry would likely suffer. Of course, they're doing that on their own. Maybe GM and Chrysler should start building bicycles.

        Other positives, though, would include less stressed, more balanced, healthier people (it'd probably bankrupt the healthcare industry to eliminate 2 hours of commuting from so many peoples' days), and reduced dependence on foreign oil and similar reduction of CO2 emissions.

        I'm not saying info infrastructure is the be-all end-all, but man, the possibilities are huge.
    • No, good economics. (Score:5, Interesting)

      by plasmacutter (901737) on Wednesday January 07, 2009 @01:42PM (#26359859)

      You will get NO net jobs. Every penny spent on a "stimulus" must be taken from taxpayers, either directly or indirectly, either now or in the future, and that penny will NOT be spent creating jobs elsewhere. At best, you are taking away future jobs to support current ones, or, to state exactly the same thing in different terms, you are borrowing from the future to support unsustainable lifestyles now . . . which is exactly what got us into this mess to begin with.

      Standard reaganomic bullcrap.

      Taxing the INCOME of the wealthy to build infrastructure actually compels the creation of MORE jobs than just the infrastructure itself.

      I know these things, several of my family members own and manage incorporated entities. The more pressure you put on their personal income, the more they will keep within their corporations, which are taxed far less, resulting in more re-investment (for the layman, that means JOBS AND EXPANSION).

      In addition to that, using those taxes from the wealthy to invest in infrastructure provides subsidized infrastructure for yet more growth.. ironically for all the pissing and moaning that subsidy is to the businesses of the wealthy.

      It's a win-win-win situation.
      the economy is stabilized, jobs are created, and the wealthy get a major subsidy to their business for a little tap-dancing with their accounting.

    • Re:Bad economics (Score:5, Informative)

      by Skreems (598317) on Wednesday January 07, 2009 @01:45PM (#26359919) Homepage

      Every penny spent on a "stimulus" must be taken from taxpayers, either directly or indirectly, either now or in the future, and that penny will NOT be spent creating jobs elsewhere. At best, you are taking away future jobs to support current ones, or, to state exactly the same thing in different terms, you are borrowing from the future to support unsustainable lifestyles now . . . which is exactly what got us into this mess to begin with.

      Not exactly. Borrowing for the wrong reasons is what got us into this mess. Borrowing for the right reasons (increase future earning potential) can more than offset the debt, leaving you with an income large enough to both pay back what you owe and have more to live on than you ever would have without that initial debt. It happens all the time at an individual and corporate level, this is just expanding it to the entire country. The key is having the discipline to pay back the debt once the increased earnings are realized, which so far very few incarnations of government have had the discipline to do.

    • Re: (Score:3, Interesting)

      by MobyDisk (75490)

      Yes, but that is ok.

      The purpose is to smooth out the bumps in the economic road. So borrowing from a future wealthier future where unemployment is low, in exchange for balancing out a recession, is a good thing. Too fast of an economy is dangerous too.

      If only our politicians learned to save, then we could borrow from a pool of money from past good times, instead of borrowing from an uncertain future.

    • Re: (Score:3, Insightful)

      by nine-times (778537)

      By that logic, no expense of money will ever lead to a net creation of jobs-- since that money is always being taken out of something else somewhere else in the system. At best, you're taking away jobs from someplace else to support the ones you're "creating".

      Of course, it doesn't really work out. Money can be spent on good things that improve the economy, or can be spent on stupid things that harm the economy.

  • by Ristoril (60165) on Wednesday January 07, 2009 @01:22PM (#26359525)

    The Internet isn't very useful if the delivery guy can't bring your ThinkGeek toys to you because the roads are broken.

  • 30 billion spread across 1 million workers comes out to 30k a year for one year. This is to say nothing of the administrative costs.

    Sounds like a pie-in-the-sky figure to me. Even with modest returns my guess is a lot of those 1 million jobs will be depreciated in less than a year.
    • Re:High numbers (Score:4, Insightful)

      by moderatorrater (1095745) on Wednesday January 07, 2009 @01:36PM (#26359779)
      You're assuming that the money will be alone and that it won't be used for something sustainable. Let's say, for instance, that the government were to give money to a car company to build a factory. It's not likely that the government will give more than 60% of the money necessary to build the factory in the first place. Then, once that factory's built, it will be able to support itself by building cars that wouldn't have been built otherwise and is self sustaining.

      In the same way, the government can give Verizon (or similar) 60% of the cost to wire California with fiber to the house. It's enough to convince Verizon to undertake the project in the first place and to gather funding from other sources so that they can complete it. Once complete, they're providing a service that wasn't there beforehand, and is well worth buying. The project after that would be sustained by the subscribers, and it could be sold for less money per month since Verizon doesn't have as much money to recoup. Not all of the jobs which were created for that project will stick around, but more jobs will be created due to the higher available bandwidth in the area.
      • Re:High numbers (Score:5, Insightful)

        by L0rdJedi (65690) on Wednesday January 07, 2009 @01:46PM (#26359939)

        The project after that would be sustained by the subscribers, and it could be sold for less money per month since Verizon doesn't have as much money to recoup.

        Hahahaha! You think Verizon is going to sell the service for less just because they got some money from the government? Hahahaha! They will more likely keep the cost the same and the rest is profit (they'll make even more money faster). The cost to maintain the infrastructure will be the same anyway, so why would they lower the end cost? All a govt infusion will do is get the infrastructure built quicker.

        Like many, I'd rather see physical infrastructure updated/maintained sooner than digital infrastructure. You can't even deploy the digital stuff if your physical stuff isn't in good condition.

  • Not "punywage" (Score:4, Insightful)

    by Stile 65 (722451) on Wednesday January 07, 2009 @01:24PM (#26359563) Homepage Journal

    "punywage" is a bad tag for this.

    This would also create jobs (at least in the short term) indirectly, as those who get the high-paying jobs directly related to this "stimulus" will demand additional production and services to fill their personal needs, which will create other jobs, and so on. In this way, each dollar invested in this infrastructure will actually be spent multiple times.

    Of course, the way this is financed is inflationary and backed by the public debt, etc. etc. so in the long term, we'll have to pay all that back and then some.

    • by SuperBanana (662181) on Wednesday January 07, 2009 @01:52PM (#26360081)

      This would also create jobs (at least in the short term) indirectly, as those who get the high-paying jobs directly related to this "stimulus" will demand additional production and services to fill their personal needs, which will create other jobs, and so on. In this way, each dollar invested in this infrastructure will actually be spent multiple times.

      Ronald Regan called from 1980, and wants his trickle-down economics policy back. This is a bullshit lie, and I'll give you two examples of why.

      First off, people in high-paying jobs have a lower marginal propensity to consume. It sounds absurd, but the single parent with a $40k job is spending almost their entire paycheck back into the economy just to survive. Someone who makes $120k is not spending 100% of their paycheck- not even close. They're putting a fair amount into long and short term savings. On a related note, gas and food price jumps really hammer the $40k person more than the $120k person; percentage-of-income-wise, the $40k person spends much more on food and gas than the 120k person does.

      Second: money spent these days very, very quickly leaves your local, state, and national economy. Spend $5 on a burger at national franchise, and a teeny bit of that goes to employing the people in the store. Some of it goes towards the materials for the product, which were made as efficiently and cheaply as possible. Most of it goes to a trademark holding company aka tax shelter in the Cayman Islands as "trademark license fee". The article I mentioned lists Limited Brands, Toys "R" Us, ConAgra Foods, Home Depot, Kmart, Gap, Sherwin-Williams, Circuit City, Stanley Works, Staples, and Burger King as examples. I'm sure there are hundreds more. [nysscpa.org]

      Even locally, money spent largely doesn't go to the business owner if they don't own their own property. It goes largely to the landlord of the property. Commercial property owners aren't in the lower income brackets; they're in the top income brackets, and they're writing off their Mercedes as a business expense.

      Back in the 50's, corporations shared tax responsibilities evenly with the American individual. Now, A HREF="http://www.americanprogress.org/issues/2004/04/b45142.html">corporations pay about 7% and 60% didn't pay a dime. Meanwhile, their tax rate compared to the GDP is around 1.8%, down from the 1950's level of 5%. Meanwhile, you lose about 33% of your paycheck to state and federal taxes, then get taxed on the gas you put in your car and the stuff you buy.

      • Re: (Score:3, Insightful)

        by mattwarden (699984)

        > Most of it goes to a trademark holding company aka tax shelter in the
        > Cayman Islands as "trademark license fee".

        And do you ever ask why?

        > Back in the 50's, corporations shared tax responsibilities evenly with
        > the American individual. Now, corporations pay about 7% and 60% didn't pay a dime.

        And do you ever ask why this changed?

        > Meanwhile, you lose about 33% of your paycheck to state and federal taxes, then
        > get taxed on the gas you put in your car and the stuff you buy

        Oh it's much, muc

      • by shmlco (594907) on Wednesday January 07, 2009 @03:30PM (#26361671) Homepage

        "Someone who makes $120k is not spending 100% of their paycheck- not even close. They're putting a fair amount into long and short term savings."

        And??? You think the money just disappears at that point? Or is it used to buy stocks and bonds, and taken by banks and invested in loans and other financial instruments?

        That money goes into "the economy" too.

        • Re: (Score:3, Insightful)

          by dunkelfalke (91624)

          i wouldn't call stock market gambling an economy, whether it is directly invested or taken by banks and invested again.

      • Uh, no. (Score:3, Insightful)

        by Shivetya (243324)

        Corporations are merely collectors of taxes, so regardless if they actually have a payout to the treasury they are in effect only transferring wealth from American taxpayers to the government. They are nothing more than a proxy for the US government collecting money from income earners. I don't want them to have parity with the regular income earner because it means that even more taxes are indirect and the American citizen loses more. In other words, the more that taxes are indirect the more that fraud,

  • Bad assumptions (Score:5, Insightful)

    by StikyPad (445176) on Wednesday January 07, 2009 @01:31PM (#26359697) Homepage

    On the other hand, upgrading roads and bridges keeps us from falling into sinkholes and ravines en masse.

    At any rate, this is a false dichotomy, and there's every indication that Obama plans to focus on improving both forms of infrastructure.

  • by 4D6963 (933028) on Wednesday January 07, 2009 @01:32PM (#26359717)
    Who tagged it brokenwindowfallacy? It's no broken window fallacy. In the broken fallacy nothing is gained from breaking the window and replacing it. Here we invest into an infrastructure, to end up with something better you can make better business with. It's called an investment.
    • by u38cg (607297) <calum@callingthetune.co.uk> on Wednesday January 07, 2009 @01:50PM (#26360033) Homepage
      OK. Instead of breaking the shopkeepers window, you mug him, take his wallet, and use the contents to have another, extra, window put in his shop. Now he has an extra window to display his produce in and entice passers by. Is this good for him y/n?
      • Re: (Score:3, Insightful)

        by 4D6963 (933028)
        Let's see, "mug him and take his wallet" = taxes? Let me guess, libertarian?
    • Re: (Score:3, Insightful)

      by nine-times (778537)

      Right. The old "war is good for the economy" line is more of an example of the broken window fallacy. Or rather, there's some kind of fallacy floating out there-- and I'm not sure whether it could be considered a "broken window fallacy"-- that "it doesn't matter what the economic activity is; any activity is good activity." That's the mindset that gets us into wars, or convinces people that borrowing money we don't have to buy crap we don't need is "good for the economy".

      Building necessary infrastructur

    • by mattwarden (699984) on Wednesday January 07, 2009 @02:05PM (#26360267) Homepage

      Wow, I hate to be a typical slashdot commenter, but:

      Bzzzt. You're wrong.

      An investment is something you do when the benefits outweigh the costs. If that was the case here, it would have been on the books before the decision to "create jobs."

      This is being done to "create jobs". The logic is: we need jobs, so we might as well do something that has some value and isn't a total loss.

      Creating jobs in a partially useful area is a LOSS MITIGATION STRATEGY not an INVESTMENT.

      The whole idea of "creating jobs" is ridiculous. If "creating jobs" is what it sounds like, then why doesn't the government always do it? And why don't we blame government when there is a rise in unemployment?

      IF the government is paying for this with tax money (that it doesn't have), then this is just a wealth distribution tool (otherwise where are the wages coming from to pay these currently unemployed people?). IF the government is paying for this with debt and inflation (more likely), then this is just a temporary fix that increases the long-term consequences.

      Let's call "creating jobs" what it is: floating more debt and printing more money into the economy and at the same time keeping people busy and superficially happy, with no concern for the long-term consequences. Deciding to do more stuff than was planned in order to create new jobs is by definition doing things where the benefits don't outweigh the costs for the "investment".

      When do we stop deciding to screw over the country to temporarily relieve the difficulties of the minority few?

      • Re: (Score:3, Insightful)

        by nine-times (778537)

        An investment is something you do when the benefits outweigh the costs. If that was the case here, it would have been on the books before the decision to "create jobs."

        Even according to this, building useful infrastructure sounds like an "investment". Unfortunately, we've under-invested in our infrastructure for several decades, an in recent times somehow magically expected the "free market" to take care of keeping our bridges from falling down.

        Building good and useful infrastructure is an investment, and one that happens to have a side benefit of "creating jobs".

  • Fix the roads. (Score:5, Insightful)

    by snarfies (115214) on Wednesday January 07, 2009 @01:36PM (#26359765) Homepage

    I quote from the report, bolding mine: "An additional $10 billion investment
    in health IT in 1 year would create as many as 212,000 new or retained U.S. jobs for a year."

    Similar wording is on the other two prongs as well. I stopped reading at that point. The report is therefore saying that investing 30 billion could result in ZERO "new" jobs, it will merely allow the retention of existing jobs.

    BTW, what good will your retained job will do you little good when you can't drive to the grocery store to buy food to eat due to the bridge to the store having collapsed? I'd rather see the old-fashioned boring infrastructure fixed/updated before the new-fangled stuff.

  • by ducomputergeek (595742) on Wednesday January 07, 2009 @01:37PM (#26359791)

    ...was more to do with lack of physical infrastructure than anything else. They had the means to produce a lot of food, but a lot of it rotted out in the fields. They didn't have the roads and rail to get it from point A (field) to point B (processing plants) to point C (supermarket shelf).
       

    • by keithjr (1091829) on Wednesday January 07, 2009 @02:39PM (#26360785)
      Well, we solve that problem by paying farmers not to grow food. Thus, no rotting in the fields.
    • Re: (Score:3, Interesting)

      by homer_s (799572)
      was more to do with lack of physical infrastructure than anything else. They had the means to produce a lot of food, but a lot of it rotted out in the fields. They didn't have the roads and rail to get it from point A (field) to point B (processing plants) to point C (supermarket shelf).

      That was the consequence of central planning - something that a lot of people here seem to support.
  • by cliffski (65094) on Wednesday January 07, 2009 @01:45PM (#26359917) Homepage

    Are there one million trained and skilled IT workers in the USA that are currently unemployed?
    If not, this is just a great jobs package for China and India.

    • Re: (Score:3, Insightful)

      by Average (648)

      Demanding US workers in the deal might mean more 'trained and skilled'. Many, many jobs are looking for "3 years this, 5 years that, plus the degree", and uninterested in growing in-house talent. Employers don't do that, since workers aren't loyal anymore, because employers aren't loyal, and so the cycle goes. A demand for US IT workers might mean more companies willing to hire a fresh face and do more training.

  • Bad assumptions (Score:3, Insightful)

    by DaveV1.0 (203135) on Wednesday January 07, 2009 @01:45PM (#26359921) Journal

    They figure only one third of the manufacturing jobs, and only the manufacturing jobs, created by this $10 billion IT stimulus will "leak" out of the country.

    I think they underestimate the number of jobs that will "leak" out of the country in all parts due to H1B visas, outsourcing, and, of course, the off-shoring of IT equipment manufacturing jobs.

  • And the flip side? (Score:5, Insightful)

    by booyabazooka (833351) <ch.martin@gmail.com> on Wednesday January 07, 2009 @01:49PM (#26360003)

    Can we calculate how many jobs are lost as the indirect result of pulling $30 billion out of the economy via taxation?

  • by SuperKendall (25149) on Wednesday January 07, 2009 @01:49PM (#26360021)

    It's the only way automakers will finally have enough motivation to give us our flying cars. This the future, dammit.

  • Digging Holes (Score:5, Insightful)

    by colganc (581174) on Wednesday January 07, 2009 @02:08PM (#26360319)
    Dig more holes faster please. Thanks for taking my hard earned rewards for work and giving it to someone else. I really appreciate it government.
    • Re: (Score:3, Insightful)

      by avandesande (143899)

      It's even worse than that. They are borrowing against you and your children's future production.

  • by DrBuzzo (913503) on Wednesday January 07, 2009 @02:56PM (#26361067) Homepage
    Creating jobs? Puh-lease. You've got to be kidding me. Spending money the government does not have in order to put people on the payroll does not create jobs! Oh sure, for those hired it gives them a job, but at the expense of a NET LOSS of jobs.

    They might not have taught this in history class, but when they tried this the first time it was an epic failure. The "Works Progress Administration" was started in 1935, by 1938 it had hired about four million workers, and unemployment was UP from when it had started.

    This kind of absolute lack of understanding of the most basic of economic concepts and wanting Obama to be Santa Claus is going to kill any chance the US has of bouncing back.

    You know what got us here? Bad lending regulation. The Affordable Housing Credit. Government overspending, extremely bad energy policy etc etc.

    So this is the idea to fix it? Throw more money at the problem? Money that we don't have and which is going to come from a combination of national debt and increasing monetary supply (inflation)

    GREAT! Now we've replaced an overspending right-wing, warmongering zealot with an overspending, economically clueless communist Santa Claus wanna-be.

    Replacing fascist nationalism with communism is not an improvement. Just ask anyone in Poland or the former Eastern Germany. They experienced both and as it turns out, Soviet rule is not that much better than Nazi rule.

Live within your income, even if you have to borrow to do so. -- Josh Billings

Working...