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Government The Almighty Buck News

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

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."
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$30B IT Stimulus Will Create Almost 1 Million Jobs

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  • 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).

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

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

    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.

  • 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:Love it! (Score:2, Interesting)

    by Shakrai ( 717556 ) on Wednesday January 07, 2009 @01:42PM (#26359875) Journal

    My bank is owned by the State, my home is own by the State, my car is owned by the State, my car and home insurance are owned by the State. Now my job can be owned by the State.

    Pretty soon they'll own your health care too. If you thought arguing with the insurance company was bad just wait until you get to argue with a bureaucrat instead. At least you can choose to do business with the insurance company......

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

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

    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 []. 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:3, Interesting)

    by MobyDisk ( 75490 ) on Wednesday January 07, 2009 @01:48PM (#26359983) Homepage

    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.

  • by u38cg ( 607297 ) <> 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?
  • by deKernel ( 65640 ) <.timfbarber. .at.> on Wednesday January 07, 2009 @01:52PM (#26360079)

    No it is not a win-win situation. What you are practicing is Robin Hood economics which teaches class envy. Saying that it is "Ok" to tax the rich more takes away the incentive for most people to advance since most "rich" people are not associated with a corporation: they are just employees of a corporation.

    The system in the U.S. basically incentive-based, and you taking away the incentive because it is going into the pocket of the government and not in the pocket of the person working harder or taking the risk to advance.

  • 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. []

    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="">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: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.
  • Re:Bad economics (Score:3, Interesting)

    by cayenne8 ( 626475 ) on Wednesday January 07, 2009 @02:16PM (#26360437) Homepage Journal
    "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. " 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 is targeted ONLY at taxpayers. They will have more money to spend/save/invest....let that stimulate the economy.

  • Re:Love it! (Score:3, Interesting)

    by Rycross ( 836649 ) on Wednesday January 07, 2009 @02:20PM (#26360487)

    And yet my friend with Crohn's disease wishes he could find a new job but is afraid that he will lose his health insurance. Maybe he is ignorant of the reality, or maybe he's looked into it and its not quite that simple. At the present rate, he is being fucked over, and even with insurance being pushed into debt to merely stay alive and in "good" health.

  • 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?

  • by homer_s ( 799572 ) on Wednesday January 07, 2009 @02:53PM (#26361025)
    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.
  • Re:Bad economics (Score:3, Interesting)

    by tweek ( 18111 ) on Wednesday January 07, 2009 @03:03PM (#26361171) Homepage Journal

    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:Bad economics (Score:3, Interesting)

    by FiloEleven ( 602040 ) on Wednesday January 07, 2009 @03:06PM (#26361227)

    You know what, though? If we pulled our troops out of Iraq and Afghanistan and the 130 other foreign countries where we have bases, and if we stopped spending money on things that blow up or have no other use except in the military, we probably would be able to afford some big tax cuts or infrastructure spending.

    Much of the money that goes to fund our unnecessary wars is money that disappears. The goods that it purchases either do not exist after one use (bombs, bullets, missiles) or are so specialized as to be useless in our society (fighters, bombers, tanks).

    Now, the way things are being run, by a political class that is completely out of touch with reality, such a sensible position is entirely unrealistic. But GP still has a point with a tax vacation - the government certainly does not limit its spending to its intake, and it's already between $10 and $50 trillion in debt depending on who you ask, so what does it matter at this point if we dig the giant hole a little deeper?

  • Re:Bad economics (Score:3, Interesting)

    by idontgno ( 624372 ) on Wednesday January 07, 2009 @03:26PM (#26361599) Journal

    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:Bad economics (Score:3, Interesting)

    by plasmacutter ( 901737 ) on Wednesday January 07, 2009 @03:29PM (#26361645)

    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:3, Interesting)

    by jbolden ( 176878 ) on Wednesday January 07, 2009 @03:30PM (#26361655) Homepage

    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 JesseMcDonald ( 536341 ) on Wednesday January 07, 2009 @04:04PM (#26362159) Homepage

    If you assume one can take home either $250k or $55k for exactly the same work, sure, anyone would choose the $250k job, no questions asked. In general, however, that isn't the case. Higher-paying jobs tend to require more effort and longer hours, produce more stress, depend on specialized skills and connections which must be maintained, etc. The trade-offs a person may be willing to make to earn $1M likely wouldn't remain justified after 75% is cut away by taxes.

    Everyone would like to make more money, but few are willing to pay the price. That price doesn't decrease any just because you tax away most of the incentive. Those on the margin, who would be willing to take on the additional responsibility at the higher salary but not the reduced one, will choose not to advance as a direct result of the tax.

  • by EMB Numbers ( 934125 ) on Wednesday January 07, 2009 @05:53PM (#26363955)

    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 building roads to nowhere. Look up Robert Byrd sometime. []

    Look-up Tennessee Valley Authority and its role in the New Orleans levies. [] []

    Do you want to see what national health care will look like? Look at the Veterans Administration Hospital system.

    How about the War on Poverty? Answer more people impoverished after it in 1980 than before it in 1964.

    Who do you sue when the government screws you over ?

    By definition, the bigger the government, the less free you are.

    Name one government program ever that was an unmitigated success.

  • by Viv ( 54519 ) on Wednesday January 07, 2009 @08:52PM (#26366435)

    The trade-offs a person may be willing to make to earn $1M likely wouldn't remain justified after 75% is cut away by taxes.

    I have found that, generally speaking, the type of person making $1M in the first place is internally motivated more so than externally.

    That is to say, in my experience, they bust their asses just as hard whether they're earning $50k or $750k.

    The fact that they do this is, in large part, why they progressed to make $750k at all.

  • by arth1 ( 260657 ) on Wednesday January 07, 2009 @10:40PM (#26367391) Homepage Journal

    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 appearing, and the remaining two will reach a truce and split the market. You need to make the playing field uneven and punish the big players for small players to ever have a chance. If you're not willing to do that, at least let the government run the show -- they don't have a vested interest in maximizing profits to line the pockets of shareholders.

  • Re:Depends (Score:3, Interesting)

    by Shakrai ( 717556 ) on Wednesday January 07, 2009 @10:54PM (#26367503) Journal

    You lost freedom by not having a government provide healthcare.

    Did I also lose freedom by not having a government provide me with free housing?

    Sometimes you have to give up a freedom to gain another. This isn't all black and white.

    But what if I don't want to give up that freedom? What if I want the freedom to live my life as I see fit with as little governmental interference as possible? Why should the government tell me how to live if I'm doing anything to harm my neighbors?

    Here in New York State, Governor Paterson wants to impose an "obesity tax" on non-diet soft drinks. Why is this a role for Government? Leaving aside the fact that there's nothing wrong with consuming soda in moderation, why should it be the role of the Government to try and legislate behavior? One of the arguments used to justify polices like this is the increased health care costs of obesity. Where does it end? Is the Government going to outlaw or tax skydiving because of the risks involved? Drinking? McDonalds?

  • by xaxa ( 988988 ) on Thursday January 08, 2009 @07:01AM (#26369987)

    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?

No problem is so large it can't be fit in somewhere.