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$30B IT Stimulus Will Create Almost 1 Million Jobs

CmdrTaco posted more than 5 years ago | from the i'm-sure-they-won't-filter-anything-either dept.

Government 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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She did what?! Oh NO! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#26359511)

She ran off with another guy,
She didn't even say goodbye,
She'll never find a love like mine, or bigger!

he took the T.V. and the stereo,
She wrote a check for all my dough,
But to top it off, she ran off...with a NIGGER!

It really came as no surprise,
I guess I saw it in her eyes,
I knew that it would happen, and it did!

My pappy said, "I told you so",
She broke my heart and now I know,
I never shoulda married that black-little-bitch anyway!

Bad economics (4, Insightful)

Joey Vegetables (686525) | more than 5 years ago | (#26359519)

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:Bad economics (3, Insightful)

CTalkobt (81900) | more than 5 years ago | (#26359619)

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, somewhere in the system, unless it's been exported overseas. (joy)

Re:Bad economics (3, Informative)

Joey Vegetables (686525) | more than 5 years ago | (#26359653)

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 (3, Informative)

CTalkobt (81900) | more than 5 years ago | (#26359715)

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 (5, Insightful)

mc6809e (214243) | more than 5 years ago | (#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 (2)

larry bagina (561269) | more than 5 years ago | (#26359813)

if I borrow $100 and burn it, I've just multiplied it by zero! If I borrow $500,000 to buy a house, then default on the loan when the real estate market shits itself, I (or, more accurately, the bank) just multiplied your money .5.

Re:Bad economics (3, Insightful)

MickLinux (579158) | more than 5 years ago | (#26359869)

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.

Re:Bad economics (0)

garett_spencley (193892) | more than 5 years ago | (#26359929)

Yes the money is still in the system, however, you have not CREATED any jobs. You have only relocated jobs.

The problem with government "creating" jobs this way (aside from the fact that it's misleading and a good way to get votes by promising an ignorant public jobs that will not actually be created, just moved from elsewhere) is that government does not risk with it's own money. If you take money out of private enterprise you can pretty much guarantee that the money will not be used efficiently. Thus more jobs get "created" by leaving matters up to the free market rather than redistributing it for the government's perceived benefits.

If a small business owner fails he loses everything he fronted to create his business. There is very powerful incentive to succeed. If government fails they just pass on the blame to everything they possibly can and move on. The tax payers are out money that would have been used much more responsibly in the open market.

Government usually follows the path of "creating jobs" by "investing in infrastructure" because it's a good way to get the public to STFU. Most people are short-sighted. They will see the jobs as a results of the government spending. They see the metaphorical bridge that was built. They see the wages. What they don't see are all the jobs and wages that had to be taken away in the form of taxes to "create" those things.

There is no creation of jobs by government. Government is not a wealth generator. They are not sitting on some pile of magical capital that they can tap into. Every government dollar spent is capital taken out of the economy in the form of taxes. Every government job created is a job taken from somewhere else. Like the GP said, there is no net surplus of jobs as a result of government spending.

See Economics in 1 lesson - Chapter 4 - Public Works Mean Taxes [jim.com] for more info.

Re:Bad economics (5, Interesting)

Flavio (12072) | more than 5 years ago | (#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 [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 (2, Insightful)

CannonballHead (842625) | more than 5 years ago | (#26359991)

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" but it's not creating a new income, it's taking it from someone else's income. Or many someone else's.

Either way, it's significantly different from starting a business and "creating jobs" that way. Now, if they do a stimulus where the money comes from other canceled projects, that might be nicer. In other words, more efficiently use existing revenue, not try to take more in an effort to give more.

Which reminds me of one other point. I take $100 from everyone. I pay the people that I had to hire to take the $100, and the huge organization that is now required to run this new operation. By the time I actually get around to paying the "new hired" people, how much of that $100-per-person do I have left? I've paid a bunch of superfluous people. In other words, I'm taking money, paying some un-necessary people, and finally getting around to paying someone else with it. The taxpayer is losing money on this deal while making more bureaucratic jobs. That's ... stupid.

"Exported" (1)

phorm (591458) | more than 5 years ago | (#26360119)

unless it's been exported overseas.

This is actually a good point. Is there anything to ensure that this clause won't simply be used to foreign labor VS creating (reasonable wage) domestic jobs? I hardly think it would help the economy as much or create a lot of local employment opportunities if it were used for more outsourcing...

Re:Bad economics (5, Insightful)

DragonWriter (970822) | more than 5 years ago | (#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.

Re:Bad economics (2)

zappepcs (820751) | more than 5 years ago | (#26359837)

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.

Mod parent up. (1, Insightful)

khasim (1285) | more than 5 years ago | (#26359963)

Congratulations. Very nicely stated.

And the way I see it, it IS all about using the taxes gathered by our government (or money borrowed by our government) to improve OUR economy in the most effective and efficient fashion.

It's very simple. If you reduce the taxes of a billionaire by a million dollars, he will spend it differently than if that million dollars was spread amongst people making $20,000 a year.

Re:Bad economics (0)

Anonymous Coward | more than 5 years ago | (#26359687)

Wrong. The mess we are in right now is a result of millions of people left unproductive because others are hoarding their cash. The point of a stimulus is to take that cash and use it to get those millions of adults productive again.

Re:Bad economics (2, Insightful)

Shakrai (717556) | more than 5 years ago | (#26359805)

The point of a stimulus is to take that cash from the people who are currently holding it and use it to try and get those millions of adults productive again.

Fixed that for you.

Re:Bad economics (0)

Anonymous Coward | more than 5 years ago | (#26359821)

fucking democrats need to stop looking for handouts.

Re:Bad economics (0)

Anonymous Coward | more than 5 years ago | (#26359993)

As opposed to Republics looking for Billions in handouts to save say, the American Auto Industry.

Re:Bad economics (2, Insightful)

plasmacutter (901737) | more than 5 years ago | (#26360071)

Wrong. The mess we are in right now is a result of millions of people left unproductive because others are hoarding their cash. The point of a stimulus is to take that cash and use it to get those millions of adults productive again.

BINGO!

This is what most reaganites simply fail to grasp, but people who actually own their own businesses understand.

If you have a corporation, you use that corporation as a tax shelter. The higher the tax on your income, the less you will claim as an official salary from your company. That money stays WITHIN the company, and must be used in some way to avoid loss to taxes, which means investment (more credit for everyone), higher wages (more consumption->GROWTH), or more jobs (again, Growth).

What's more, those taxes taken from what they do claim don't affect their lifestyle, and the plan is to produce subsidized infrastructure.. for businesses! --They get all their tax money back indirectly.

I don't know of any competent business owner who would have a problem with the proposed policies.

By pushing down taxes on INCOME for the wealthy, reaganomics does nothing for the business OWNER.

Now, on the other hand. the executives who run but don't OWN large companies benefit a lot from these policies. Note how these types are the same types who create scandals like enron. Their motivation is not the health and well being of a company, but to siphon off as much in salary and bonuses as they can then cut loose before the collapse.

Obviously it's hard for those types to get rich if taxes on income over..say.. 1 million a year are in the 80%+ bracket.

Re:Bad economics (1)

ChipR (1424) | more than 5 years ago | (#26359787)

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.

This sounds a lot like "trickle-down economics". That is, give rich people money and they'll build factories and stores which will create new jobs. Fact is, most taxpayers don't create jobs, they just have them. Or not, in increasing numbers.

I do agree that shoveling taxpayer money directly into the economy hasn't worked very well in the past, not since the 1930s at least, and we have little reason to think it will work now. So what do you suggest we do? Just let things work themselves out? Let the Invisible Hand of the Market make everything better?

Can I ask, do you have a job right now? I don't. It got sent to Bangalore. I suspect our answers to the above questions would be quite different.

On a side note, I hope the poor bastard in India who got my job isn't hating it as much as I did near the end. :)

Re:Bad economics (0)

Anonymous Coward | more than 5 years ago | (#26359829)

Simple minds don't quite grasp the difference between macro and micro economics. When a stock or real estate market crashes billions of dollars of wealth are destroyed not transferred to somewhere else. Similarly when a market rises wealth is created. The same is true for government spending. Generally speaking governments can create wealth by spending, even by deficit spending. The money is not taken from tax payers, this is not a zero sum game. If you prefer call it printing money, its not much different than digging up gold from the ground.

Re:Bad economics (3, Interesting)

LordKronos (470910) | more than 5 years ago | (#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. (4, Interesting)

plasmacutter (901737) | more than 5 years ago | (#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:No, good economics. (2, Interesting)

deKernel (65640) | more than 5 years ago | (#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.

Re:Bad economics (4, Informative)

Skreems (598317) | more than 5 years ago | (#26359919)

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:Bad economics (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#26359947)

because the Internet in general and Slashdot in particular is crawling with Libertarian kooks.

Re:Bad economics (2, Interesting)

MobyDisk (75490) | more than 5 years ago | (#26359983)

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.

It can't all be digital (4, Insightful)

Ristoril (60165) | more than 5 years ago | (#26359525)

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

Love it! (0)

Anonymous Coward | more than 5 years ago | (#26359527)

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.

Re:Love it! (1, Interesting)

Shakrai (717556) | more than 5 years ago | (#26359875)

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:Love it! (4, Insightful)

thermian (1267986) | more than 5 years ago | (#26360013)

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......

Don't talk crap. I live in a country where the government controls the health service, and we have national health insurance that everyone pays.
You know what? It may not always be great, but its always there whenever you need it in an emergency, you can go for checkups without being afraid of your insurance premium going up, and you don't get stuck in a job you hate because you can't get new health insurance for a disease or illness you have developed.

Like I said, it isn't perfect, but compared to your system where its possible to have no health cover at all, its good enough.

Re:Love it! (1)

thrillseeker (518224) | more than 5 years ago | (#26359889)

cradle to grave, brother.

Not likely (-1, Troll)

Anonymous Coward | more than 5 years ago | (#26359533)

You seem to have some goatse [goatse.fr] on your face.

In other news, niggers.

Recession makes things easier! (0)

Anonymous Coward | more than 5 years ago | (#26359551)

but then it'd be harder for my company to find good IT people! I really love being able to put an ad out and get 100 qualified candidates applying!

High numbers (1)

east coast (590680) | more than 5 years ago | (#26359555)

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 (0)

Anonymous Coward | more than 5 years ago | (#26359723)

And remember folks: That 30k a year has to account for EVERYTHING. The administration of the program, the social security/state/federal taxes taken out of the paycheck, etc. Actual take home pay would probably be closer to 20K a year, or roughly $10/hour.

Re:High numbers (3, Insightful)

moderatorrater (1095745) | more than 5 years ago | (#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 (4, Insightful)

L0rdJedi (65690) | more than 5 years ago | (#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.

Re:High numbers (1)

DragonWriter (970822) | more than 5 years ago | (#26359899)

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.

Administrative costs create jobs, too; also, spending can create jobs with a greater total salary than the amount of spending, since each dollar can be spent more than once. The stimulative effect in the domestic economy of spending isn't just a product of the amount of money spent, but of the velocity of money in the domestic economy (how many times each dollar is spent in the domestic economy) resulting from that spending.

do the math. (1)

hypergreatthing (254983) | more than 5 years ago | (#26359557)

30k a year for an IT job? I'll pass.

Probably less than that. They would create a IT czar, give him all the money, then hire indians to do the IT work at 2$ an hour pay rate.

Re:do the math. (1)

geekoid (135745) | more than 5 years ago | (#26359755)

Incorrect interpetation.

It's nt just directkly IT jobs, it's all the support people.

You mkae 70k.
You are putting most of that money into the economy. The goods you buy support industries that hire people that make much less then you, and things that are used briefly. Like getting a pipe fixed. That plumber may make 100K, but you only pay him for the hour he was there.

Re:do the math. (3, Insightful)

Average (648) | more than 5 years ago | (#26359911)

With the layoffs out there there are *plenty* of IT people who will work for $30k or $35k if you won't. Maybe not in California or New York. But, if work could be outsourced (badly) to India, it can be outsourced (with better oversight) to Sioux City or Tuscaloosa. $35k, plus a part-time-working spouse, means you can afford a $100k house (which is perfectly believable in most of the country), pay off reasonable student loans, and eat. People will take that. Plus, you're working indoors in a nice office, not busting your back in the cold.

Yeah, it's Walmart wages. There are people lining up for those jobs, too.

Not "punywage" (3, Insightful)

Stile 65 (722451) | more than 5 years ago | (#26359563)

"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.

Re:Not "punywage" (1)

thepacketmaster (574632) | more than 5 years ago | (#26359733)

Doing the math of dividing $30 billion by 1 million would mean an average of $30,000 per employee. However, I don't think that $30 billion would simply be going to salaries. Obviously hardware, software and services would be involved, since this is about building a new infrastructure. Finally, just because this new infrastructure is being built by stimulus money does not mean that the services it provides would be free, so the incoming revenue would go towards the salaries. So from the brief description of this stimulus I think it's impossible to tell what the wages would be.

Ronald Regan is on the phone... (5, Interesting)

SuperBanana (662181) | more than 5 years ago | (#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.

Or... (0, Troll)

smooth wombat (796938) | more than 5 years ago | (#26359567)

You could give each citizen $1 million and let things take their course. That would cost you roughly $350 million compared to the $1.5 trillion that has already been spent and the proposed $1 trillion the incoming administration wants to spend.

I know, it's a simple solution with a fairly inexpensive price tag which means no elected official will ever consider it.

Re:Or... (3, Informative)

Stile 65 (722451) | more than 5 years ago | (#26359605)

You mean $350 trillion.

350 million people times $1 million per person = $350 trillion.

Re:Or... (1)

Samschnooks (1415697) | more than 5 years ago | (#26360117)

Tomato..tomato..what's a multiplier of a million? This is government money we're talking here.

Re:Or... (1)

ducomputergeek (595742) | more than 5 years ago | (#26359625)

Giving 350 people $1M each = $350M. Now you could give 350M people $1 each, for $350m but that won't even buy something on the value menu at a fast food joint after sales taxes.

Re:Or... (1)

JeepFanatic (993244) | more than 5 years ago | (#26359647)

Wouldn't 300+ million Americans each receiving $1 million be a bit more than $350 million? Like 6 zeros more?

Re:Or... (0)

Anonymous Coward | more than 5 years ago | (#26359649)

ouch. count your zeroes again...

Re:Or... (0)

Anonymous Coward | more than 5 years ago | (#26359657)

1 million each is $350 trillion. not good for inflation i expect.

Re:Or... (1)

qwertphobia (825473) | more than 5 years ago | (#26359669)

In what country is there a total of roughly 350 citizens?

Re:Or... (1)

Shakrai (717556) | more than 5 years ago | (#26359873)

Well the Vatican [cia.gov] has a population of 824 according to the World Factbook. Do they need a bailout?

Re:Or... (-1, Redundant)

Anonymous Coward | more than 5 years ago | (#26359673)

Ah the curse of our poor mathematical educational system strikes again. $1 million times 350 million people is $350 trillion NOT $350 million.

your math is a bit screwy (1)

Shivetya (243324) | more than 5 years ago | (#26359709)

If they really want to stimulate the economy they could just have the proposed two month tax holiday, as in no income taxes for two months.

However this doesn't work because

a. They don't want people who actually pay taxes to realize just how much they are paying.

b. People who don't pay taxes won't like not getting money and they are the most reliable voting block money can buy

c. It goes against the whole class warfare construct that politicians work so hard to keep

The simple fact is that the the word stimulus needs to be replaced with "payoff" as all we have seen is payoff to the politically connected. If anything this has become the biggest transfer of American's money transferred to the political class in history.

Letting the American taxpayer keep their money, in the form of reduced income taxes and reduce capital gains taxes, would do more to jump start the economy than any government attempt otherwise. Remember, when the government spends the money they do it to reward those they like and force others to change to become more liked, no necessarily better.

Re:your math is a bit screwy (1)

Jeff Hornby (211519) | more than 5 years ago | (#26360097)

Because having a bunch of people buying televisions made in China, cars made in Japan and taking vacations in Mexico is going to help the American economy how?

In the mean time, Social Security payments will also have to stop. All government employees will have to take a two month unpaid leave. In fact all government spending will have to stop. That would probably have some effect on the economy but I can't figure what it would be.

Re:Or... (1)

Joey Vegetables (686525) | more than 5 years ago | (#26359735)

And from whom, exactly, would you get the $1 million per person?

Re:Or... (1)

oodaloop (1229816) | more than 5 years ago | (#26359967)

We simply tax each person...uh...one million...uh, how about we build a giant wooden badger.

Re:Or... (1)

thrillseeker (518224) | more than 5 years ago | (#26360055)

From the next 10 generations.

We (well, our government financial wizards anyway) obviously know better how to spend future money than we do - look at who we elect and what they've done so far - since spending has gotten us collectively this deep in debt, then more spending will obviously get us out.

Oddly, this approach doesn't seem to work for all my credit cards.

Re:Or... (2, Insightful)

El Torico (732160) | more than 5 years ago | (#26359737)

Simple solutions don't create new Agencies and don't give bureaucrats more power and more money. The problem occurred because "civil servants" failed to do their jobs. The best way to restore faith in the markets would be to quickly convict those that committed these frauds, seize their assets, and ban them and the bureaucrats that failed to do their jobs from ever holding a position of public trust, in corporate management, or in finance.

Re:Or... (1)

geekoid (135745) | more than 5 years ago | (#26359789)

Your math = Epic Fail.

Hint: there are more then 350 people in the US.

Re:Or... (1)

pete-classic (75983) | more than 5 years ago | (#26359927)

There was an email going around a while ago with this exact mistake.

You can always tell folks who never took any hard Science; they can't reliably divide in scientific notation.

-Peter

Re:Or... (0)

Anonymous Coward | more than 5 years ago | (#26359893)

Not sure if you were joking or not, but $1 million per 300 million citizens is $300 trillion. Maybe you meant $1 per citizen?

Re:Or... (0)

Anonymous Coward | more than 5 years ago | (#26359897)

Is it funny because the math is so wrong?

obviously that is just the present value (1)

NotQuiteReal (608241) | more than 5 years ago | (#26360051)

You don't give everyone a million dollars right now, that would cost too much. But for $350 million, you might be able to set up an annuity that would pay 350 million people 10 cents a year, for 10 million years.

I have Animal Farm on the brain (1)

cvd6262 (180823) | more than 5 years ago | (#26359589)

All I can envision is a digital windmill-with-servos that will cut our workweek in half. Of course, when an earthquake or tornado interferes with the creation of this new infrastructure, we will blame the terrorists and simply work harder to complete it on time. Once done, it the government will lease it to providers who will sell access to those who built it.

And pigs will walk on their hind legs with whips in their trotters.

I've got to read something more upbeat.

Re:I have Animal Farm on the brain (2, Funny)

AioKits (1235070) | more than 5 years ago | (#26359611)

Not to worry my friend *sips koolaid* Four legs good, two legs better.

Re:That might not be a bad thing. (1)

Pax Romana (1444993) | more than 5 years ago | (#26359891)

One of the main reasons we got out of the last depression was because of the switch to more jobs with the onset of World War II. In some ways, a place to lay our blame might not be such a bad thing. If we have a place to refocus our attention, it would be a great boost for our economy. I'm not saying I want something bad to happen, but such a catastrophe might not be as catastrophic as you may think.

A million jobs (2, Funny)

Profane MuthaFucka (574406) | more than 5 years ago | (#26359595)

in INDIA. That's the part they left out.

Re:A million jobs (1)

4D6963 (933028) | more than 5 years ago | (#26359739)

Yeah, because broadband is really all about consumers calling the hotline in India, not installing equipment or nothing.

What's best in the long run. (1)

Samschnooks (1415697) | more than 5 years ago | (#26359971)

What's better for the Taxpayer, which is all of us, in the long run: have jobs here in the US to put in the infrastructure at a higher cost than having the lowest cost bidder do it - even if it is the Indians; or saving money and having more done for the same cost and larger pay-offs down the road? Wouldn't having the most done for the cheapest price be the best all around? I don't know myself - I'm not that smart.

Speaking as someone who lost his job to Indians and who wants to slap the Laffing shit out of every economist he meets.

Flamebait? (1)

dedazo (737510) | more than 5 years ago | (#26360123)

I don't understand why this was modded down. It's inevitable that US corporations will find exciting new ways to outsource work to countries like India, China and Eastern Europe. That way they can claim a $0.03 per-share gain in their balance sheets and things like that.

For example, $BIG_CORP will say "we are saving money by contracting with IBM for all our IT support needs, weee!", and most people think that means the money and jobs stay in the US, when that really means IBM Global Services, which in turn really means IBM India. It's been done many times before. Even if the jobs are in the US, they're usually staffed by Indians on L2 visas.

I've stopped caring about how the US spends taxpayer money since I don't pay taxes there anymore, but any government investment like this should be accompanied by a strong oversight to avoid loopholes and waste. In any industry. Look at the appalling lack of accountability we're seeing now with the bailout.

But who is hurting more? (1)

Uchiha (811374) | more than 5 years ago | (#26359615)

I know we are just looking out for the Country, but who is hurting more, physical or digital? Oh and aren't most of those bridges and-what-have-you, state run anyway? So the state who would the bail-out money go to? Texas?

Gubmint jobs (1)

ChipR (1424) | more than 5 years ago | (#26359665)

Bias alert: Huge fan of Obama's promises. Skeptical about his ability to implement them through the filter of the ponderous leviathan that is the US government.

As a US programmer whose job was recently sent overseas, I'd love to have some new opportunities present themselves. But years of evidence make me worry that a government job would be like government cheese: not of the highest quality.

Nevertheless, I remain optimistic! (You may all now line up to call me a fool.)

That comes to: (0)

Anonymous Coward | more than 5 years ago | (#26359667)

What a $30b IT stimulus plan really means:

Tons of cash for the big outsource firms like IBM who will ultimately farm out the work overseas.

no thanks

Bad assumptions (4, Insightful)

StikyPad (445176) | more than 5 years ago | (#26359697)

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.

Who Pays? (1)

TonyXL (33244) | more than 5 years ago | (#26359711)

Who Pays?

brokenwindowfallacy??? (4, Informative)

4D6963 (933028) | more than 5 years ago | (#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.

Re:brokenwindowfallacy??? (4, Interesting)

u38cg (607297) | more than 5 years ago | (#26360033)

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:brokenwindowfallacy??? (2, Insightful)

nine-times (778537) | more than 5 years ago | (#26360073)

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 infrastructure is a good counter-example to the broken window fallacy. Value is added into the system and good infrastructure actually improves economic conditions. It encourages investment, stabilizes operations, and allows businesses to operate more efficiently.

That's not to say we should build useless infrastructure for the sake of economic activity. The "bridge to nowhere" wouldn't provide value, and therefore it could be argued that it's an example of the broken-window fallacy. But ubiquitous broadband Internet (with speeds on the scale of FiOS, not just DSL), is something we need in order to stay economically competitive with the rest of the world.

Re:brokenwindowfallacy??? (1)

thrillseeker (518224) | more than 5 years ago | (#26360099)

It's an investment when the person voluntarily providing the money decides where he wants to spend it - it's legalized theft otherwise.

MIcrosoft restructuring (1)

goombah99 (560566) | more than 5 years ago | (#26359741)

Microsoft is supposedly about to layoff 17% of it's worldwide workforce despite cash reserves. I wonder is perhaps they are positioning themselves to be more nimble in the new hire arena so as to profit from this transient IT burst.

After this has to be a burst. The whole point is for this kind of infra structure investment to lead to longer term efficiencies and ultimatle less redundant and incompatible IT make work. The only way it can actually lead to greater IT in the long run is if it somehow creates new opportunities in Health care that make more investment in health care a worthwhile thing. Right now, I think the evidence is that health care is saturated were paying more than socialized medicine countries but outcomes are not in aggregate better, they are only better in the individual but insubstantially few cases.

So this kind of investment if it's valuable should lead to more centralized and pre-packaged software solution and not to more IT jobs in the long run.

It will be like all the linesmen they need to put up the next generation grid. eventually the grid will be up and the extra help, particularly the experts in executing it, not needed. They will just need the maytag repairman and the telephone sanitizers.

After all who is actually ready to roll out IT systems that companies are willing to bet on? Microsoft. Sure the open source community has better solutions in the long run. But to roll anything out, no matter how clever, you need a bussiness model to back it. That's why haliburton and Bechtel and boeing keep getting the big systems integrator contracts. Not because they are so good at what they do. but because they have the scalable bussiness model to ramp up fast.

Microsoft thus needs a weight loss program. it's lethargic. But it is big and can do essentially every task and companies trust it even while IT folks grumble.

SO maybe this is their big comeback.

Fix the roads. (5, Insightful)

snarfies (115214) | more than 5 years ago | (#26359765)

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.

Re:Fix the roads. (1)

DrWho520 (655973) | more than 5 years ago | (#26359937)

If you invest in health IT, it will help all those people going to the hospital who were driving/walking on the bridge when it collapsed beneath them.

Why the Soviet Union Collapsed... (4, Interesting)

ducomputergeek (595742) | more than 5 years ago | (#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:Why the Soviet Union Collapsed... (0)

Anonymous Coward | more than 5 years ago | (#26360089)

Not just that, the green collar jobs and the IT kind of jobs take substantially more planning to do well and do correctly. It's not like there are blueprints everybody agrees on to just retool the electrical grid or a chosen solution for the last mile internet problems that still exist. When you build bridges and roads, we know how to do that and we know which ones need repair right now.

The US Already Imports Tech Workers (1)

mb12036 (516109) | more than 5 years ago | (#26359793)

Who will take all the jobs that are created? Bridges and Roads can employ more American workers because they require trades and unskilled labor.

where are the workers? (3, Insightful)

cliffski (65094) | more than 5 years ago | (#26359917)

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.

Bad assumptions (2, Insightful)

DaveV1.0 (203135) | more than 5 years ago | (#26359921)

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.

misleading title (1)

Wanado (908085) | more than 5 years ago | (#26359945)

Should read A $30B IT Stimulus Could Create Almost 1 Million Jobs.

Then I wouldn't have been lead to believe there was news here about a real stimulus package.

Print and borrow. Destroy savings. (1, Insightful)

Anonymous Coward | more than 5 years ago | (#26359949)

The theory here is that jobs and things that people value can be created by printing money and taking more loans. It didn't work so well for Rome, Germany, Argentina, and Zimbabwe.

And the flip side? (5, Insightful)

booyabazooka (833351) | more than 5 years ago | (#26360003)

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

I'm all for abandoning roads and bridges (4, Funny)

SuperKendall (25149) | more than 5 years ago | (#26360021)

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

But where do the jobs get created in? (0, Redundant)

140Mandak262Jamuna (970587) | more than 5 years ago | (#26360039)

May be IT investment creates more jobs than physical infrastructure investment. But if the jobs are created in India, are we (Americans) really better off?

on the other hand... (1)

zr (19885) | more than 5 years ago | (#26360047)

while that may be true, you still have to drive/walk so physical infrastructure is important if you care about bridges not falling from under your feet.

How many of these jobs will be outsourced? (1)

Schuthrax (682718) | more than 5 years ago | (#26360049)

Or spent on companies that are good old USA companies, with tax shelters in Ireland and 99% outsourcing? But hey, they're American companies!

That would require... (0)

Anonymous Coward | more than 5 years ago | (#26360057)

This would clearly require people to give up their valuable contracts with IT companies in India.

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