Tech lobbyists: Spend $30 billion in tax dollars, get a million jobs

With President-elect Barack Obama set to argue for urgent, massive government spending, and what is likely to be a $1.2 trillion deficit, lobbyists for technology firms are saying that any stimulus should be directed at, well, technology firms.

A report released Wednesday by the Information Technology and Innovation Foundation says that spending $30 billion in taxpayers' money in 2009 on broadband infrastructure, health IT, and electric grid technologies could create or save approximately 949,000 U.S. jobs. More than half of those jobs, the report claims, would be in small businesses.

Directing stimulus dollars toward IT infrastructure will have a greater impact on jobs and productivity than investment in traditional infrastructure, the report argues, because of the potential to indirectly create new jobs through the growth of new services and applications that depend on IT.

"With the U.S. economy now mired in a deep, and potentially prolonged, recession, increased investment is one of the best tools to stimulate aggregate demand and quickly get American workers back on payrolls," the report says. "Ignoring IT infrastructure investments will do nothing to save U.S. taxpayers' money; instead, it will simply shift the proportion of the economic stimulus money that goes to other areas, some of which, including personal consumption, do not offer many added benefits such as longer-term economic growth or innovation."

This report follows the same general path as a series of other requests for bailouts and spending. The list includes motorhome makers, home builders, governors, the city of Gary, Ind., and even some newspapers. Hustler magazine wants a porn industry bailout. The American Corn Growers Association wants handouts to ethanol plants experiencing "financial difficulty" and new "price supports" for farmers (for some odd reason, the group didn't include any antitrust investigations of Silicon Valley firms in its wish list this time).

The Information Technology and Innovation Foundation didn't say where the money would come from, but the government would presumably borrow it. Some economists support that concept as a way to recover from a recession. Others, like former Bush administration economist Greg Mankiw, say they're skeptical; George Mason economics professor Tyler Cowen says: "It is very hard to find examples of successful fiscal stimulus driving an economic recovery. Ever. This should be a sobering fact."

Nevertheless, ITIF says government spending of $10 billion over one year on broadband networks would create or sustain about 498,000 U.S. jobs for a year, the report estimates. In addition to facilitating a wide variety of services such as telemedicine, online education, and social networking, broadband networks create more high-paying jobs, the report says. IT jobs, according to the ITIF, pay 84 percent more than average jobs.

The report recommends that politicians focus on targeting broadband deployment in unserved areas and expanding network speeds with tax credits for cable and telecom companies.

Some argue that the stalled broadband adoption rates indicate that access is not the problem. A study released by the Pew Research Center in July 2008 showed 62 percent of dial-up users expressed no interest in broadband. The ITIF is also recommending the government encourage increased adoption by allowing broadband-related expenses to qualify for the Lifeline and Linkup programs, through which the government provides discounts to income-eligible individuals for the installation costs of telephone service and for monthly telephone bills.

Spending $10 billion specifically on health IT would create 212,000 new U.S. jobs, the report estimates, and would lead to fewer medical errors and reduced health care costs. The jobs related to health IT spending would come to fruition in computer hardware production, IT services, and among other things, additional job growth in related industries that develop out of the health IT sector.

The report also recommends spending federal funds for "smart grid" infrastructure, or a modernized power grid that uses two-way communication, sensors, and advanced IT to work more efficiently. About 239,000 jobs would be created, the report says, if $10 billion were spent on the smart grid. Beyond employing people directly to build the smart grid, the spending would "spur a host of innovative new products and services from hybrid plug-in electric vehicles to smart appliances to more investment in renewable energy," the report says.

CNET's Declan McCullagh contributed to this report

[billmosby]

Also invest some in a couple of wars, as that's been reported to have gotten us out of the great depression. Oh, wait....

[solitare_pax]

They could generate twice as many jobs if they invest exclusively in Windows Vista - that's one job for a person doing the actual work, and another job for someone working to keep Vista running - and of course, work to keep the lobbyists employed.

[hutwarmer]

949,000 jobs created. 30 billion in US taxpayer dollars.

It looks as if India is going to have another stellar year.

[tech_crazy]

Then you should seriously consider moving there.

[hutwarmer]

I would but your mother doesn't like the hot weather, ******.

[marvin25]

There is no justification for the Government to spend on the Internet. Broadband is being put in faster than the tier one providers can keep up with the new demand. Furthermore this new broadband is going in without Government help plus if you take a three year contract the installation is free. If the Government gave money for Internet it will be stated that it is going to stockholders of the companies. Why can one ISP put in broadband at a fast rate in low density areas without Government help while in high density areas they need help. If the Government gave help from our elective officials would be looking for a new job at the next election. The last thing to remember is that the tier one providers can't keep up with the speed of one ISP putting requirement on the Internet and has killed net neutrality completely. If the last mile providers decide to do it then the content providers will tell them to get lost and we don't need the customers.as we are having a hard time in meeting the needs of the customers of one ISP period. If the Government gave money to them then would be a question why is ISP doing without Government help which is true broadband. They are also putting in a first class system and giving real customer service and will correct the problem if you show they have a problem. The bottom line should go in the garbage pall completely as there is a new Internet being put into place and not the ones people talk about

[ppgreat]

The trouble with such a proposition is that it basically throws money into the pot for bodies in a field where increases in efficiencies lower the count and/or need for full time employees.

While it mentions 'innovations' as a result of such an investment, it appears as much thought went into the study as went into the reasons for the financial bailout.

[scdecade]

If politicians, who will promise anything to get elected and stay in office, could create good jobs by simple decree or by spending money wouldn't we all have great jobs with high salaries by now? Why are they withholding this from the rest of us? If spending $30 billion creates 1 million jobs then why not spend $30 trillion and create 1 billion new jobs? Unless this is all just depravity.

[protagonistic]

So if my math is correct they want to spend roughly $30,000 for each job created. Wow, what a bargain.

[Endbringer]

I'd like to know where in the Constitution it gives the government authority to pick the winners and losers in the market place. The government's job is not to create jobs. Its job is to make sure there is the opportunity to have a job, but not give it nor create it. We've lost this mentality and we will soon be so dependent upon our government that we will cease to exist as a free society.

And is it "fair" to use the police power of government to take my property (money) and give it to an industry that either is working on its own fine or cannot make it on its own?

[sanenazok]

Most of the things that the government does are not in the Constitution, nor should they have to be. By now, government interaction with the market is so strong, there's no going back.

[lyntone]

Until we undo the trade deals that Bill Clinton gave us, all is lost!
He gave us NARFTA and "most favored nation" status with Communist China, there went the good paying middle class factory jobs!
Of course Bill Clinton sold out the very people who elected him and now he is a multi millionaire!
You can't buy a new home or a new car on a Walmart wage!
Walmart had the most to gain from these trade deals, and Hillary served on the Walmart Board.
Connect the dots!

[LuvThatCO2]

I love this 'save jobs' meme going on right now among leftist politicians/pundits. You cant definatively calculate how many jobs are 'saved' in this manner, which is perfect for libs because they can claim they saved the jobs and no one can 'prove' it not true. Also, spending comes from tax revenue, and higher taxes cost jobs as people shift their spending from buying thngs (TVs, Cars, etc - all of which require people with jobs to make) to giving the money to government. Jobs will be lost either now as people pay more if taxes are raised, or in the future as people pay more in taxes *plus* more for the interest on the money government borrowed in the past.

If they REALLY want us to get out of this recession and avoid a depression - and I'm not so sure thats what the politicians want since this 'crisis' gives them the ability to seize more power over people's lives - then what the govt should definately NOT do is repeat all the same mistakes Hoover and FDR did which turned a run of the mill recession into the 'Great Depression'. So far it IS repeating them.

[ajbright]

I've long argued that the money spent on the Iraq war could have overhauled the broadband infrastructure in the US.

What people have difficulty grasping here is that it isn't only IT jobs that get created. Cable doesn't lay itself, new buildings aren't made out of computers, the metals, plastics and other materials that are needed to create a new fiber network do not come from Google or Microsoft.

Besides the enormous number of non-IT related jobs created by something like a $1 billion per state investment in broadband infrastructure, besides the potential of hundreds of new entrepreneurs taking advantage of the new technology, faster internet speeds and therefore becoming yet another source of job creation, the knock on effect of creating hundreds of thousands of high paying tech jobs has nothing but good repercussions in any community that they exist.

Everything from the construction of new homes, remodeling of existing and refurnishing of both to things like buying groceries and eating out. Watching movies, gym memberships, baseball camps and tourism. All of them would be affected by creation of large numbers of high paying jobs, no matter what industry they come from.

But with the investment made in communications infrastructure, the US would then have a broadband network that can compete with countries like Japan and South Korea. If you like that the US has been a leader in innovation from everything like IT to Aerospace, this sort of thing is important.

It is important for our future that we build the best planes, we build the best computers, we build the best ships and cars. And while high speed broadband is hardly the cure-all for such things, it does have an indirect effect on many.