Smart grid, broadband appear in $825 billion 'stimulus' plan
House Democrats on Thursday revealed details of a massive legislative effort they said would inject new life into a flagging U.S. economy, thanks to a combination of $825 billion in tax cuts and new government spending.
The sprawling, 258-page draft bill includes $32 billion in electric power upgrades, sometimes known as "smart grid" technology, $6 billion for expanded broadband Internet access, and $20 billion for health care information technology.
"The economy is in a crisis not seen since the Great Depression," said letter published Thursday by Rep. David Obey, a Wisconsin Democrat who heads the House Appropriations Committee. "Credit is frozen, consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 (million) to 5 million in the next year."
The House leadership has said it would like to hold a floor vote on the package by January 28 and send it to President-elect Barack Obama by mid-February. One potential obstacle is negotiations with the Senate, which is likely to have its own priorities.
The energy-related sections of what is tentatively called the American Recovery and Reinvestment Act of 2009 include $11 billion for research and development related to the "Smart Grid Investment Program;" $8 billion in loans guarantees for renewable energy generation; $2 billion for loan guarantees to high-capacity battery makers; and $200 million for a grant program for electric vehicles.
Some other portions, excerpted from the summary prepared by Rep. Obey's office:
* Energy Efficiency and Renewable Energy Research: $2 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities to foster energy independence, reduce carbon emissions, and cut utility bills. Funds are awarded on a competitive basis to universities, companies, and national laboratories.
* Home Weatherization: $6.2 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
* Cleaning Fossil Energy: $2.4 billion for carbon capture and sequestration technology demonstration projects. This funding will provide valuable information necessary to reduce the amount of carbon dioxide emitted into the atmosphere from industrial facilities and fossil fuel power plants.
* Alternative Buses and Trucks: $400 million to help state and local governments purchase efficient alternative fuel vehicles to reduce fuel costs and carbon emissions.
In terms of wireless and broadband, the legislation would require the National Telecommunications and Information Administration (part of the Commerce Department) to create a grant program for "nonrecurring" costs of broadband deployment in rural, suburban, and urban areas--meaning, basically, anywhere in the country. NTIA is supposed to prioritize "unserved" and "underserved" areas, two terms that have no actual meaning until the Federal Communications Commission eventually comes up with one.
State governments may apply for grants by submitting reports listing which of their areas have unserved wireless voice, underserved "advanced wireless broadband," unserved basic broadband, and underserved "advanced broadband service." NTIA will dole out separate funds for wireless deployment and broadband deployment.
"Advanced broadband service" is defined as at least 45 megabits per second downstream and 15 megabits per second upstream; "advanced wireless broadband" is 3 mb/sec downstream and 1 mb/sec upstream.
Whether this so-called stimulus will have any positive effect on the economy is uncertain, though, because the U.S. Treasury will pay for it by running up the national debt significantly and future generations of taxpayers will be expected to pay it back.
The bailout's cost so far has ballooned to $8.5 trillion, not counting the $5.2 trillion in Fannie and Freddie guarantees, although the Treasury should eventually recover some or even much of this amount. If deficit spending were a sure way to stimulate the economy, the Treasury could simply borrow, say, $100 trillion -- and the economic malaise of the last few months would evaporate.
A recent article by Greg Mankiw, a professor of economics at Harvard and former adviser to President Bush, surveys recent research and concludes that each dollar of government spending increases economic activity by only 1.4 dollars, while (according to Obama's top economics adviser) a dollar of tax cuts raises the GDP by about $3. And Tyler Cowen of George Mason University suggests that "we are being asked to spend (untold) hundreds of billion dollars" even though the evidence it will have a positive impact "is inconclusive."
Declan McCullagh, CNET News' chief political correspondent, chronicles the intersection of politics and technology. He has covered politics, technology, and Washington, D.C., for more than a decade, which has turned him into an iconoclast and a skeptic of anyone who says, "We oughta have a new federal law against this." E-mail Declan. 
Give me a break.
The paper says: "The resulting estimates indicate that tax increases are highly contractionary" and includes that ratio. (http://www.econ.berkeley.edu/~cromer/RomerDraft307.pdf) If you increase taxes by one percent of GDP, say $135 billion annually, the annual cost in terms of lowered GDP soon becomes $400 billion annually.
So, did the Bush tax cuts raise GDP by three times the amount of the cuts?
If this is really the case, why not cut taxes to 0?
Who really needs more bandwidth than that?
The benefits would be:
1. Unserved users (both indoor & outdoor) are served.
2. Lower deployment cost (no underground cables, etc.).
3. Accelerated development & deployment of these wireless broadband technologies (which are exportable).
4. Development of applications that can take advantage of this infrastructure (also exportable).
Users win and the tech companies are strengthened for global competition.
The evidence may be inconclusive that there will be a positive impact...but the negative impact of NOT spending the money is indisputable. Case in point: if we allow our system of education to spiral down the drain as it surely is as I am writing this, the NEGATIVE economic impact will be significant and will cripple our economy for years to come.
From the Arizona Daily Star: "State aid for K-12 education could be cut by about $900 million and Arizona's three universities could lose more than $300 million between now and 2010 under options presented Thursday by Republican lawmakers who will be negotiating the state budget..."
I'm certain other states are experiencing the crisis my state is with regard to education. It's about time we stop passing the buck and shoulder the burden of responsibility. If the states can't provide the funds then the feds will have to. The repercussions of allowing our system of education to fail will doom us as a nation.
- by Manhattan2 January 18, 2009 4:55 AM PST
- January 20th, 2009 will be the biggest news day this century and it will not just be all about Barack Obama. Solar Transfer and "The Manhattan 2 Project" will be putting on display, on a number of media channels the solution to energy independence and some powerful security and public health products. Included will be the Seeing Aid, and the Haptic glove technology that will be needed to view or touch the solutions. Just Google Solar Transfer or Seeing Aid to find our Jan 20th announcement.
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