FOSS Development As Economic Stimulus

heybus writes "Economist Dean Baker, best known for calling the housing bust and warning of the ensuing economic collapse, has just published his recommendations for how to allocate President-elect Obama's estimated $800 billion economic stimulus plan. Among other things, Baker calls for juicing the economy with $2 billion worth of government spending to support the development of free and open source software. Baker's idea is similar to the New Deal federal arts and writers' projects: the government would fund projects as long as they produce freely available code. In addition to employing programmers, 'the savings [to consumers] in the United States alone could easily exceed the cost of supporting software development.'"

Comments

Re:nope

[AceJohnny]

Capitalist economics doesn't work like that. Money that consumers don't spend doesn't contribute to GDP, but money they do spend does, and GDP is the magic number (remember, we're all happier when the numbers go up).

That's actually the broken window fallacy. If someone breaks your window, they're helping the economy because you will then spend money to buy a new window and pay a worker to install it for you.

But actually what's happening is that resources that would go into something productive for the economy get diverted to replacing something previously existent, thus reducing economic growth.

Re:The New Deal failed.

[Nietz2000]

but even if you go by the best way of interpreting the New Deal, unemployment was never lower than 9%, INCLUDING make work jobs, which means that, 8 years of Roosevelt were NEVER as good as the WORST year of George Bush JR.

Economic growth was strong, closer to 10%. Unemployment was falling, but you didn't get full employment until WW2. This is to be expected when you are coming off a 25% unemployment rate and a decline in demand of 40% (90% in equity markets). As the economy was growing, you still didn't need many new workers to meet the growing demand because your productive capacity was built for output much higher (and you were still implementing technologies developed during the negative years).

You can't really compare Unemployment Rates of two different periods like this though. 20% of the workforce now works for the Government. The New Deal programs only employed a few thousand people. A much larger proportion of the population are employed today, so unemployment does not fluctuate so wildly.

The New Deal was not successful at reaching full-employment. You really needed a War Economy or a Centrally-Planned Soviet Economy to do this in the short-term.

The New Deal was actually quite small on a macroeconomic basis. However, it was the programs he created that created the society we know today of high home ownership, middle-class earners, social security & basic health care.