Tech industry watchers call for stimulus package

ITIF believes government spending would help the IT sector ride out the economic storm

An IT thinktank has called for a technology stimulus package to match the US government’s payouts to the financial and automotive sectors.

The Information Technology and Innovation Foundation (ITIF) has issued an eight point agenda that it feels is needed to support the IT industry in the coming recession. It said this would help maintain American spending on IT products and services while protecting jobs.

“Within this crisis lies the opportunity to apply constructive insights from neo-Keynesian theory and then transition to a new economic understanding that both incorporates the best lessons of its forebears and charts a path forward in an increasingly global, knowledge- and technology-based economy,” said the report.

“Given the likely limits on the federal budget going forward, the reality is that this may not only be a good opportunity to enact an innovation-based economic agenda, it might be our only opportunity, at least for the foreseeable future.”

The agenda proposed is as follows:

1. Allow IT investments to be completely expensed in 2009.

2. Provide a tax credit for investments in health IT made in 2009.

3. Provide $2bn to colleges and universities that invest in needed research infrastructure in 2009.

4. Provide a tax credit of 50 per cent for investments in energy-efficient equipment in 2009.

5. Provide $1.6bn for computers and broadband for low-income families with children at home.

6. Provide an $8bn one-time infusion into the Highway Trust Fund to spur ready-to-go surface transportation infrastructure investments.

7. Allow US companies to bring back foreign earnings at a lower corporate tax rate in 2009.

8. Provide forgivable loans to states to shore up budget shortfalls, provided that states expand “rainy day” funds in later years.

The US government has already confirmed that it will use $700bn of public funds to support financial institutions and has voted that $25bn in low interest loans should be made available to General Motors, Ford and Chrysler.