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Bailout for economy, a boon for R&D?

If you’re looking for another reason to pay attention to whether the $700 billion bailout bill gets passed by the House today, you might want to look at this call for action from the Information Technology Association of America (ITAA).

The bailout bill aimed at steadying the financial markets would also reinstate the Research and Development Tax Credit, which was allowed to lapse last December. According to the ITAA, the lapsed credit  has already cost more than $14 billion in lost revenue and 10,000 jobs.

The ITAA has estimated R&D credit would have created and sustained a total of 141,753 jobs in 2008, not far from the number of jobs cut last month, according to the federal jobs report out today. The majority of the new R&D jobs projected for 2008 would have been required by law to be based in the United States.

Here’s ITAA’s president and CEO Phil Bond making the case:

“Congress’ inaction has left our most innovative companies in limbo, is undermining tens of thousands of R&D-related jobs, and placing billions of dollars at risk. How many more jobs must be threatened before Washington will act?” Bond said.

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You do realize that not only will that occur, but we can be assured that new regulatory acts will be slapped together by the Senators and Congressmen and women who want to be reelected by a populace who lost the retirement savings that they attained over the past 5 years. I expect that in a short while, we will have some more legislature to further govern what banks and insurance companies do and how much risk they can accept. The issue then will become, "What is the Risk and how do you rate it?" The current bail out is partially due to the fact that banks wouldn't loan money to other banks because they had loans on real estate that was going down in value daily. The housing market was dropping because those folks lost their jobs and couldn't afford the mortgage, plus the fact that Mortgage sellers dropped their standard to make their commissions. They would sell a house based on the fact that the people qualified for the loan, not based on the fact that the people could afford the loan, should anything change. The change was moving jobs overseas, moving companies to cheaper operating locations, etc. The bottom line of the company structure became based on the bonuses of the senior executives. Let's face it, the problem was not caused by one thing, but the government was too busy adding debt to see the trend, let alone the cause. But they will make up for it by adding more regulations written by some folks who have never worked in the industry. Or maybe they can have those nice folks from the PAC write it for them. Or maybe the partners in that outside Audit and Accounting Firm. Are they called the Final Four since Enron?