Supercomputer Adds Up, but not in the way The Journal Believes

If you took a close look at the Rio Grande Foundation’s 2008 Piglet Book on wasteful government spending, you would have seen on page 6 our critique of New Mexico’s supercomputer at a cost to taxpayers of $11 million.
Well, a few weeks ago, the Albuquerque Journal editorialized in glowing terms about the jobs supposedly being created by the State’s $39 million supercomputer. It made me wonder whether the State got ripped off for their computer or whether, as is so often the case, the government officials allowed taxpayers to get ripped off. Well, it turns out that it was basically the latter. After poking around and asking some questions, I discovered that the computer really cost taxpayers $42 million because the State had to “fund the creation of a permanent office, build more college gateways, and hire staff…and design a planned central office for the project and to buy equipment for the gateways on college campuses.”
So, the computer will actually cost taxpayers about 4 times the advertised price. No surprise there; this is government we are talking about. Which leads me to the Journal’s aforementioned endorsement of the project. According to the editorial: “Gov. Bill Richardson announced two deals centered on Encanto and its New Mexico Computer Application Center that could add 100 jobs and a home base for DreamWorks Animation. Insigniam Innovation Discovery Center, a health care consulting firm that recently moved from San Francisco, will use the supercomputer to develop solutions for improving health care quality and value.”
100 jobs may sound like great news in today’s economy, but when you look at the unseen, that being the jobs that would have been created in the private sector had the $42 million been left in the economy in the form of lower taxes, it is hard to believe that New Mexico’s economy would not have been better had New Mexico not purchased this expensive toy. After all 100 people making $50,000 a year would have to work for 8 years just to earn back the investment. That assumes of course that these people, obviously all educated in high-end computers, would have had nothing better to do in the economy without the computer.
More likely, what will happen is that for a few years there will be a few highly-publicized jobs created and after 4 or 5 years when this is no longer the latest and greatest, those jobs will disappear and the taxpayers will have a white elephant on their hands. So it goes in the Land of Enchantment.