An interesting stimulus package suggestion from Barry Moltz
Barry Moltz, a popular blogger and author, wrote a very interesting post on what Obama should do to stimulate the American economy. Here is what he suggests:
If we took the $750B and divided it among the approximately $150M working Americans, each of us would get $5,000 to spend in this economy. The government would issue special debits cards for us to spend the money over the next 30 days (use it or lose it). This would address all three problems- increase consumer spending, help business and could reduce unemployment…Better yet, for next 30 days, with the $5,000, Americans could “party like its 1999″.
I am not sure whether I agree with Barry on this stimulus package – but you have to admit it is certainly interesting. The idea that you can put the money into American hands, rather than wonder whether bailout money and stimulus money is getting into the same corporate executive bonus (aka GREED) packages we all keep reading about is definitely appealing. Of course there are a lot of things that could go wrong with this type of “dump money into our hands” stimulus package. I can’t help but think about how you really restrict the purchase of things like alcohol and drugs or the worry that someone might use the money as a down payment on a car that they really can’t afford in the long term. I also wonder whether that much money being spent all at once would produce shortages in products and service for the short term, driving prices up and making some companies very profitable while other companies might get very little.
I am curious – what do you think about this idea?
Sabrina Parsons aka Mommy CEO
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This was actually proposed on CNN. In the exact same terms. The problem is it doesn’t fix the housing crisis. It doesn’t create equity in homes. Not a good idea at all and very economically unsound. It is a recommendation from someone that does not understand economics. It is very temporary and short lived. If I gave an unemployed person 5,000, would that solve his problems. NO.
@Tim Nagel- I don’t understand economics very well myself and I know it’s a bit more complex than this, but I don’t think giving $5,000 to some corporation on behalf of an unemployed person is going to solve that unemployed person’s problems either.
Sabrina- thanks for the call out. We have tried everything else, why shouldn’t we try this? I not sure spending billions of dollars to bail out large failing corporations is the answer either.