The $2 Stimulus
A pharmacist in Brewton, Alabama, prescribed his own cure for the recession. He gave his employees unexpected bonuses, paid out in two-dollar bills.
He challenged them to give to charity, and spend all of that money in local downtown businesses. Just as you’d expect, the money is circulating in a very visible and tangible way.
The instructive piece here comes from the comments. This one, from Zekie:
It’s called basic economics. It is exactly how Obama’s stimulus bill is supposed to work. And it’s exactly how Bush’s worked. However, there were no new jobs created to keep the $$ circulated.
First of all, there is a big difference between a stimulus where they money is injected from the outside (the $16,000 in savings the pharmacist invested in the project), and money that the Federal government must first acquire through taxation, borrowing, or printing.
Second, there is a bit of circular reasoning in effect. The stimulus is supposed to create (or save) 3.5-million jobs, but if the jobs don’t exist the money doesn’t circulate?
CDM2008 adds this piece of wisdom:
Wherever you live, spend locally. Eat at local restaurants, shop at local stores, patronize the businesses that are the foundation of your community. It’s a shame large news stations won’t pick up on something like this. Imagine if it happened in communities throughout the U.S. Good news for a change.
Sorry, but “Buy Local” only works if “Local” saves you money. Going out of your way to prop up local businesses is clearly your choice, but any effort to artificially reduce competition just results in higher costs and greater inefficiency.
If “communities throughout the U.S.” did this very thing, we’d be in seriously dire straits. Trade creates wealth at a greater clip if those trades are of the greatest value to both parties. Such artificial caps reduce the overall wealth and welfare. Yes, it looks good for your community in the short term, but “if everyone else did it” there would be a tremendous flow of capital into the community that gets shut off in the bargain.
If Zekie and CDM2008 have their way, you’d better get used to those $2 bills, because they’ll be getting awful lonely and stale.
