Twelve Hundred Dollars. . . .It sounds like a lot of money. It is a lot of money. A lot of extra money that you weren’t counting on until a few months ago. It is the closest thing to free money you will ever see. The only vexing thing about it is what to do with it.
Of course I know what most people should do with it. . .pay off your credit cards and start living more responsibly (tip of the hat to Mr. Lee). But let’s say for our purposes that someone doesn’t have any high interest debt, or outstanding loan from a Tony Soprano type. Let’s also say that this person wants to use this money as George W. Bush intended–getting the economy back on track. How can a person spend $1200 in a way which will have the biggest impact on the economy as a whole?
My first instinct–to bury 1200 individual dollar bills in a secret location somewhere on our property–was thrown out by Laura. Sinking the entire sum into one big purchase would be fun and easy, but maybe I should spread the love a little bit to all the different sectors of the economy. High end electronics are nice, but won’t that money go to some Japanese owned firm? Shouldn’t we keep the money in house?
I think the key here is to utilize the private sector and entrepreneurial spirit of this country to our advantage. Take for example, my dentist. Whenever I am ready to pay my bill, I am told my “total investment for today’s cleaning was. . .” I am not just spending money on my teeth, I am investing in the future of my own personal dental health! Needless to day, I hand the money over like it was nothing. After all it is not just spending money. . .I am investing!
Let’s apply what we have learned from my dentist to macro economics, and here is my plan for personal and national success through my tax rebate:
I take my $1200 and offer it up as a prize for the best invention which will change our lives in the future. The winning inventor can then use my tax rebate as seed money to get his/her invention off and running. Finally, one of the requirements for entry to my “Invention of the Future” contest is a promise to get a cut of all profits coming from the invention. This way, I am still making money from my original $1200 investment.
Of course, if I could just find a Wii, that would be really cool. . . .
Actually, Charles, that’s not a bad idea. Not bad at all, actually. The fallacy of the ’spending’ argument is that spending drives the economy (a Keynesian myth). However, savings is the actual catalyst–and the reason is that it makes money available for investment.
You have devised a manner to accomplish the same thing–while eliminating the middle man; I applaud you. I think, if you don’t have debt that needs to be paid off, that would be a fantastic employment of your funds. (And would, depending upon the success of the ‘invention’, have a positive impact on the economy.)
JUST DON’T FALL VICTIM TO THE LIE THAT SPENDING IT ON NON-DURABLE GOODS WILL HELP THE ECONOMY!!
As one economist (of the Austrian School) explained the ‘Stimulus Plan’ advocated by the guvment: It’s akin to the President scooping water from the deep end of the pool and pouring it into the shallow end expecting the water level to rise. (http://mises.org/MultiMedia/mp3/misescircle-houston08/2_HMC_Higgs.mp3)
The scary thing, Matt, IS that it doesn’t sound that bad. I started writing with the most ludicrous idea in my head, then realized it didn’t seem as far-fetched as I thought it would once it was on paper.