Thursday, December 11, 2008

Would a trickle-up economic stimulus work?

Once upon a time I suggested that we should try to make up our government's foreign aid shortfall.

I wonder if doing the same for the economic stimulus would work? What would happen if we all spent 20% of our income on extra, ethical, green, targeted spending?

Obviously it's logistically unfeasible. Most people don't have 20% of their income just sitting around, and for the vast majority of those who do it's probably in retirement accounts or something you shouldn't be touching. And even if you did have that kind of money sitting around, what on earth would you spend it on? Do the math, 20% of your annual salary. That's a shitload of money to just spend on extras, isn't it? Especially since you'd have to spend it in a way that would boost our economy rather than shipping it off to China or somewhere, you couldn't just replace perfectly good existing stuff because that wouldn't be environmentally friendly, you couldn't spend it on necessities because that isn't extra spending...I suppose house people could spend it on green renovations, but the rest of us? I don't think I even have room in my apartment for an extra 20% of my income worth of anything! (Except perhaps diamonds or something, but that's a whole nother ethical issue.)

But suppose it was possible. Suppose every single citizen went and spent 20% of their income on ethical, green purchases that are targeted to boost our economy and that they wouldn't otherwise buy. Would that boost our economy the same as the 20% economic stimulus the government is supposed to do?

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