by Anna Kimble

Created on: November 29, 2008

Shopping has recently been purported as a patriotic duty in order to keep the economy going. Americans are reminded to continue shopping and consuming so that there is money flow in the market and items are purchased which keeps people employed to make more and sell more. Before the bailout, the model was giving tax rebates to consumers in the hope that they would purcase phones and TVs and shoes and clothes. They did but also charged extra on their credit cards to cover the additional sum not covered by their rebates. There is enough anecdotal evidence and studies to show that people are in huge credit card debts now and if they receive a stimulus check, will only use it to pay down debt instead of going and shopping some more.

Instead of encouraging people to consume more and take on more credit as a result, the government should create spending plans, take that 100 billion dollars and spend it on building transit systems from teh suburbs to major cities. That will keep people employed, result in something useful for centuries and start the process of weaning people from oil. The last such huge infrastructure spending was building of the highway system and that set things in place for a huge economic expansion. The government has to be visionary not reactive. They can identify industries that need funds to leap to the next level e.g. nanotechnology, personalized medicine. Investing money in these technologies will jumpstart or create a new silicon valley.

Tax rebates worked the last time, it does seem to work but only to a small level before people are back to where they first started, needing more money. A visionary type of plan would involve spending in things that could involve them or build careers for a life time. There is a whole infrastructure overhaul that is needed, investing in this could involve all those out of work construction workers, plumbers, electricians. Investing in green technology will bring the engineers and communications specialists back to work. Accountants, lawyers all of these could be gainfully employed.

Instead the government is talking about giving people $300 per person. There is a saying "If you spread Mount blanc across Europe, it will increase the height only by an inch". There will be minimal impact of these stimulus checks as opposed to spending it on a whole industry which would involve communities and many professions at once.

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