Patriotic Americans have a long and glorious history of making sacrifices in times of national crisis. During the revolutionary war, patriotic Americans opened their homes to soldiers and politicians. During World War II, patriotic Americans reduced their consumption of meat, sugar and butter. And once again today, the nation is in crisis. Housing foreclosures are at an all time high. Stocks have tumbled. Airlines are folding. Our economy is struggling. You are probably asking yourself: What sacrifice does the government want me to make today? The answer is simple.
Patriotic Americans are being asked to go shopping!
Yes, the Economic Stimulus Act of 2008 ordered the IRS to send each of us a check for $600. Economists figure that if we all buy something with our checks, the sudden increase in consumer spending might get us out of this recession. From what I can remember from my Economics 101 class in college, it will not help if we use the money to pay off debt or put it into our children’s college fund. We need to buy stuff.
When I heard about the checks in February, I was feeling very patriotic, so I spent $600 in anticipation of receiving my check. Then in March I was feeling patriotic again and I spent my check twice more. There is a barbeque on sale this week at Costco so I will probably spend it one more time.
I think the economic principle here is called the velocity of money. That is, how fast does money pass from the consumer into the economy. It is the only formula I remember from economics. The velocity of money is equal to the square root of how many times your grandfather has told you about being poor in the Great Depression times the number of credit cards you own, divided by the number of miles to the nearest mall plus the number of shoes in your house minus the number of children you have. Unlike most economic formulas, this one actually makes sense in real life. For example, if I spend money before I have it, then in the formula you are taking the square root of a negative number, showing that you are spending imaginary money. You also learn that if you have children, any economic formula produces irrational results. I believe Einstein modified the formula to show that the velocity of money can never exceed the speed of light. My family has disproved Einstein’s theory many times, however.
So it is up to each of us to make the ultimate sacrifice and spend our economic stimulus check as soon as possible. I challenge you to spend your check by July 4. Then, to display our patriotism, at our traditional 4th of July barbeque we can all bring the stuff we bought and show it to our neighbors.
Also, in case anyone from the IRS is reading this, I have an idea. If my spending $600 is helpful to the economy, why not send me $1,000 instead? I promise to spend it. Or better yet, send me $2,000 or $5,000 or even $100,000.
My patriotism knows no bounds.
David LeSueur lives in Littleton with his wife. They are single-handedly trying to bring the economy out of recession.
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