Friday, February 6, 2009

Trying to understand

Yup, there is no denying it. I dropped out of business school because of two things... econ and accounting. The numbers game just isn't my thing. We all have our thing. Some people put ball in hoop real good. Some fly planes, some find their calling in teaching and learning. For me it was just not in the cards that I'd ever really get complex economics. That is why I'm having such difficulty in understanding something right now. Here's three plans. I've made them as close to simplistic, but representative, as I possibly could...

You are an out of work construction foreman whose wife works for MegaCorp.

Plan A - The government will lower everyone's taxes which will result in a net gain of $3,000 for everyone but spread out into the typical 26 regular paychecks. (deliberately not discussing tax brackets here, just go with me)

Plan B - The government will send everyone a check for $3,000.

Plan C - The government will rebuild six bridges in your local area. The company you've been laid off from has been chosen as one of the companies to complete this work and you can expect the project to take 18-24 months. You company is one of 5 chosen to do this work and employees 600 people - from office staff to truck drivers to engineers. Those people all live in the local community and utilize local businesses and resources in their every day lives.
How did I do? Are these representative of the current plans being bandied about by our elected leaders? Which seems like a better idea, one in which more people will be put back to work, stop being a drain on the local support infrastructure, and return working communities to a positive frame of mind?


Amanda said...

I'm going to go for plan C. The last time a "stimulus" package gave me a check, I hoarded some in a savings account and spent the rest in a country other than the US.

In this economy, if I got a tax break that amounted to more money in my paycheck, I would be squirreling that money away, too.

Plan C. More people working. Paychecks going to support families - buying necessities....more jobs created because demand for goods goes up. And that's just the tip of it.

I won't even mention the 5 water main breaks in DC the other day. Crumbling infrastructure? Nah... ;)

Hugeness said...

I didn't think Plan B was on the table anymore but that's nitpicking. With the other 2 you're pretty close. For plan A, you have to add in some tax breaks to companies too. Incredibly, in this state of enormously weak demand, some people think companies will actually increase supply if they had the chance...

Anyway, the Dems aren't doing a good job of explaining it to people (maybe you should work for them) but what you said is close enough for government work (sorry).