Thursday, February 19, 2009

Give an Economist $8 a Week To Save The Economy

The Wall Street Journal interviewed several famous economists about what they thought would be the best way to spend the $8 a week our income will increase through tax cuts in the stimulus plans. The answered ranged from haircuts to soup kitchen to energy efficiency to ATM transaction fees and economics textbooks.

So the best thing to help the economy is to spend the money. Why not forgive student debt (like this post suggests), or restructure mortgages. Because we want to help the economy now, so the most bang for the buck is current spending.

So what am I going to do with my $8, I’ll likely save it. But if I wanted to help the economy the most I think I would start tipping more at the college Starbucks.
Most of the workers are Towson students, the more money they have the more likely they are to stay in school or study harder if they can work fewer hours. Their increased human capital might help future economic growth, and college student barista are unlikely to save the money.

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