Video: How the Economic Recovery Plan Works
Follow the example of a construction project to see how the stimulus works.By Center for American Progress
February 25, 2009
Recovery investment isn’t only about the government paying for individual jobs; it is about rebuilding confidence in the economy and creating an environment that will enable economic growth and spur the private economy to create jobs.
This animation was originally published here.
This article was produced by the Campus Progress advocacy team.
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Comments
How stimulus works…
— Louis Dous - Feb 26, 04:40 PM - #Apparently trickle down economics works only when perpetrated and controlled by the government. A foolish inconsisitency is the hobgobblin of small, petty, minds.
Loius—
Your point is well taken. Though the distinction is not without difference. You’ve identified the basic dynamics of a market economy, not a “trickle-down” approach per se. Conflating “trickle-down” approaches with “ripple” approaches is a mistake. That distinction is what makes a difference. Here’s why.
Money trickles in that familiar formulation because the higher levels (employers, executives, managers, etc.) keep significant portions for themselves. That is, they line their own pockets first. When they spend this money, it trickles down into the economy. These purchases are predominantly luxuries, for after one attains a certain amount of wealth—nearly everything is luxury.
I enjoy luxuries, but reject profligacy. Our goal is to productively invest capital, and I contend that the trickle down approach is significantly less productive than alternative methods. (See David Schweickart’s proposal for “Economic Democracy” as an example of such a model.)
Also, consider “The Paradox of Choice” from Barry Schwartz. A book that addresses a problematic situation: over the past 50 years, our wealth (as Americans) has grown tremendously—but it hasn’t made us happier. Psychologists sometimes refer to the concept as the “hedonic treadmill”, and it has important implications for how we should structure our society.
Back to the stimulus.
Money from this stimulus package doesn’t “trickle” because we’re distributing it more equitably. That is the essence of a ripple approach versus a trickle-down approach.
Is the distinction intelligible and clear? If you have questions or criticisms, please post them here and I will attempt to address them (or change my position in the event that your arguments are stronger than my own).
— Matt McAlister - Feb 27, 11:27 AM - #