Art Carden  

Quarters on the Sidewalk as Stimulus

Grade deflation, grade illusio... Our Poverty and Theirs...

A very brief Twitter exchange from last week:

I was jesting, but only sort of. As a friend has suggested, Birmingham's push for the Democratic National Convention is probably part of a larger strategy to convince area voters that we could get such "big time" events if we only had a domed stadium (my explanation for why Birmingham shouldn't build one is here).

If the city is going to spend $250,000 to stimulate the local economy--or to try to bring in a Big Fish project like the DNC--I wonder if they couldn't spend the money better. Why might scattering one million quarters around town be a better idea?

The amounts are small enough that it won't encourage a ton of rent-seeking, particularly by people with a very high opportunity cost of their time. If it's not announced, it likely won't encourage people to spend a lot of time hunting for quarters. There are likely to be salutary distributional consequences, as well. I'm less likely to bend down and pick up a quarter than I am to bend down and pick up ten bucks. It is more likely to be worth a poor person's time to bend down and pick up the change.

By that token, if it is announced, it might produce the salutary effect of putting more eyes on the streets. Could we expect lower crime rates?

It might also encourage the city's homeless population to spend more time scavenging and less time asking people in Five Points and other parts of town for change.

If we want to get all Keynesian, quarters are pretty easy to spend.

So I'll put it to the readers. Suppose you have to use $250,000 of taxpayer money to stimulate the local economy. Tax refunds aren't an option. How do you do it?

Comments and Sharing

COMMENTS (10 to date)
vikingvista writes:

Given that government spending is on average the single biggest inhibitor of economic growth, the money would have to be spent in a way that ironically inhibits further government spending. Perhaps allocating those funds to the campaigns of non-incumbents? Using it for severance pay to cover massive government layoffs? Use it to fund a contest personally awarding legislators who succeed in passing the deepest spending cuts exceeding $250,000--preferably with a percentage of those cuts also going to the winners?

Chris Hallquist writes:

My biggest worry about the quarter idea is that spreading out all those quarters could be a lot of work. Whoever got paid to do the spreading could potentially end up eating up a lot of the money in de facto rents. Instead, you could take a bunch of $20 bills, slip them in cheap-ish plastic transparent protective sleeves, and hide them around the city just well enough that it's only worth your time to look for them if you aren't currently making much money. (Say it takes on average 3 hours to find one.) Would get the city some nice news coverage as well.

RPLong writes:

Reduce the municipal workforce, apply the $250,000 to severance packages where necessary.

Granite26 writes:

I've always been a big fan of burning it.

Paying the cost of reducing some regulatory hurdle might be a good way (50% towards cutting the cost of filing for some business license, 50% towards extra staffing to handle it.)

Prize money is also fun, a pay for grades scheme for 6-10th graders would hit the local economy pretty quick, I suspect.

Peter H writes:

This post brought to you by Coinstar, Inc.

Kevin L writes:

I had an idea similar to Granite26: waive business license or permit fees, or at least defer them 6-12 months. I might also put out a solicitation for companies to provide counseling to entrepreneurs on navigating the local, state, and federal paperwork and the first year of tax preparation. I think an initial payout for each new start-up, as well as a second payout for each business that survives a year would be a good incentive structure. The winning bidder would then focus on more viable start-ups. The bid form could just be:

1. Initial application preparation counseling: $___
2. Counseling for tax preparation:
2a. First quarter: $___
2b. Second quarter: $___
2c. Third quarter: $___
2d. Fourth quarter: $___
3. Incentive for businesses still operational one year from license approval: $___
4. Filing fees (local/state/federal): $___
5. Total of 1-4: $___
6. Maximum quantity of new businesses ($250,000 divided by item 5): ___

Glen Smith writes:

Probably use it to get out of providing welfare to some private company.

Nathan W writes:

Financial literacy classes for people who benefit from social services (required to get the benefit), cooking and shopping classes for people who benefit from social services (required to get the benefit), entrepreneurship training (with a focus on marketing strategies and bookkeeping skills) for people of all ages who may wish to proceed to request credit from local or non-local financial institutions.

Maximum Liberty writes:

+1 to RPLong

Automate anything and fire some city workers.

Outsource anything to the private sector and lay off the city workers.

Put all the traffic cops on local beats for serious crime (daytime burglary in commuter suburbia for example) and use the $250k to make up the revenue loss from traffic tickets.

Pay down the city's debt by $250k, allowing lower taxes some time in the distant future.

Max L.

Hazel Meade writes:

Birmingham thinks they are going to get the DNC to do a convention there?

LOL. You're in the wrong decade, buddy.

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