Wednesday, February 04, 2009

Believe it or not

Would you believe that in the former Soviet Union there was a market for burned out lightbulbs. You haven't done that have you, replaced a good bulb at work with a bad for the home?

And, would you believe that I'd thought of this independently at about the same time? No doubt that many folks were thinking along similar lines.

This is part of an email I sent a few hours ago to my senators about the U.S. stimulus bill:
The more the bill is burdened with future spending the more taxpayers/consumers will cut back their spending today because they know they will be the ones who have to pay the bill eventually. The downturn we are suffering is in large measure due to a loss of consumer confidence -- we don't want to make that worse.
I had in mind that Ricardian Equivalence thinking kicks in in times like these. Unless, as Robin Hanson is recommending, the government lies about how much it is spending.


Blogger EclectEcon said...

It's worse than just Ricardian equivalence. If I think the gubmnt will pay for something in the future that I might otherwise have bought myself, I'll wait to make the purchase, thus reducing aggregate demand today.

We might well be facing this problem with the alleged stimulus package in Canada.

2:14 AM  
Blogger Peripatetic Engineer said...

I first heard about the "lightbulb economy" when I made business trips to Russia right after the breakup in 1991. It was real. And I saw it in action.

4:08 PM  
Anonymous levitra cialis said...

I know dont believe much of what is been said on television, it is all lies for keeping us away from the real truth. We are been controlled.

1:20 AM  

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