IBJOpinion

MARCUS: A heavenly suggestion for economic recovery

Back to TopCommentsE-mailPrintBookmark and Share
Morton Marcus

Mike Hooligan made a surprise trip last week to the gates of the eternal retirement community. He was met by St. Peter, who asked in a dialect easy on Mike’s ears, “Aren’t you here early, me lad?”

“Sure’n it be true,” Mike said. “I be looking at the real estate development opportunities, if ye not mind.”

“Ah, real estate,” St. Peter bemoaned. “Not much activity there in these hard times, laddie.”

“So I be hearing,” Mike said, “but the speaker of the Indiana House has proposed repairing bridges in the state to stimulate the economy.”

“I not be hearing that,” St. Peter replied. “Most of the news from the Indiana General Assembly is reported down below, not up here.”

“Yet ’tis true,” Mike said. “The idea is to put Hoosiers to work while making needed investments in our state.”

“A noble thought,” St. Peter said. “Yet be there much excess capacity in the Indiana road construction industry? Will the contracts go to firms with workers in other states or drive up the bids for highway projects?”

“Now that be a subtlety new to me,” Mike said. “Sure’n I be wondering about these stimulus programs for some time now. Are they not just recycling the people’s money?”

“Ah,” St. Peter exclaimed, “and I be thinking you had studied economics at Notre Dame, or were you focused on theological conundrums during those classes?

“The federal stimulus programs are based largely on borrowing, not on taxation.”

“And that puts us at risk that foreigners will dump our debt, causing a total collapse of the U.S. economy,” Mike offered.

“The risk is small,” St. Peter said. “Foreign governments, banks and individuals own 29 percent of the total U.S. government debt, laddie. What do they gain by selling off so that the value of their investment falls? All that blather about dumping is nothing more than scare talk.” 

“But our debt must surely be repaid?” Mike asserted.

“Oh, really now?” St. Peter asked. “And what gives you that idea, me boy-o? The debt of the U.S. government is highly desired because of ‘liquidity,’ which may not mean what you think it means.”

“I know well about liquidity,” Mike replied. “It’s about how easily you can sell what you own. Houses, now there’re assets that be hard to sell quickly and are classified as illiquid. But stocks and bonds are generally easy to sell, so they be called liquid.”

“Right you are, sonny,” St. Peter said, “and U.S. government debt is among the most liquid of all assets. Thus, as the world’s economy grows, or as world anxiety increases, so, too, does the demand for U.S. debt, which keeps its interest rates low and not much of a burden on the taxpayers. Although all that might change in time.”

“But this stimulus spending should be going to households, to families,” Mike said.

“What would families be spending on?” St. Peter chuckled. “The unemployed and hard-pressed might be paying for necessities, but most households are not truly suffering these days. Most families would be taking the money and buying high-definition TVs made in China, clothing from Sri Lanka, wines from Chile and vacations in Spain. If we could be assured that consumers would be spending on beauty parlors, barbershops, dental implants and plastic surgery, giving them money would keep those dollars in the United States.”

“And if I might be asking,” Mike said, “how would you be having money spent?”

“Now that’s something you’ve read before,” the venerable one answered. “Hire the literate unemployed and teach them to tutor illiterate youth and workers.”

That thought was somewhat familiar to Mike, and its simplicity meant it was unlikely to happen. This made him uneasy, finally bringing him fully awake.•

__________

Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Yes sir keep cashing those 300K a year checks direct to IMS, while millions disappear from the teams like Rahal's. Guess there wasn't enough ka- ching going around to keep Sarah Fisher in business without their "merger". LOL._____.Meanwhile back in Realville the series with the "best racing in the world" drew what appeared to be about 5000 live spectators ( and probably 1500 of those Target "freebies", and was beaten in the ratings by a series that reportedly consists of "parades" and aired while most people are still sleeping. That will generate those big ka-chings for sure. :-). But, hey, as long as the Speedway gets the cash who gives a damn about the teams?

  2. Welcome to PETERSON LOAN AGENCY Company (A Personalized Service for All Your Financial Needs) We, Liberal Investment Company Providers offers loan at a very low interest rate of 2%, we offer Personal loans, Debt Consolidation Loan, Venture Capital, Business Loan, Educational Loan, Home Loan, and Loan for any reason and urgent needs!. with a maximum duration of 30 years. Have you been turned down by your bank? Do you have bad credit? Do you have unpaid bills? Are you in debt? Do you need to set up a business? Worry no more as we are here to offer you a low interest loan. Our loan ranges from $5,000-USD (Five Thousand US dollars) to $50, 000,000.00.(Fifty Million US dollars). We also lend in USA DOLLARS EURO and POUNDS ! Fill in this form and forward it to our email: PETERSONLOANAGENCY@GMAIL.COM 1. Your Full names:_______ 2. Contact address:_______ 3. Country Of Residence:______ 4. Loan Amount Required:________ 5. Duration:_____ 6. Gender:_____ 7. Occupation:________ 8. Monthly Income:_______ 9. Date Of Birth:________ 10.Telephone Number:________ 11. Purpose of loan:_________ Yours In Service, MR PERRY, PETERSONLOANAGENCY@GMAIL.COM

  3. If I could actually get the prices...I would do this on my own. We need laws that force provides to publish the costs they will charge. Everyone else gives you the price in advance...except hospitals.

  4. I was under the impression that fencing is not allowed on a front yard and that on a corner, both sides are considered "front" yards, therefore can't be fenced without a variance. Also impedes the visibility for drivers at the intersection. Am I understanding this correctly? Might be why a fence was not included in the plans and a request for a variance will have to be made?.

  5. I was a big fan of Cowards and Carrots, which I got a chance to see at the show. It's currently on Kickstarter, but the designer also put out What's He Building in There last year, which got a fair amount of buzz.

ADVERTISEMENT