MARCUS: A heavenly suggestion for economic recovery

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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.


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  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

  2. Great news IRL fans: TURBO the IMS sanctioned movie about slugs running the Indy 500 has caught the Securities and Exchange Commission because Dreamworks had to take a $132MILLION write down...because the movie was such a flop. See, the Indy/IMS magic soiled another pair of drawers. Bwahahahahahaha! How's CARTOWN doing? HAHAHAHA...Indy is for losers.

  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

  4. I read the retail roundup article and tried Burritos and Beers tonight. I'm glad I did, for the food was great. Fresh authentic Mexican food. Great seasoning on the carne asada. A must try!!! Thanks for sharing.

  5. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...