Wednesday, July 22, 2009

Stimulus and Participatory Democracy

We all know the problems with corporate compensation systems run amok. Of course, its continuing that Goldmann Sachs and JP Morgan Chase have profits and renewed strengh. Yet both received (and repaid) bail money and paid them back. And it is expected that at least Goldman Sachs will give out more bonuses.

And unfortunately, the TARP and American Recovery and Reinvestment Act (Stimulus bill) were very long. I heard on CSPAN, Michele Bachmann complaining about the large bills (around one thousand pages) that are brought to the legislatures in a day or so without giving Congress time to read them. Time to read bills is an issue of this Republican Congress person from Minnesota. But is there an alternative to these big bills?

We need to track the StimBucks, and have juries vote on each expenditure. Thus, if there is a project or a bail out, money is put in a separate account for that business or individual. When they purchase a good or service, the money moves to a separate service. Each movement must be approved by a jury of randomly selected citizens, or at least randomly selected from the 15,000,000 unemployed or undemployed. Eventually, some goods and services are "off-the-shelf" like toilet paper for the business's bathrooms or an individual. Then, the money goes to the account.

The stimulus money thus is targetted like an anticancer drug or radiation attached to a monoclonal antibody. The money goes to the persons who need it. What are the side effects of stimulus money. Large bonusses to financial executives who most believe created the problem, are particularly galling, of course. But stimulus checks helped on-line adult web sites grow their traffic by twenty to thirty percent. (Admittedly, other economists analyzing this data show a much lower rate.

But much more to the point is whether a is saved, used to pay off debt or spent. Economists don't know what the size of the multiplier is. That is, how much will the economy or GDP increase as a proportion of the eight-hundred dollar stimulus. There are policy lags and we don't know how much will be saved and how much will be saved.

A stimulus bill, monetary policy are like broad spectrum like whole-body radiation or conventional monotherapy. I am proposing that juries finely target the stimulus, and much of the resulting spending by the people and businesses receiving the stimulus dollars, precisely at those people who need it.

  1. A Graham Bowley, "Two Giants Emerge from the Ruins on Wall Street" The New York Tmes, July 17 2009, Volume CLVIII No 54, 739 Page A1 and A3
  2. B Paul Krugman, The Joy of Sachs, July 17 2009, Volume CLVIII No 54, 739, page A23
  3. C Graham Bowley and Jenny Anderson, "For Goldman,A Swift Return to Lofty Profits" Page A1, The New York Times, Monday July 13th 009, Vol CLVIII, NO 54,735.

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