Dan Newman is back today in the Washington Post with a follow-up article to his original op-ed last month about his idea that a more effective stimulus (er, economic recovery) plan would be for the federal government to simply mail out gift cards preloaded with $2,000 on them – and encourage us to “just go shopping”. I blogged about Dan’s original idea here – and he commented on my post.
Today, he responds to some criticisms about whether the idea would be effective:
Classical economists are right that consumers could choose to save the money that gift cards would provide, just as any behaviorist or Weight Watchers leader admits that it is, in theory, possible to ignore food on the counter. But in practice, convenience exerts a strong pull. That’s why items by the cash register tend to be among the highest-margin items in a store.
Amen! Or, instead, the Feds could just give more money to AIG…