February 11, 2009

Advertising And The Economic Stimulus Package

I'm no economist. I can barely make change for a twenty.

But I have some questions about the "stimulus package" being hammered out in Washington.

It starts with Seth Godin. Seth wrote a very interesting post a few weeks ago, which I commented on recently. The post was called "Do Ads Work?" It made a very thought-provoking point.

If advertising works i.e., if it returns more money than it costs, why do you have an ad budget? Why don't you spend all your money on advertising? If you could trade one dollar bills for five dollar bills, wouldn't you trade all of them?

Using the same logic, if the economic stimulus package is going to be effective it has to create more wealth than it consumes, right? In other words, it has to show a profit.

So if large spending programs create more wealth than they consume, why are they arguing over the size? Instead of 800 billion, why not spend a trillion? Or two? Or five?

And why wait for a crisis? Why not do it all the time?

But if they don't create more wealth than they consume, why spend anything at all?

Anybody out there have answers? Or change for a twenty?

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