Pirate Joe Solves the Economic Crisis, Part II
25 February-25 March, 2009



    So, let’s continue, folks! More ways to get the economy going again, with an eye towards doing it in a way that minimises taxpayer debt.

1. Lotteries:  How about the National Recovery Lottery? Whaszat, you say? Glad you asked, I say. We all know the fabled stories about how folks who win the lottery spend it like drunken sailors, and are usually broke again in one year. What a great way to get money flowing into the economy again! Here’s how it would work: in each state, lotteries would be created in the range of $500k or so. Unlike present lotteries, (whose proceeds are used for other purposes)  all proceeds (except administration costs) would be plowed right back into the lottery. So, if the lottery took in $1.5m over winnings and expenses today, there would be three 500k jackpots tomorrow. This lottery, unlike present lotteries, would not have “no winner” days. Instead of tossing today’s unclaimed jackpot into tomorrow’s, this lottery would be set up to make sure that every jackpot would be won every day.
    By keeping the jackpot relatively low, returning all receipts to the jackpots and making sure that all jackpots are won every day, we would have a lottery whose chances are much better than the 1 in 27m we have now, creating a very attractive odds structure.
    Cost to the taxpayer? Nothing past the initial seed money. Benefits? Every day would bring (for example) three people winning 500k in every state  (and) spending it like drunken sailors. Oh, and some jobs would be created, too.
                                
2. Advertising: Let’s face it. The “new money” designs (like most modern designs) are aesthetically bankrupt. Well, O.K.; downright ugly. On-purpose off-centre coin strikes, bizarre numerals and non-symmetrical bill designs give our currency a weird, cartoonish look, quite divorced from the august, yet reassuring, built on a foundation of stone traditional aura our currency once had. Since nobody counts money without looking at it, (and) we cannot make it look much worse, what have we got to loose? Why not just sell advertising on it?
    How about this: somewhere on the front, for example, the golden arches logo. On the back, a drawing of a typical McDonald’s restaurant. You think they (McDonald’s) wouldn’t be willing to pay millions for this? Guess again. While we’re at it, how about Exxon, American Express, Coke, Pepsi or Verizon? The government could raise billions from this scheme every year, billions that could aid the recovery, billions that we wouldn’t have to pay through taxes. We could keep going: AT&T, Coors, General Mills, Proctor & Gamble, CNN, whatever car manufactures are left standing, H.R. Block....well, you get the idea. Let’s not forget about coins, either.

3. Legalise Drugs: We spend billions every year enforcing laws that, regardless of what the drug law enforcement industry tells us, are ineffective and wasteful. Mexico is currently being torn apart by violent drug cartel wars. These guys are not 1960's style stoned-out peace and love hippies. They are ruthless thugs who will willingly commit mass murder in order to get to the money. Quel surprise! With billions of dollars in the balance, just what did you expect?
    As much as we say we are a capitalistic, free-market nation, we seem to understand precious little about how markets work. Our response is as predictable as it is counter-productive.
    Periodically, we see newscasts featuring triumphant government agents showing off tons of confiscated drugs. They then go on to brag that this is the largest bust ever, and that they have put a significant dent in the supply of that particular drug. On the latter point they are quite correct. They have put a significant dent in the supply of that particular drug. Yet what effect did they have on demand? Absolutely nothing. Market principles 101: what happens when the supply goes down and the demand remains the same?  You guessed it: the price goes up. Way up. Meaning that what supplies still remain on hand and the next shipments are going to cost a lot more. Meaning further, we’ve just increased the drug dealers profit margins, and, by extension,  we’ve just increased the incentive to become a drug dealer. On top of that, drug users send hundreds of billions (in cash) out of the country every year. All untaxed. To whom does that money go? You don’t want to know. The only way to stop this (as we learned with Prohibition) is to take away the outlandish profits. How do we do this? By legalisation. Legalising drugs would:
 
1. Provide huge tax revenues while providing a cheaper, safer product.
2. Provide (through tax revenues) rehabilitation for all who want it.
3. These rehabilitation centres would provide much needed jobs.
4. End the reign of violent drug cartels via market forces.
5. End most of our domestic street violence.
6. Save the billions the government wastes every year on enforcement.
7. Treat drug dependance as the medical (not legal) problem it truly is.
8. Add new cash crops to our faltering economy.
9. Eliminate schoolyard drug dealers.

    We’ve already realised, in the case of one of our most favourite drugs, (alcohol) that all of the above is true. Do you see Mafioso types gunning each other down over bootleg booze territories anymore? Not since 1933 you haven’t. It passed from the scene the moment Prohibition was repealed, and went from the headlines to the history books. Gradually, over the decades, we realised that it was smarter, easer and cheaper to regulate the use of the substance, rather than the substance itself. We say “don’t drink and drive”, “don’t serve alcohol to minors”, “don’t come to work drunk” or “don’t operate machinery while under the influence of alcohol”, etc, rather than “you cannot drink”.

4. Subsidised Alternative Energy: We have many sources of “alternative energy”. The problem is they are all expensive. Very expensive. Mass production (and the new techniques it always engenders) would bring the price down, but it can’t happen until demand goes up. Demand will not go up until, and unless, it’s affordable, (those pesky market principles again). We could stay stuck in this paradox while bleeding for OPEC and Exxon, or, we could use the power of government to ramp up demand, thereby stimulating mass production. Pour example, back in the early 1980's, a CD player cost around $3500. About a year later, $2500, then $1700, $1200, $900, (wow! a CD player for under $1000!) then $800..... Now you can buy one for about $70, and it plays (the then unheard of) DVD’s too! You get the point: mass production means lower prices. So how do we get it going?
    Not by idiotic and punitive measures such as cap and trade, which will squeeze the American consumer dry and choke the economic recovery by creating needless and unnecessary financial burdens, not to mention inflation . Instead, we should start a government subsidy, (the objective of which would be) making a wind, solar, geothermal or a combination system (that could also burn oil or wood etc. as a backup) roughly equivalent to the price of a conventional home heating plant. Why spend money on a unit that could only burn coal, gas or oil when, for the same amount, you could buy a system that needed no fuel at all? This would create demand, and as production rose to meet that demand, the price would start to fall: as it did, the subsidy could be phased out. The benefits are obvious: jobs, a massive reduction of foreign oil consumption, cleaner air,elimination of a major expense and keeping more of our money circulating in our own economy. Part of the programme would assist the network of local heating oil companies add these new systems to their line of products and services.
    Yes, I know: even if this idea got to the government level, some idiot would want to commission a multi-billion dollar study to verify that which common sense screams. Decades would go by before the first subsidy cheque was ever written, and the mendacious status quo would just go on...
    Just remember one thing, folks, it would work!
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